This Research Bulletin has been published in Urban Geography, 21 (2), (2000), 95-120.
Our knowledge, like our client's interests, transcends geographic boundaries
White & Case promotion material
The world is Baker & McKenzie's workplace
Baker & McKenzie promotion material
Originating from New York, White & Case head their publicity with the title 'A global law firm'; originating in Chicago, Baker & McKenzie, as the world's largest law firm go one step further: they entitle their publicity 'The global law firm' .1 Clearly, these two US law firms are telling us, not only that they transcend domestic practice, but they represent more than merely offering a foreign service to their US clients. No longer just 'international', their contemporary organizations allow them to operate 'in virtually every corner of the world,' as White & Case publicity tells it. In this paper, we investigate such claims and attempt to place them in context through both a specific empirical analysis of the geographical strategies of US law firms and, more generally, by using our findings to add to our knowledge of world cities and advanced producer services. In addition, beyond this specific producer service case study, we aspire to make a modest contribution to some current debates on the nature of globalization and the non-US city system (cf. Warf and Erickson, 1996).
Given the debates surrounding globalization, which often owe more to rhetoric than fact, there exists an urgent social science research need for more empirical evidence of global-scale processes. And we need to get beyond concern for 'proving' whether state or trans-state economic processes are currently the most important, as discussed by Cox (1997). There are important contemporary tendencies towards the trans-state and these need to be precisely charted and evaluated. Hence we agree with Cox (1997, 17) when he argues that '(n)ew economic geographies are a fact, though it would be better if we had an improved sense of their dimensions ...'. To get such as 'improved sense', however, requires more than measurement, it is necessary to hone our concepts to make the 'facts' meaningful. This requires consideration of 'geographies in globalization', a theoretical framework for interpreting our empirical case study. Geographies in globalization constitutes the first part of the paper, these ideas inform the subsequent analysis, but are explicitly returned to in the conclusion where 'results' and 'theory' are brought together.
One reason for the relative dearth of facts on globalization is because nearly all easily accessible data is international (i.e. inter-state) rather than trans-state in nature: public statistics are produced by states so that states are naturally the subjects of observation. In this study, we use information on firms which enables us to treat cities as the basic subjects. Our basic data consists of the top 250 US law firms in 1997 as measured by total number of lawyers.2 Of these exactly 100 firms had offices outside the USA and it is the organizational geography of the 'extra-territorial firms' which we analyze here. The previous literature on the 'geographical strategies' of law firms is divided into two separate bodies of work in economic/urban geography and legal/business studies, respectively. In the former, researchers have looked at the geography of how US law firms are organized, but with the limited exception of one early study (Moss, 1987), they have not focused on their extra-US links. For example, Lynch and Meyer (1992) provide a useful analysis of the growth of US law firms within the USA between 1950 and 1980, as an index of city dynamics, and Warf and Wije (1991) provide a more recent assessment of large US law firms (using data for 1988) which includes a brief consideration of the 'international dimension' (pp. 166-70), but without considering non-US cities. Outside geography, there are several studies which trace the development of legal firms to their contemporary global presence (Abel, 1994; Spar, 1997) and consider the pros and cons of 'megalawyering' (Harper, 1989; Flood, 1996; Morris, 1996). In this study, we combine the global orientation of the latter studies with the urban focus of the geographers, to provide a new empirical assessment of world cities in one particular aspect of US commercial relations in a globalizing world.
The globalization of law is the result of many factors which are special features of the contemporary era.3 In particular, the demand factor of clients developing world-wide interests, and the supply factor of communication and computer enabling technology have created a new situation where traditional competition between firms is now being expressed, in part at least, geographically as global service supply. The use of very similar titles in the promotion material of the two law firms quoted above is no doubt an example of such competition in action. For the most part, these globalizing tendencies in law have been quite recent, even more so than for other service industries (Daniels, 1993, 55), but they have now reached a level of activity where we can use numerical analysis to investigate this phenomenon. For instance, the 100 US law firms we deal with here have 368 non-US offices in 70 cities across the world.
These offices and cities are analyzed in two ways, which define the two empirical sections into which this paper is divided. In the first, we focus on patterns, the geography of the offices, identifying both the cities represented and the particular world regions to which they belong. We consider both the non-US cities receiving US law firm offices and the US cities from which US law firms with foreign offices originate. In the second, we investigate the processes, in particular the geographical strategies of law firms, and identify operations ranging from international 'foothold' positions to situations which might reasonably be termed global. For the latter case, we describe the operations of the three US law firms who have made the greatest contributions to the globalization of law: Baker & McKenzie; White & Case; and Coudert Brothers. Hence, the core of the paper is a specific empirical illustration of one producer service example of contemporary globalization tendencies. However, before we describe these geographies of globalization, we need to consider geographies in globalization.
GEOGRAPHIES IN GLOBALIZATION
From the perspective of 'reasserting the power of the local', Cox (1997, 1) problematizes our subjects of analysis as 'the so-called "world cities"'. This is a useful reminder that the original argument stimulating contemporary world city studies modestly posited only a general 'hypothesis' for consideration as a new framework for research (Friedmann, 1986). In subsequent researches, the various assumptions and assertions in this initial work have been subject to much debate which Cox's recent problematization suggests is far from over. However, there is a convergence of opinion away from treating world cities as simple 'basing points' of global capital and considering them instead as particular places, with distinctive characteristics, which are critical to contemporary capitalism. This concern for geography in globalization takes two broad forms: one which attempts to build upon the original world city hypothesis; and, one which suggests a new departure in urban theory. These positions are best represented by Sassen (1991; 1994) and Storper (1997a and b), respectively. Our research has been developed out of the former tradition, but we begin our discussion with Storper's work because, although not so dismissive as Cox, it represents a direct theoretical challenge to our focus upon relations between cities.
