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WestminsterResearch http://www.westminster.ac.uk/westminsterresearch To what extent has research conducted by the GaWC Research Network aided our understanding of large EU law firm geography? Parnham, R. This is an electronic version of a PhD thesis awarded by the University of Westminster. © Mr Richard Parnham, 2016. The WestminsterResearch online digital archive at the University of Westminster aims to make the research output of the University available to a wider audience. Copyright and Moral Rights remain with the authors and/or copyright owners. Whilst further distribution of specific materials from within this archive is forbidden, you may freely distribute the URL of WestminsterResearch: ((http://westminsterresearch.wmin.ac.uk/). In case of abuse or copyright appearing without permission e-mail [email protected] To what extent has research conducted by the GaWC Research Network aided our understanding of large EU law firm geography? Richard Neil Parnham A thesis submitted in partial fulfilment of the requirements of the University of Westminster for the degree of Doctorate in Philosophy March 2016 i Abstract This thesis explores whether a specific group of large EU law firms exhibited multiple common behaviours regarding their EU geographies between 1998 and 2009. These potentially common behaviours included their preferences for trading in certain EU locations, their usage of law firm alliances, and the specific reasons why they opened or closed EU branch offices. If my hypothesis is confirmed, this may indicate that certain aspects of large law firm geography are predictable – a finding potentially of interest to various stakeholders globally, including legal regulators, academics and law firms. In testing my hypothesis, I have drawn on research conducted by the Globalization and World Cities (GaWC) Research Network to assist me. Between 1999 and 2010, the GaWC published seven research papers exploring the geographies of large US and UK law firms. Several of the GaWC’s observations arising from these studies were evidence-based; others were speculative – including a novel approach for explaining legal practice branch office change, not adopted in research conducted previously or subsequently. By distilling the GaWC’s key observations these papers into a series of “sub-hypotheses”, I been able to test whether the geographical behaviours of my novel cohort of large EU law firms reflect those suggested by the GaWC. The more the GaWC’s suggested behaviours are observed among my cohort, the more my hypothesis will be supported. In conducting this exercise, I will additionally evaluate the extent to which the GaWC’s research has aided our understanding of large EU law firm geography. Ultimately, my findings broadly support most of the GaWC’s observations, notwithstanding our cohort differences and the speculative nature of several of the GaWC’s propositions. My investigation has also allowed me to refine several of the GaWC’s observations regarding commonly-observable large law firm geographical behaviours, while also addressing a key omission from the group’s research output. ii Contents Start page Chapter one: introduction 1.1. Introduction 2 1.2. Aims and objectives 3 1.3. Conclusions 9 Chapter two: literature review 2.1. Introduction 11 The GaWC’s analysis – one of the most substantive bodies 2.2.1. 11 of work in a lightly-studied area of research 2.2.2. Conclusions 16 The GaWC’s research which forms the basis of my 2.3.1. 16 hypothesis formation 2.3.2 Conclusions 17 Using (non-legal sector specific) services-related 2.4.1. globalisation literature to assist with my evaluation of the 17 GaWC’s research 2.4.2. Conclusions 18 Understanding the extent of cross-border large legal 2.5.1. practice geography: insights offered by GaWC and other 19 scholars 2.5.2. Conclusions 23 2.6.1. Hypotheses development 23 Hypothesis one: among the EU’s largest law firms, a small 2.6.2. 1. sub-set of those legal practices will operate a majority of 25 that cohort’s total foreign branch office network 2.6.2.2. Conclusions 27 Hypothesis two: large EU law firms which trade 2.6.3.1. internationally tend to cluster their foreign branch offices 28 into distinctive transnational patterns iii 2.6.3.2. Conclusions 30 Hypothesis three: within the EU, a country’s largest law 2.6.4.1. firms will typically trade in a small number of domestic 30 locations 2.6.4.2. Conclusions 32 Hypothesis four: when trading domestically, my cohort of 2.6.5. large EU law firms tend to cluster their branch offices into a 32 limited number of common locations Hypothesis five: despite their otherwise heterogeneous behaviours in relation to their EU branch office locations, my cohort will nevertheless tend to congregate into a small 2.6.6.1. number of EU locations. These locations will have 34 previously been identified by the GaWC as “global legal service centres”, “world cities” or locations deemed “over- provisioned” by global law firms 2.6.6.2. Conclusions 41 Hypothesis six: despite their otherwise heterogeneous behaviours in relation to their EU branch office locations, my cohort of firms will nevertheless collectively ignore 2.6.7. 