IBA Conference Auckland Global Law Firms 25 October 2004 WIM DEJONGHE Allen & Overy LLP - Managing Partner Belgium

THE STRATEGIC CASE FOR MERGER The local firms’ perspective A case study

Articulating the firm’s strategic plan starting point: the firm’s position  client needs  competition  market position  recruitment and retention position  know how  technology  partners and their (shared) ambitions

Loeff Claeys Verbeke (Belgium) in 1998  Client needs:  “home market” becomes Europe (not longer Belgium)  increasing financing needs (ICM work)

Loeff Claeys Verbeke (Belgium) in 1998 (2)  Competition:  increasingly international (also for Belgian Law)  increasingly focussed (international & niche firms)

Loeff Claeys Verbeke (Belgium) in 1998 (3)  Market position:  strong market position through rapid growth, but  too much a collection of independent offices  lack of focus  therefore insufficiently equipped to face market challenges  lack of absolute top work  weakness in some key areas

Loeff Claeys Verbeke (Belgium) in 1998 (4)  Recruitment position:  recruitment issue: lack of international career opportunities  retention: lack of clear strategy  high rotation of people - recruitment quality issue

Loeff Claeys Verbeke (Belgium) in 1998 (5)  Technology and know how:  amounts (time) invested increases if ambition to stay at top

Loeff Claeys Verbeke (Belgium) in 1998 (6)  Partners and their (shared) ambitions:  common vision on “where to compete”: 4 options: fiercely independent merge with Anglo-Saxon firm join MDP build pan-European firm

A two-pronged track

Values: - trust - guidance - cohesion -... Governance structure People pro- cesses Practice structure Client service True partnership Relationship - driven Shared clients among partners Client service team approach Flexible and loose Multiple dimensions Horizontal integration and information flows Firm-wide boards and committees Members are firm leaders Attract, develop and retain the best people Apprenticeship model Focus on personal growth Mutual support Commitment to partnership Shared firm economics try to define common vision on “how to compete” / shared values Values: - trust - guidance - cohesion -...

Loeff Claeys Verbeke (Belgium) in 1998 (8)  Conclusion:  external assistance to help in process of defining strategy  merger may be an option  other options maybe as good or even better  BUT:  NOT defining a strategy is NOT an option

IBA Conference Auckland Global Law Firms 25 October 2004 WIM DEJONGHE Allen & Overy LLP - Managing Partner Belgium