A Theory of Urban Areas: Economic Reflexivity
Michael Storper is particularly concerned to show the increased importance of territorialization in the contemporary interaction between flow economies and territorial economies. Although the new 'metacapacities' resulting from IT advances and recent additional market penetrations have commonly been interpreted as advancing global economic tendencies, Storper (1997a, 28-9) emphasizes 'an enormous leap in economic reflexivity' which has resulted. It is this reflexivity which is preventing a simple deterritorialised economy of flows and substitutions emerging as some globalization theorists have argued. Rather reflexivity requires specific types of context where complexity and uncertainty can be handled in a collective and continual learning process. Because proximity is vital to this process, places which serve as such contexts are themselves enabling; places are part of the process. Thus, economic behaviour is not simply embedded in noneconomic forces, but rather there is a mutual process of understanding and interpretation in region-specific evolutionary processes. Storper uses the example of Hollywood to illustrate this symbiosis between place and process. Hence, the new metacapacities have resulted in the growing importance of territorialization as a form of economic activity rooted in regional assets not attainable elsewhere and not easily created or imitated (p. 170). The classic examples are the small regional economic success stories of the recent past, such as the 'Third Italy' and Silicon Valley.
Cities enter Storper's (1997a, 222) analysis because they are 'privileged sites' where activities requiring reflexivity occur. Using a traditional export base theory of urban activity, Storper argues that the economic activities involved in export are more reflexive in nature than those meeting local needs. The result is a pattern of overlapping worlds of knowledge and learning which produces specialised and designated commodities in both manufacturing and services for national and international markets. In this process cities both converge in their increasing economic reflexivity while simultaneously diverging in their specificities, the particular mixes of intellectual resources available in a given urban context. For Storper, it is just such ensembles of localized relations which give contemporary cities their 'very usefulness to the forces of global capitalism' (p. 222).
A key feature of Storper's work is that there is actually little reference to centrality, to cities as central places. Cities are interpreted strictly as another case of economic territorialism with little distinguishing this 'urban analysis' from his original regional analyses. Hence when he lists examples of 'urban worlds of reflexive action', places discussed earlier in the text as 'regional' examples, make a reappearance (e.g. Hollywood and Silicon Valley (p. 246)). Storper's own name for his theory is instructive here: 'a theory of the urban economy: the social organization of economic reflexivity' (p. 244). The emphasis on the particularity of each urban complex means that the wider world of cities, their role in the economy of flows, is relatively neglected. Although he does refer to 'the society of cities' (p. 222) this is precisely what is missing from what is an argument about 'urban areas', not cities in the fullest sense of the term. By using a form of export base theory he deals with single city-centered analysis, rather than inter-city analysis. What is missing is a second geography in globalization, the network of cities. When Storper argues that global firms locate in big cities to access specific reflexivity as input to their global strategy, he omits to mention that such global strategy can only be learned as a collective intellectual resource about relations between cities: how they connect and why, and the ways in which these relations are forever changing. We might call this a necessary network reflexivity and non-contiguous, but not deterritorialised, in Storper's sense of the word, because of its collective and knowledge-based reproduction transcending similar processes in each city component of the network. In this study we will be concerned for both geographies in globalization.
A Theory of Cities: Geographical Centrality
To study inter-city relations implies giving more emphasis to similarities between cities than to their specificities. This is, of course, what Saskia Sassen (1991) has done in her identification of New York, London and Tokyo as 'global cities'. Storper (1997a, 223-33) is very critical of Sassen's work, arguing that much of what she identifies as characteristic of the 'Big Three' is to be found in a much wider range of cities, especially her concern for social polarization. But there is a key section of Sassen's argument which Storper neglects and which can contribute to overcoming his failure to appreciate the difference between urban as an area and city as a centre. Sassen (1994) also argues that new advances in IT, rather than eliminating geography, have created new geographies (Also see Harvey, 1989). But her analysis results in 'a geography of strategic places on a global scale' (p. 4), the network of world cities. By emphasizing a renewed importance for cities, as sites for finance and other advanced producer services, she locates cities firmly in the economy of flows.
What Sassen describes is a particular infrastructure of globalization, the places which enable global capitalism to operate. As we have suggested above, this is not a simple information network, but is highly knowledge-based. Sassen focuses upon specific areas of knowledge creation, the production of new and innovative services in which the reflexivity of the 'intellectual worlds,' as Storper describes, are essential. Storper criticizes Sassen for her narrow focus, but we can see here that this is what enables her to combine the internal and external relations of cities. The result is 'new geographies of centrality' (p. 4), which bind together major cities across the world. Evidence for such a 'society of cities' comes in the increasing competition between cities, to develop the specialized services which will enable their repositioning in the world city network. This is a geography in globalization which is itself global.
Economic Reflexivity, Geographical Centrality and Law
Although we most certainly agree with Storper in his criticism of Sassen's initial emphasis on the 'Big Three', she does provide a key argument which distinguishes what is historically specific to contemporary major cities and thus provides a gateway into looking at world city network formation. As a preliminary excursion into this field, we are looking at a profession, that is a closed specialist knowledge service, which has only recently been globalizing its activities. This should allow us to describe the basic skeleton of the contemporary world city network in geographies of globalization.
