Scale and sophistication: The rise of the boutiques

by Sophie Schroder24 Nov 2014
The partner of the firm that was named the Waterstone Boutique Law Firm of the Year at the 2014 New Zealand Law Awards says that boutique law firms are doing increasingly well across all types of transactions.

Malcolm Webb of Webb Henderson spoke to NZ Lawyer TV about the rise of boutiques and the potential reasons behind the phenomenon.

The growing success of Kiwi boutique firms comes from a realisation that scale isn’t as important as it used to be, he says.

“We’ve been able to undertake billion dollar transactions with teams of only three or four lawyers, for example.”

The increasing sophistication of clients means they are better able to assess the quality and value being provided by law firms, and Webb says this has led to less of an importance on the “big name brands” in law.

And it’s not just the boutiques that are benefiting from this, but other providers such as medium-sized firms are also doing well.

Webb Henderson has been successfully taking advantage of this wave, and its efforts were recognised in October when the firm appeared as a finalist in the Legal Adviser of the Year category in the TMT World Awards 2014, a major technology, media & telecommunications global awards.

At the time, partner Webb said it was a huge achievement to have a “little guy” recognised on the same list as large international players like Clifford Chance and Herbert Smith Freehills.
Outside of the New Zealand and Australian domestic markets, Webb Henderson specialises predominantly in TMT, and it’s been involved in a number of significant and high profile cases.
With a major focus on the Asia Pacific and Middle East regions, Webb says the firm has been successful in picking up some of the world’s largest TMT operators as clients.
More recently this includes Ooredoo, a Middle-Eastern based telecommunications operator listed on the Qatar Exchange, the Abu Dhabi Securities Exchange and the London Stock Exchange.
It has a market capitalisation of over US$10 billion and reported 2012 revenues of US$9.3 billion, says Webb.
“It’s an enormous company and we advised them in their entry into the Myanmar market in Asia… It’s one of the biggest new large telecommunications projects in the world at the moment.”
Ooredoo will be putting up to a massive US$15 billion total investment into Myanmar, he says.
Not bad considering that Webb Henderson is still a young firm that’s only been around for about five years, and has 25 lawyers working across its offices.

But it’s proof that Webb’s contention about scale not being so important anymore certainly holds truth, and this is further highlighted by the fact that many other boutique Kiwi firms are seeing particular success in recent years across all types of transactions – whether they be very large or small matters.

This is not to say that it’s not a challenging market, says the partner. He predicts that the supply side is only set to get harder, with the demand side continuing to remain fairly flat.

“I think the industry is still going through a tough time in New Zealand, and [with] the current market conditions it’s unclear whether these are structural or cyclical,” Webb says.

“I think we’ve all got to prepare for the fact they are likely to be structural. The competition is going to increase. I’m expecting there will be other spin-off firms coming out of the major law firms. I’m expecting there’ll be LPOs coming into the market, international players and so on.”

See the full video interview with Malcolm Webb of Webb Henderson here.