41 certain EU locations. In particular, they will commonly ignore EU locations identified by the GaWC as being “under provisioned” by global law firms Hypothesis seven: despite their otherwise heterogeneous behaviours in relation to their EU branch office locations, my cohort of firms will treat certain EU locations as being 2.6.8. focal points of modest legal practice investment or 42 divestment over time. Some of these more commonplace investment and divestment locations will have previously been identified by either socio-legal or GaWC scholars Hypothesis eight: my cohort of large EU law firms makes 2.6.9.1. extensive use of “alliance capitalism” to extend their branch 44 office geographical reach 2.6.9.2. Understanding the distinction between law firm branch 46 iv offices and alliance capitalism Hypothesis nine: my cohort of large EU law firms use alliance capitalism to extend their geographical reach in 2.6.10. 49 distinctive ways, which are commonly replicated across multiple EU states Hypothesis 10: large EU legal practices have overarching geographical strategies which are related to - but also distinctive from – the specific reason why they change their 2.6.11.1. branch office geographies in specific EU locations. Further, 51 to implement these overarching strategies requires a consensus to be reached between a firms’ leadership and its wider partnership 2.6.11.2. Conclusions 54 Hypothesis 11: my cohort of large EU law firms changed their branch office geographies in specific EU locations for 2.6.12.1. 55 reasons suggested by the GaWC, or by scholars who have studies the legal profession 2.6.12.2.1. External factor one: regulation 57 2.6.12.2.2. Conclusions 63 2.6.12.3.1. External factor two: client considerations 64 2.6.12.3.2. Conclusions 68 2.6.12.4. External factor three: Significant geopolitical events 68 External factor four: geographical diversification to reduce 2.6.12.5. 68 organisational risk 2.6.12.6. External factor five: technological advances 69 External factor six: the need to interact with other local 2.6.12.7. 70 services 2.6.12.8. External factor seven: extent of local infrastructure 71 External factor eight: competitive forces – or herd 2.6.12.9.1. 71 behaviour 2.6.12.8.2. Conclusions 73 2.6.12.10.1. Internal factor one: legal systems advised on 78 2.6.12.10.2 Conclusions 78 v Internal factor two: practice area / industry sector 2.6.12.11.1. 78 specialisms 2.6.12.11.2. Conclusions 79 2.6.12.12.1. Internal factor three: financial considerations 79 2.6.12.12.2. Conclusions 82 2.6.12.13. Internal factor four: quality control 82 2.6.12.14. Internal factor five: personal partner preferences 83 2.6.12.15. Section conclusions 83 2.7. Literature review conclusions 84 Chapter three: research method 3.1. Introduction 86 The scope of my investigation – firm sample selection, 3.2. 87 geographical scope selection and time period selection 3.3. Specific sources of data used – and why 93 3.4.1. How I collected my data 96 How I collected data relating to my cohort’s EU 2009 3.4.2. 96 offices How I collected data relating to my cohort’s evolving EU 3.4.3. 98 office presence How I collected data relating to my cohort’s use of alliance 3.4.4. 100 capitalism within the EU How I captured data relating to law firms’ overarching 3.4.5. geographical strategies, and also their decisions, to alter 102 their geographies in specific locations 3.5.1. How I analysed and coded my data – introduction 104 How I analysed the scale of my cohort firms’ 2009 3.5.2. 104 international branch offices How I tested hypothesis one: that a small subset of my 3.5.3. cohort firm in each EU state will comprise a majority of that 105 sample group’s international branch office networks How I coded and analysed my cohort firms’ possible 3.5.4. 106 tendencies to cluster into distinctive globalisation arenas (H2) vi How I evaluated whether my cohort firms had a tendency 3.5.5. 107 to trade in a small number of domestic locations (H3) How I evaluated whether my cohort firms tended to cluster 3.5.6. their domestic branch offices into a limited number 107 locations (H4) How I evaluated whether my entire cohort of firms collectively tended to trade in a small number of EU 3.5.7.