As a personal professional service US law, like law elsewhere, was first organized on an individual basis and then through small partnerships. Combining the personal, with specialized knowledge, created a customized service built upon local understanding and contacts, set in state and national legal frameworks. This changed with the corporate merger boom of the late nineteenth century in which a few law firms emulated their clients by growing into large businesses, with tight central control (Johnson, 1972; Nelson, 1988). The pioneer of this process was Paul Cravath and such organization, initially known as 'law factory' (Flood, 1996, 178; Abbott, 1988, 252), is now called Cravathism, law's version of Fordism (Trubek, et al., 1994, 423). However, these new firms remained rooted in their origin city - firms were commonly identified by their city location as in "x is a New York law firm and y is a Minneapolis firm" (Spar, 1997, 10). Widespread geographical expansion beyond a single city occurred only in the 1960s, with law firms servicing their major clients in Washington, DC and New York, for their political lobbying and financial legal requirements, respectively4, as well as following them to growing 'sunbelt' cities. It was this form of activity which grew into the internationalization of a few firms after 1965 (Spar, 1997, 12). This was very much client-led, for instance when Citibank opened its Paris office in 1967 so also did its New York lawyers, Shearman & Sterling (Spar, 1997, 13). Likewise, Sullivan & Cromwell (a large New York law firm) built up their global presence through following Goldman Sachs around the world. By 1985 the top 250 US law firms had 124 foreign offices between them. However, after this date, more and more US law firms ventured abroad on their own with new global strategies to provide coordinated and consolidated trans-national services, in the main growth regions of global capital (Spar, 1997, 13-4). This is the position in the late 1990s, which we describe below.
Such a story of 'geographical evolution' should not be taken to mean that the path to the present was in any way smooth. By expanding beyond the home city, firms leave behind their prime asset of local understanding and contacts. When such expansion crosses international boundaries the losses are multiplied, even the expert knowledge, US law, becomes of limited utility. With no directly marketable knowledge how has this international expansion been sustained? Certainly US law firms were not able to compete in foreign cities by price, but they could 'woo clients in distant markets ... by offering differentiated services, information or advice unavailable from local sources' (Spar, 1997, 15-6). This required constant refining of legal products on offer for any firm to succeed in an increasingly competitive legal world market (Spar, 1997, 16-7). We agree with Flood (1996, 175), when he refers to process as developing a 'reflexive culture' (Flood, 1996, 175). For instance, this statement by one legal executive is a quintessential expression of economic reflexivity:
'Our ... service is driven by the philosophy that lateral thinking is the key to helping our clients find solutions for difficult and complex propositions ...' (Flood, 1996, 183)
The assets which US firms brought to the world market to underwrite this new reflexivity relates to their past corporate history: firm size giving the critical mass for global service, plus experience of economic specialization (finance) and political lobbying. Hence, for instance, with the growth of trans-national activities in the EU, US law firms were better prepared to provide the necessary services than either German or French law practices, which had a very different non-commercial legal tradition: for Brussels think Washington, DC, for London think New York. (Trubek, et al., 1994, 422).
But in all this reflexivity, the local cannot be ignored. US law firms have pursued a policy of hiring local lawyers in a given city and jurisdiction and combining them with their experienced international lawyers. In this way US firms have been 'Europeanized' in that world region as so-called 'Euro-hybrids' are produced (Trubek, et al., 1994, 247). In order to create a 'network reflexivity', partners are sometimes rotated and outstanding younger foreign lawyers have been socialized through US law firms acting as global 'finishing schools' (Trubek, et al., 1994, 433). Nevertheless, the problem of multiple city office locations across several jurisdictions has by no means been solved as some firms hang on to their centralized structures, while others experiment with so-called headquarter-less organization, which we consider further in our firm case studies below.
WORLD CITIES AND GLOBALIZATION ARENAS
Since the vast majority of socio-economic data are state-produced, and therefore state-referenced, much of the research on globalization - implying trans-state processes - must begin with new data collections and presentations. In this first empirical section, we are concerned primarily with the facts of US law globalization. We provide simple geographical analyses to aid in interpreting data describing US legal services. These analyses focus upon the two basic patterns in the globalization: first, the 'external geography' of where US law firms have their foreign branch offices; and, second, the 'internal geography' of where in the USA the origin offices of these globalising law firms are located.
Where in the World? Eight Dominant Cities in Three Arenas
Figure 1 shows the worldwide distribution of US law firms' 368 foreign offices. The uneven nature of this globalization is immediately apparent. As a first step in analyzing this pattern we can identify the main globalization arenas in which most of this legal activity is taking place. Drawing on previous work on the globalization of London law firms (Beaverstock et al., forthcoming), western Europe, Pacific Asia, and eastern Europe are identified as the world regions which can be termed globalization arenas, that is, world regions with very dense concentrations of globalizing activities. In this example, 307 of US law offices abroad, or 86% of the total, are to be found in these three regions. Each of these globalization arenas is very different, but they all have created massive demand for legal services in recent years: western Europe as an established core region which is very much implicated in the globalization of the world-economy; Pacific Asia with, until very recently, its collection of the most rapidly growing national economies in the world-economy; and, eastern Europe with the opening up of former command economies and the consequent numerous privatization opportunities. Table 1 presents the full world regional breakdown of this data. It shows the surprising low numbers of US law offices in Latin America and the Middle East, confirming their failure to become contemporary globalization arenas, while both sub-Saharan Africa and south Asia almost fail to feature at all in this illustration of globalization (Also see Flood, 1995: 144).
