Boosted by whole-firm combinations, Dentons continues its international expansion in emerging markets such as Latin America and Africa. Their momentum shows no signs of slowing. Elliott Portnoy, the global CEO of Dentons, talks about the firm’s expansion strategies and its success.
Leaders League: Dentons’ international footprint continues to grow. What is your strategy every time you decide to open a new office?
Elliott Portnoy: Dentons’ bold yet thoughtful moves are based on two key factors. Firstly, we are client-driven. When we’re considering a market, it is only after intensive engagement with our clients that we can identify whether or not a particular marketplace in Europe, Southeast Asia, Africa or Latin America is going to be of significant economic and strategic interest to clients.
The second most important piece emerges out of our status as the only truly polycentric law firm. It is not just a marketing slogan; Dentons has no headquarters or dominant culture. In all jurisdictions where we do business we aim to have a team of lawyers deeply rooted in each local community. We do not relocate our partners or associates from London, Toronto or New York to Chile, Brazil, Peru or Columbia. Rather, we look for lawyers who are deeply rooted in that local community already and have exceptionally strong relationships with local clients and are very well-known in the marketplace.
Unlike our competitors, we go into a new market with a whole-firm combination, rather than a laterally recruited group. We partnered with elite Chilean firm Larrain Rencoret Urzua for our new whole-firm combination in Chile.
Dentons has two differentiating platforms in Eastern Europe and Latin America. Can you tell us about the big picture of your footprint in Africa?
For Africa too, whole-firm combination is the way to go. We are combining with the oldest law firm on the African continent, Hamilton, Harrison & Mathews in Kenya. In South Africa we are the only level-one black economic empowerment global certified law firm through our combination with KapdiTwala in Johannesburg. We have also announced our combination with Kampala Associated Advocates in Uganda. In each of those markets we’re attracting top-notch law firms to combine with us. We do not want to form associations with local firms or operate from London or form a hub to service work in Africa. Rather, we want to be the first Pan-African global law firm just as we have become the only Pan-Latin American law firm with our recent growth in Chile, Brazil, Peru, Guatemala, Costa Rica, Mexico and elsewhere in Latin America. Our approach takes a bit longer, but we think there is a greater likelihood of success by operating in this fashion.
Can you remind us of the offices that you already have in Africa?
We have 19 offices in Africa, with those in Mauritius, Uganda and Kenya being the latest. We will soon gather our partners for a vote and launch our new offices at the end of 2018 or the beginning of 2019, as we continue to build on the momentum in growth.
There are 54 countries in Africa. Would you say in ten years’ time you’ll have an integrated network of offices in half or maybe even all of those countries?
The market opportunity in Africa is not limited to ten or fifteen countries. We want to go beyond that number once we have identified the leading high-quality firm that aligns with our strategy and culture, and shares the vision and goals of our firm. We do not have a target number or date set to achieve this goal, but our plan is to be the dominant law firm through whole-firm combinations. I would not be surprised if in a ten-year period, we would be in most if not all significant legal and economic markets on the African continent.
There is a market trend of law firms going public, as has been seen in Australia and London. What’s your view on it?
In many of the individual markets where we do business, a public listing or an investment from the outside would be impermissible. Accordingly, as a global matter, this is not a direction in which Dentons as an integrated global law firm could go immediately. However, it could become attractive and potentially appealing for various parts of our firm and we certainly are exploring this trend to see whether those developments require us to participate in some fashion. Dentons aspires to be not only a law firm, but a business solutions firm: we are competing in many markets not just with other law firms but with the Big Four, technology companies, alternative service providers, LPO (legal process outsourcing), BPO (business process outsourcing) and cloud-based firms. It would be short-sighted not to take advantage of or at least consider different trends and opportunities to successfully meet the needs of the client.
What’s your view on litigation funding? Would you describe it as a passing trend or an important, disruptive one? What’s your approach to it?
There is no global answer to this, as in some legal markets litigation funding is not permitted due to regulatory limitations. However, I would expect this trend to increase and over time become an increasingly important alternative. Dentons’ litigation practice leaders, CFOs and regional leaders are carefully assessing this trend. We are already accepting litigation funding in some markets for our clients. We are working in a very competitive and dynamic marketplace and the need for adaptability and flexibility has never been greater.
Could you please describe the nature of the firm’s current clientele? Especially after creating new platforms in emerging countries?
There are no industry sectors in which we are not attracting new clients and winning a place on global or regional panels. Financial institutions are a dominant sector in the longstanding markets as well as in the new markets, such as South America and Southeast Asia. Energy is another critical sector, as are real estate, hotels, insurance, technology, media and telecoms; IP, retail and consumer products are also hot industries. With an army of 9,000 lawyers practicing law in more than 75 countries and 175 offices, there are no industry sectors where we do not have teams or active client relationships. We can now offer our clients global reach in the newest markets and all the existing ones.
Following your recent mergers, did you get appointed to the panels of leading clients from different industry sectors? Can you name a few?
Post-mergers, some of our global client panels across multiple industry sectors include Avis Budget Group, BASF, Bayer, BP, Macquarie Bank, Nokia, Société Générale, Standard Chartered Bank, Total and Virgin.
How do you get the partners on board for expansion moves? How do you share the vision and excitement of these moves?
We have completed over 40 combinations since 2013 when we launched Dentons and in that period of time we never received a vote of less than 98.7% of our partners. That can only happen if you constantly communicate with all your partners so that they are aligned with the goal, strategy and vision of the firm. It can only happen if, in addition to our global leadership efforts, we have strong and effective leaders in each of our regions who frequently communicate with partners via partner meetings, calls, weekly newsletters and daily emails. Some would say this is over-communication, but for the growth of our firm it is critical that we communicate internally with our partners to ensure that there is a high level of engagement.
A criticism of Dentons’ expansions that some may have is that they are through acquisitions and debt instead of debt-free mergers. What’s the truth?
We don’t acquire firms, we combine with them. We don’t incur debt to be able to do a transaction because we don’t invest in other law firms. Rather, those firms combine with us and fully participate in our programs. They make investments to be part of the global Dentons family, not the other way around. So, all those firms that do it differently or want to find a way to criticise us, we expect that they will keep trying. We don’t shy away from battles and people will challenge us from time to time.
There is a Gandhi quote that says, “First they ignore you, then they laugh at you, then they fight you, then you win.” In the early days at Dentons, nobody paid any attention to us, then they scoffed at the idea of our strategy and our approach, then they realised that we’re having success and they started to fight with us – which we welcome! But we will win.