As well as these regional disparities, a second very obvious feature of Figure 1 is the concentration of US law offices in a few major cities. Although 70 cities are featured on the map, 33 of these have just one US law office and a further 22 have just 2, 3 or 4 such offices. The remaining 15 cities house 269 offices, which is 73% of the total. These cities are ranked in Table 2, where all except Mexico City and Riyadh come from our three globalization arenas. However, the most notable feature of this table is the dominance of London, which alone accounts for 17% of all offices of US law firms abroad. Also, notable is the importance of Hong Kong in Pacific Asia, which easily outscores both Tokyo and Singapore. This relates to the legal accessibility of Hong Kong, especially in relation to the highly restricted Japanese legal system (Page, 1994a; Grondine, 1994). This Hong Kong node is so well-established that the anticipated moves to Singapore with changing political status did not materialize (Page, 1994b). Finally we can note that there is possibly a relevant break in the distribution at Frankfurt, suggesting eight prime world cities outside the USA for this analysis. This tentative finding is given more substance by it being supported in our analysis of London law firms foreign offices (Beaverstock et al., forthcoming). As we would expect, all eight prime world cities are located in the globalization arenas. However, it does seem to us to be quite remarkable just how uneven is this particular geography of globalization: 59% of all US law firms' foreign offices are to be found in just eight locations.
US Cities and the World
Figure 2 shows the location of the origin offices of the 100 US law firms with foreign offices. The dominance of New York is immediately apparent, with one third of US law firms with foreign offices originating from this one city. This is entirely in keeping with the city's historical functional role as the USA's gateway to the rest of the world. The only other cities to feature prominently on the map are Washington, DC, Chicago, and to a lesser extent, Los Angeles. None of this is particularly surprising: the latter two are commonly featured as the USA's two world cities after New York, and in the special case of law, Washington, DC is particularly important because of its political role (Lynch and Meyer, 1992). We will define these four as the USA's prime world cities in the globalization of law.
The distribution of these 100 foreign-officed law firms does not exactly mirror the overall pattern of large law firms in the US. Obviously many of the wholly domestic law firms are smaller and more widely dispersed across the US: 49 cities are represented in the whole set of top 250 law firms, but only 20 of these cities feature firms with foreign offices. Furthermore, there are important differences at the top of the law urban hierarchy. In Table 3, the 15 cities with 5 or more top 250 law firms are ranked in terms of both all such firms and those with foreign offices. These rankings confirm the relative importance of New York, Chicago and Washington, DC, but show that the two traditional North East 'lawyer's cities' of Philadelphia and Boston have remained important locations for domestic legal services only. Perhaps due to the proximity of New York, a gateway shadow effects these two cities, which are ranked below both Minneapolis and Cleveland, in terms of foreign practices. More importantly, it is Los Angeles, rather than the traditional law centres of Boston and Philadelphia, which features as the USA's fourth prime world city in this analysis.
We are now in a position to relate the four US prime world cities to the eight non-US prime world cities identified earlier. In Table 4, US law firm offices in the eight non-US cities are identified, in terms of their origin offices across the four US cities. For instance, of London's 63 US law firm offices, 24 are from New York, 8 from Washington, DC and 5 each from Chicago and Los Angeles. The percentages relate to the proportion of a US city's law firms with foreign offices, who have offices in the given non-US city. For instance, 24 of New York's 33 law firms with foreign offices have a branch in London, giving a score of 73%. Percentages are given so as to compare the US cities in terms of their relative distributions across the other world cities. As would be expected from the previous analysis, London again dominates, being the most important foreign location for all four US cities. However, beyond this first finding, there are some interesting contrasts. First, both New York and Chicago have general patterns of coverage across all eight non-US cities, whereas, both Washington, DC and Los Angeles are more specific with their more uneven distributions. Second, Washington's political bias is shown in its unevenness, highlighting Brussels in particular. Third, Los Angeles' Pacific bias is shown in its unevenness highlighting both Hong Kong and Tokyo. Hence, we can argue that, in terms of law globalization, Chicago is rather more like New York, and is thus more globalized in its world city representations.
GEOGRAPHICAL STRATEGIES AND GLOBAL LAW FIRMS
Aggregating data on law firm offices to city totals does provide a clear picture of the overall patterns in the globalization of law, but we must be careful not to neglect the decision-making unit, the law firms themselves. It is only at the level of the firm that we can begin to understand the processes which are producing the patterns observed above. For instance, not all our foreign offices data relates to what may reasonably be called global strategies. This is clearly shown in Figure 3, illustrating the distribution of the 100 law firms with respect to their the number of foreign offices. A third of the firms have just the one office and a fifth only two offices, implying that the majority of firms with foreign offices have merely an international foothold in the globalizing law business. At the other extreme, however, the top seven firms in Figure 3, have 128 foreign offices between them. Clearly globalizing remains an exceptional activity amongst US law firms. Spar (1997, 12) asks the question why so few firms have expanded massively abroad, and relates this to the opportunity costs in terms of domestic practice, particularly with foreign practice subject to multiple national restrictions (see Kilimnik, 1994) .5 But, competition has pushed globalization ahead, as firms strive to be 'at the party' in what is seen as 'clearly the wave of the future' (Spar, 1997, 13, 21).
The study of globalizing strategies emphasizes the importance of 'branding', the ability of firms to acquire a reputation for quality assurance across multiple jurisdictions (Lovelock and Yip, 1996; Spar, 1997, 21). But, in addition, to be a pre-eminent global law firm 'you have to be in certain strategic cities', according to David Clossey, Head of Europe at Jones Day Reavis & Pogue (Lee, 1993a). In short, firms need to be in the right places to provide assured service practice and those places are the world cities, we have identified previously. In this section, we begin by identifying specific geographical strategies of law firms, in terms of the city patterns previously observed. However, in order to understand more fully the most developed globalizing practices, we need to look at key case studies. In the second part of this section, we focus upon the three law firms who have been the leading proponents of the globalization of legal services in the USA.
Seven Geographical Strategies
We have developed a typology of geographical strategies based upon our previous analyses. Specifically, we allocate firms in terms of the distribution of their foreign offices in the three globalization arenas and the eight prime non-US world cities. The resulting seven geographical strategies are as follows.
Type 3: the global strategy is where a firm has offices in prime world cities in each of the three globalization arenas. Only 8 firms meet this condition.
Type 2A: the Eurasian strategy is where a firm has offices in prime world cities in both western Europe and Pacific Asia. 29 firms qualify under this category, the second highest frequency.
Type 2B: the European strategy is where a firm has offices in prime world cities in both eastern and western Europe. There are 7 firms in this category.
Type 1A: the western European strategy is where a firm has offices in prime world cities only in western Europe. This is the category with the highest frequency, 33 firms meet this criterion.
Type 1B: the Asian strategy is where a firm has offices in prime world cities only in Pacific Asia. There are only 6 firms in this category.
Type 1C: the eastern European strategy is where a firm has an office in only one prime world city, Moscow. This is, not surprisingly, the smallest group with just two firms.
Type 0: idiosyncratic international strategy is where a firm has none of its foreign offices in any of the eight prime non-US world cities. This suggests specific historical or personal links and 15 firms come into this category.
These seven geographical strategies can be related back to the origin city of the firms to further illustrate the roles of US cities in the globalization of law. In Table 5, the strategies of the law firms from eight cities are distributed across the typology. New York dominates the global category in keeping with its general gateway function, but Los Angeles is the most interesting case amongst the top four. The least convincing as a US world city in Table 3, this new table tends to confirm our previous decision to give Los Angeles world city status in the globalization of law. For instance, compared to San Francisco and Seattle, which are ranked next in Table 3, Los Angeles has a much more impressive array of strategies, second only to New York in the total of types 1 and 2. This analysis also highlights Houston as an incipient US world city in law globalization. The contrast with Dallas is stark. Although both cities have just four firms with foreign offices, Houston is very well represented in prime world cities across globalization arenas, whereas, Dallas has firms with offices only in Mexico City.
Global Strategies of the 'Big Three'
In the remainder of this geographical analysis, we concentrate solely on global strategies. As reported above, this limits us to just eight firms and we focus on the top three cases in Figure 3: Baker & McKenzie originally from Chicago; and White & Case; and, Coudert Brothers from New York. These three firms stand out not only because of their number of foreign offices, but also in terms of the relative balance of their foreign work to domestic work. For instance, in terms of location of lawyers, their foreign-based lawyers as a percentage of all lawyers in the firm is far above all rivals: 77%, 41% and 43% respectively (the next two highest are 32% and 25%). For our case studies, therefore, we have chosen the three companies most committed to globalization.
Baker &McKenzie is the largest law firm in the world and is the most globalized, with 1800 lawyers working outside the USA (Figure 4). Their publicity claim that "Baker & McKenzie are everywhere" is only moderate hyperbole; they have 150,000 clients world-wide. They are the law firm with the longest global pedigree, having originally grown internationally in the 1950s and 1960s to service the outflow of US investment across the world. Their very strong 'pre-globalization' international activities accounts for the distinctively wide geographical distribution shown in Figure 4. This is particularly reflected in their presence in Latin America: Caracas was their first non-US office, opened in 1957. This history gave them a head start when globalization of legal services began in earnest in the 1980s. The result is that Baker & McKenzie is in a class of its own as a global law firm for reasons other than simply size and geographical scope.
First, Baker & McKenzie are intrinsically global in their organization. Although they operated originally through a hub and spoke system of offices centered on Chicago, they claim now to be a 'decentralized global partnership'. They are an example of what Goldstein (1998) has called 'homeless' law firms, who decline to identify a principle office. In fact, according to Lee (1993b, 9), the Chicago office 'is emphatically not its headquarters' - their publicity material identifies Chicago as merely the 'founding office of the Firm'. In deference to this, the chairman of the partnership works out of Chicago, but this implies no centralization. In fact, Baker & McKenzie have been likened to a franchise operation - denigrated as 'McLaw' (Stevens, 1987) - organized separately in each country where it practices. The hundreds of partners all over the world each have an equal say in the policy of the firm. Eight partners form the Management Board of the Executive Committee who meet regularly in different cities across the world. Despite the firm's origins, there is no American dominance, a recent chairman was an Australian from the Hong Kong office. Quite simply, Baker & McKenzie 'does not have foreign offices, it simply has offices' (Lee, 1993b, 9).
Second, Baker & McKenzie are intrinsically global in practice. This is most clearly illustrated by "BakerNet" their internal communication system. As well as providing instant communication between offices for their various project developments, it also provides instant access for clients to their lawyers' offices. Becoming a client of Baker & McKenzie means having global accessibility for transfer of documents, advice and information around the clock and across the globe. BakerNet is organized around three hubs centered on Chicago serving offices from Toronto to Santiago, London servicing offices from Madrid to Almaty, and Hong Kong serving offices from Beijing to Melbourne.
Third, Baker & McKenzie operate through a global-local nexus due to the inherently national nature of law. Although 'English is the "Firm Language"', the firm claims to be 'multicultural': 'our business is based on humility and respect for other cultures' so that 'the firm maintains a 'global network of offices with each office having strong local roots'. We can see how this nexus operates by focusing on the Bangkok office within the firm's Pacific Asia organization. Baker & McKenzie are the largest Thai law firm with most of their Bangkok lawyers licensed to practice law in Thailand. However, it describes itself as Thailand's 'most successful hybrid (local/international) firm'. Partner experience includes work in the New York, Sydney, Hong Kong and Singapore offices, and, in addition, the Bangkok office is part of a regional service for 'Asia Pacific,' linking it to 12 other offices in Asia, Australia and California. The Hong Kong office is the 'co-ordinating point' for this service, and 'manages and supports' the China group practice and Vietnam group practice, as well as the 'Indochina Resource Centre'. Clearly this is an integrated hierarchical arrangement which links the national through the regional scale to the global.
This meshing of geographical scales is not merely an organizational structure. Baker & McKenzie have a 'professional and personal development' programme as a continuous learning process for their lawyers. As well as international and regional practice group meetings, regional associates meetings are held every year to bring people from different offices together. In addition there is an Associate Training Programme which involves transfers of associates between offices to broaden experience a provide new perspectives. In this way Baker & McKenzie provide a service of 'creative, but practical problem solvers' who transcend the routine work which is often carried out in-house by the 'internal lawyers' of major clients. No longer able to prosper by simply servicing clients, the firm attempts to offer 'clear added value', a service qualitatively different from its rivals.
To conclude: Baker & McKenzie has used its large size to create something very close to a global network reflexivity in a truly global law firm.
White & Case are the seventh largest US law firm, but are ranked second in terms of foreign offices. Although not as dense as Baker & McKenzie's office geography, they are represented on all continents (Figure 5). In many ways they are similar to Baker & McKenzie in their operations: they have an electronic infrastructure which makes their 'global resources' accessible to clients, and they claim 'a critical mass of US, English and domestic lawyers throughout the world who are either native to or fully integrated in the regions where they are based'. However, unlike Baker & McKenzie's decentralized global partnership, White & Case operate as a single partnership and New York is emphatically the headquarters: the 310 lawyers in this one office comprise 41% of the firm's world-wide total. Nevertheless, their geographical organization has clear parallels with Baker & McKenzie. For instance, their Hong Kong office 'serves as the base' for the Asia/Pacific practice serving China and south East Asia. Perhaps more revealing is the Miami office, which serves as 'the hub' of the Latin American and Caribbean practice. This is despite having offices in Mexico City and Sao Paulo.
Whatever their organization, White & Case, like Baker & McKenzie, have to sell their legal services in terms of quality rather than by price competition. Interestingly they emphasize delivery of a complex product requiring specialised knowledge which is close to what we have previously identified as a network reflexivity:
On a daily basis, our clients are involved in undertakings documented under four or five governing laws and of interest to as many taxing authorities; in transactions involving principals and lenders from a dozen countries, or in disputes involving assets in multiple countries. We move quickly, efficiently and with substantial knowledge of the differing terrains to complete deals, mitigate problems, obtain information and resolve complexities simultaneously in many places and across numerous dimensions.
This firm's activities, or at least their aspirations, certainly suggest a knowledge collectivity which transcends any single territory, something to be created in the particularly connected places which are world cities.
To conclude: in comparison with the overtly global Baker & McKenzie, we can describe White & Case as a US-centred, but nevertheless still very much a global law firm.
Coudert Brothers are only the 60th ranked US law firm, but their self-description as 'a Global Law firm' has much merit.7 As Figure 6 shows, they are well-represented in the globalization arenas, but have little representation beyond these three world regions - we address this feature with respect to Latin America below. In many ways, Coudert Brothers lie between Baker & McKenzie and White & Case in the organization of their globalizing practice. They claim to be 'a world-wide law firm with partners from many nations - not simply an American law firm with foreign offices'. Their offices both inside and outside the USA are referred to as 'global offices'. Hence, they do not refer to their New York office as headquarters. However, there is no integrated global organization of autonomous partners in the manner of Baker & McKenzie. Like both the other firms they claim to mix sensitivity 'to local markets and practices,' with an ability to keep 'world-wide business law firm objectives at the forefront'. To meet this end while relying on a smaller network of offices requires more distance representation. For instance, the large Paris office includes African, Asian and CIS/Eastern European practices. We can see how these work by looking specifically at Indonesia. In the former, the practice is made up 3 lawyers in Jakarta, 3 in Singapore, 3 in New York, 2 in Sydney and one each in Washington, DC, San Francisco, Los Angeles, Hong Kong, Bangkok, Berlin as well as Paris. In contrast, how does Coudert Brothers service its clients in Latin America, where it has only a single 'global office' (Mexico City)? Here the firm uses a network of local council distributed across 20 countries. However, most of its work (63% in 1996-7) was in just four countries (Argentina, Brazil, Columbia and Mexico). Furthermore, since US clients outnumbered local clients by more than two to one, it is the New York office which is the point of contact for the Latin American practice.
The Russia and CIS Practice illustrates best Coudert Brothers as a smaller global firm combining its its geographical scope with servicing a particular niche. London is the key office because 'London is emerging as the center of finance for this region'. The Russia and CIS practice is 'headed up by 12 lawyers, 3 in London, 2 in Moscow, 2 in New York and one each in St Petersburg, Washington, DC, Montreal, Denver and Berlin. This practice claims to provide 'creative solutions to our clients' complex business needs' through combining knowledge of the rapidly changing legal and economic situation in the region with wider global experience. Most of their Russian lawyers have degrees from American Law Schools and a majority have obtained practical training in 'Western corporate law' through spending significant periods of time in one of the firm's three main offices in New York, Washington, DC or Paris. In addition the firm specialises in energy and natural resources projects for which it claims to be 'the premier advisor' in Russia. It trumpets its awards as the law firm with the best knowledge of energy law in the former USSR (from Petroleum Economist) and as 'outstanding American pioneer in Russia' (from the Russian-American Chamber of Commerce) to claim the role of 'a trailblazer in this constantly changing legal environment'.
To conclude: clearly this firm is not as globally-organized as Baker & McKenzie, overall is less US-centered than White & Case.
Overall, we can note that although these three globalizing law firms have quite different philosophies of organization underlying their activities, their practices as global geographical strategies are remarkably similar. This suggests that it is external influences, the general context of globalization, which are more powerful than internal factors, such as formal organization. However, we should not treat their claims uncritically, much of their marketing material owes as much to aspiration as to current practice. As 'global firms', we must recognise their particular problems. At the heart of this form of organization is the need to create a workable balance between overall global co-ordination, to ensure quality branding, and national autonomy, to ensure local sensitivity. The jury remains out on whether any of these three law firms have achieved the right balance. Certainly Baker & McKenzie have their critics who point to relatively low returns per partner and quality control problems (Spar, 1997, 22-3). This has resulted in the firm losing key partners in recent years (Lee, 1993b, 11). Coudert Brothers have fared even worse, with a particularly low profit per partner record, again resulting in loss of key partners (Spar, 1997, 19, 23). Globalization is not easy .8
CONCLUDING REMARKS: INFORMING GLOBALIZATION
Although the globalization of law is of intrinsic interest in its own right, it must be seen also as part of the larger pattern of globalizing tendencies. The practices we have described above, are both consequences of other forms of globalization, and they contribute to facilitate additional globalizations. In particular, they illustrate developments in both economic reflexivity and geographical centrality. We have found five clusters of findings which relate directly to these two concepts, the first three relate to reflexivity, the last two to centrality.
First, our study helps us to put globalization in perspective. Our very first point was that it was a minority of major US law firms which have foreign offices (100 out of 250) and, furthermore, most of those have only a small international foothold. Our last point was how difficult globalization can be. This relates to the fact that globalization requires much capital and labour input to develop a reflexivity to make it work. And it will only work if this reflexivity can be harnessed at such a scale as to make 'megalawyering' profitable. Hence, globalization is a tendency the vast majority of US law firms have resisted. Therefore, the worldwide patterns we have presented may be interpreted in one of two ways. They may represent a trend for the future, where Baker & McKenzie and their ilk are pioneers. But there is nothing inevitable about globalization: global law firms are not unmitigated successes, they may merely represent a 1990s experiment in organization which will continue to suit a small minority of firms, but no more. Whatever the case, at this time we must remember that 'the emergence of global law has not made all firms global, nor has it made all global firms successful' (Spar, 1997, 14). How 'deep' can network reflexivity ever be?
Second, since law is quintessentially a state-based code, its operation beyond a single state makes it particularly interesting in terms of local-global relations. In particular, national jurisdictions have to be respected, requiring local qualification and certification, before a global service can be offered. This was very clearly shown in our treatment of the three US law firms most committed to globalization. All three prided themselves on the quality of their local legal knowledges and offer a service which links local practice into their global resources. Generally, the employment of local lawyers has been a key strategy in the growth of a global field of law as 'hybrid' organizations. This is the key challenge of globalization, where territorial reflexivity meets its network equivalent. However, all globalizing activities have to accommodate in some form to local circumstances (Daniels, 1993; Dicken, 1998); law is interesting because it represents the limiting case because obligatory local accreditation means that the global law firms are necessarily multicultural in knowledge and practice to a degree not necessarily found in other globalizing firms.
Third, there is the question of what exactly is a 'global firm'. This is possibly the most creative element of US law firms international activities, where they have striven to find out how to organize for network reflexivity. We have identified global firms in our discussion and this runs counter to the argument in the premier text on the geography of firms under conditions of globalization (Dicken, 1998, 193-9). Dickens derives 'the myth of the global corporation' from the fact that corporations cannot be 'placeless' and maintain their national characteristics despite global expansion. In his subsequent discussion of corporate organization (pp. 201- 42), he describes integrated global corporations, but seems not to have come across the 'homeless firm'. To the degree that the latter is achieved, it would seem to suggest such a dilution of national origin effects as to effectively undermine Dicken's 'myth'. As a new category of corporation, perhaps legal firms who do not have a headquarter office are pioneering a more global approach to co-ordinating world-wide commercial practices. Certainly, these are very interesting 'global firms' which warrant careful future scrutiny.
Fourth, we illustrate very clearly the centralizing tendencies within globalization, at both regional and city scale. For the former, an uneven nature of globalization is starkly illustrated in terms of its varying intensity across the world. In particular, we used the concept of a globalization arena to identify regions of 'dense' global presence in the late 1990s. Obviously, law firms are servicing their clients in provision of legal advice so that their investments in foreign offices indicates globalization arenas in more than just law. In this way we specify quite precisely the uneven geography of globalization as discussed, for example, by the contributors to Holm and Sorensen's (1995) book on 'uneven globalization'. Furthermore, it should not be assumed that because our data precedes the Pacific Asia currency crises, that this arena is likely to loose its globalization focus. Quite the opposite seems to be the case because, as Jarrett (1998) argues, 'Tough times provide opportunities'. For example, Baker & McKenzie's 120 Asia-Pacific partners at a recent meeting in Sydney agreed to form a specialist 'debt-restructuring practice' and plan to expand further in the region opening a new office in Kuala Lumpur in 1998.
Fifth, despite the state basis of the law, the practice we have described above is essentially trans-state in nature, with cities rather than states being the key locations in the organizational geographies. In particular, a few key cities - we have identified just eight outside the USA - dominate the globalization of law by US firms. These are Sassen's (1994) strategic places in the new geography of centralization. It is noteworthy that, unlike most other world city studies which have focused typically upon financial services, we do not identify New York, London and Tokyo are the three top 'global cities' (Sassen 1991, 1994). In our study, Tokyo is not the prime location in Pacific Asia, that position is clearly held by Hong Kong. More generally, in all eight cases, the cities represent more than bases for US law firms to operate in the jurisdictions of their respective countries. This is most obvious with Singapore and Hong Kong (which developed as a world city before reunification with China), but it is equally true, albeit to different degrees, for the other world cities. London, in particular, operates as primus inter pares amongst non-US world cities, which may have much to do with the history of the UK, but has little or nothing to do with the current UK economy outside of London. This is the most far-reaching feature of our empirical analyses. What we have shown is a glimpse of an alternative global order to the traditional international mosaic of sovereign states: a network of information flows with world cities as the nodes where a global future of humanity is being actively constructed beyond the recall of 'politicians', but not necessarily of 'citizens' (Castells, 1996).
We would like to thank the Economic and Social Research Council for funding this research project (R000222050).
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1. These quotations are taken from these law firms web sites http://www.whitecase.com/ and http://www.bakerinfo.com/ (Note that if no reference is cited then the quotation has been taken off the firm's web site). An important point to take on board when looking at firms web sites is to realize that firms use their sites to promote their services to clients. Our robust empirical analysis gets behind the claims these firms can make about their 'globalness' to examine the true extent of their globalization. When estimating the global presence of a law firm overseas offices are a solid indicator of a firms geographical scope and commitment (because of the high costs involved) to providing a global service. Using any other measure is questionable because they are much cheaper and one has to bear in mind that firms are always keen to present an "international image" (international visibility, having an international presence on your notepaper, or a globe on your web site, is a very cost effective way to attract clients from both home and abroad). Indeed, Patrick Stewart (1991, 9) writes that when a firm has no office, but has an 'association' or 'affiliation' this often amounts to no more than "non-exclusive arrangements backed up by a few joint projects and not much more than the hope of referrals". However, an important caveat even when simply counting offices as a measure of a firms global presence is to be aware that, "Firms proudly announce the opening of each new office abroad ... though they are often more discreet about the contraction and closure of offices" (Abel, 1994, 738).
3. Some of the 'globalization drivers' for law are: Client base; Organization to reduce risk; Competitive forces; Technological advances; Europe and EMU; Merger activity and accountancy firms; General worldwide deregulation and liberalisation of trade in services; Changing production patterns (i.e. flexibility and the 'global factory'); Linked financial markets; Increased importance of international trade and regional trading blocs (EU, NAFTA, etc.); Structural adjustment and privatization; Hegemony of neo-liberal concepts of economic relations promoted by the IMF, World Bank, and GATT; Worldwide trend towards democratization, protection of human rights, renewed interest in "The Rule of Law"; and, the emergence of supranational and transnational actors promoting human rights and democracy. We have discussed some of these drivers in more detail in Beaverstock et al. (forthcoming). Also see Trubek et al. (1994, 409-410) and Dicken (1998).
4. This pattern is mirrored in Europe with foreign law firms establishing a presence in both London (the key financial centre) and Brussels (see Budden, 1993) which has "become the Washington, D.C. of the east, where it is necessary to have a presence in order to lobby the Commission" (Flood, 1995, 150; Sontag, 1989). The pattern is also found at the national level. For example, in Italy law firms tend to have offices in both Milan and Rome because, "the political economy of Italy is such that most large international financial deals are made in Milan, but require the sanction of the government in Rome, creating pressure on a number of firms to try to maintain offices in both cities" (Flood, 1995, 155).
5. There are, of course, very high start-up costs for a business which has traditionally relied upon building relationships with clients. Hence foreign offices have gained a reputation as 'loss-leaders'.
6. See footnote 1 for web site source.
7. This firm's web site is http://www.coudert.com/. Interestingly, Abel (1994, 738) highlights the fact that the overseas expansion of Coudert is a recent venture. He writes that, "Although transnational law practice is not new - Coudert opened its Paris office more than a century ago - most of the growth has occurred in the last two decades, and most of that since the 1980s".
8. In addition, of course, there is the other side of the 'globalising story' we have told here: there is often national resistance from local law firms who have used various means to ensure international law firms do not have unrestricted access to their national market (Burnett, 1994).
Table 1: World Regional Distribution of US Law Firm Offices outside USA
Table 2: Major Non-US Cities in which US Law Firms have Offices
Table 3: US Cities Ranked by Law Firms in Top 250 with Number of Foreign Offices
Table 4: Branches of US Law Firms in Prime Non-US World Cities by Headquarters in US Prime World Cities
Origin Offices of US Law Firms in:
Table 5: Geographical Strategies by Firms 1
1. Treating the Top 8 world cities as the prime locations, the following strategies are identified:
3: Offices in prime cities in three global arena (WE, PA, EE)
2A: Offices in prime cities in WE and PA
2B: Offices in prime cities in WE and EE
1A: Offices in prime cities in WE only
1B: Offices in prime cities in PA only
1C: Offices in prime cities in EE only
0: No offices in prime cities
WE = Western Europe
PA = Pacific Asia
EE = Eastern Europe
Figure 1: Foreign Offices of US Law Firms, 1997
Figure 2: Origin Offices of US Law Firms with Foreign Offices, 1997
Figure 3: Numbers of Foreign Offices per US Law Firm, 1997
Figure 4: Offices of Baker & McKenzie, 1997
Figure 5: Offices of White & Case, 1997
Figure 6: Offices of Coudert Brothers, 1997