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					     SpEcIal      asian legal business ISSUE 8.4
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     riding the
     Vietnamese
     roller coaster


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                           law firms in Vietnam are being inundated with
                           deals, but do not have the lawyers they need in
                           order to cope. as Ben abbott reports, they have to
                           think fast to adapt to the new environment, and
                           will have to invest in the future in order to succeed




                           B
                                   eing a law yer in Vietnam today is as exhilarating as a
                                   peak-hour xe om ride. With the sharp growth in foreign
                                   interest in Vietnam, law yers are hurtling through the
                                   thick of a new, extremely busy and unpredictable legal
                           market and, just like a ‘motorbike hug’ through the chaot-
                           ic streets of Hanoi or Ho chi minh city, are having to adapt
                           quickly to fast-changing conditions – despite not being sure
                           of just what is around the next corner.
                             “I’ve been here since 1995 and, finally, we’re seeing a period
                           of real, sustainable growth, and a legal framework to support
                           it – ever yone is equally excited,” mayer Brown JSm manag-
                           ing par tner Dao nguyen says. But despite the new interest
                           in Vietnam being an adrenalin-filled ride, it is also a tr ying
                           time for firms, who are stretched to the limit. “the volume of
                           work has increased signif icantly over the past 12 months,”
                           says Vilaf managing partner tran anh Duc. “We’re overload-
                           ed with deals, and lawyers in all major practices here in Viet-
                           nam are spending very long hours in the office.”
                             the challenge of 2008 is how firms will respond. “It’s just a
                           question of how do we plan for the growth and the future to
                           expand even more,” nguyen says. “It’s not worrying about how
                           do I find work, but how do I find the office space and accom-
                           modate client needs?”


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       SpEcIal                                                                                                                  asian legal business ISSUE 8.4
       rEport
VIEtnam
       IntEl’S In-HoUSE IntEllIGEncE
     When Intel products Vietnam approached lam Vu thao with
     an offer to become the company’s first site counsel in Vietnam,
     it was a temptation he could not resist. Having already spent
     nine years in private practice, including with local law firm Vilaf
     as a senior associate, the chance to become the sole in-house
     legal counsel assisting with Intel’s US$1bn investment program
     in the jurisdiction was too good to miss. “I always knew I would            “In order to give
     like to become an in-house counsel at some point in my career,
     and it just so happened that Intel approached me with this                  good advice in
     fantastic opportunity,” thao says.
         Intel is currently building its seventh and largest assembly and        Vietnam, you need
      testing factory in Vietnam. after its silicon products are fabricated
      in the US and Israel, they are shipped to one of its assembly and          to have been here
      test sites worldwide (including those in china, malaysia and the
      philippines) for placement into external chipset packaging and             for a long time”
      functionality testing. the new facility in Vietnam, when it comes
      online in 2009, will have a total workforce of 2,000.                                                                              nicolas audier,
         “my job is to help put the project into operation,” thao                                                                      Gide loyrette nouel
      says. With an entire cross-section of legal issues to deal with in
      implementing Intel’s plan, thao says his main achievement as
      site counsel has been ensuring the project has met with no legal
      roadblocks. But being sole counsel, thao says, is not without
      its challenges. “When you’re working in a law firm, you always             the legal market
      have the colleagues next door to consult for an opinion on a               When compared to the current speed
      legal issue, but being the sole advisor here, you have to make             of growth, Vietnam’s previous economic
      the decision for yourself.” thao often relies on help from Intel’s         growth seems more like the pace of a stop-
      general counsel in Singapore, and other site counsel in asia.              start cyclo ride. However, firms have long
         Vietnam is not an easy place to be in-house. With its ever-             seen the market as holding future poten-
      changing legal landscape, and regular updates to both law                  tial, and have built strong practices.
      and regulation, keeping abreast of legal obligations can be                  Fr e s h f i e l d s , B a ke r & m cKe n z i e a n d
      challenging. “For a company like Intel, we have to comply with             allens arthur robinson are considered
      every requirement, so it’s necessary to keep up to date with               the market’s top tier law firms. likewise,
      the law and make sure we don’t miss anything.” thao says this              Frasers, Gide loyrette nouel and may-
      is where law firms come in. “I like to use a law firm that can             er Brown JSm have long histories in the
      proactively give us updates on any laws that could have an impact          market, and are the preferred providers                  Dao nguyen,
      on the Intel business. We don’t want them to wait until they ask –         of many clients. on the local side, Vilaf               mayer Brown JSm
      they’re in a position to get access to more new laws than us, and          and YK Vn are the more established
      we’d appreciate it if they let us know about that,” thao says.             full-service brands, while Vision & associates and a range of
         currently, Intel retains only one law firm in Vietnam – russin          fellow mid-tier firms provide strong competition. the likes of
      & Vecchi. as thao does not have time for thorough legal                    Indochine counsel form a new breed of quality boutique firm,
      research, he often consults russin & Vecchi when he needs to               born out of market growth.
      establish what the laws are in a particular area. For instance,              as entry to the Wto has attracted new business to Vietnam,
      Intel recently needed to know if there were any environmental              so it has new law firms. much was made of US firm Duanne
      and construction laws that would effect its erection of power              morris’ entr y to the market, while lovells is rebuilding its
      lines for the new factory in Vietnam. However, thao says he                on-the-ground team, though it currently manages the prac-
      is open to testing new law firms. “We have a very big project              tice out of Hong Kong. there are rumours that new foreign
      here, and there’ll certainly be legal issues coming up in the              law firms (such as allen & over y) may be looking at on-the
      future – we can’t handle everything in-house.”                             ground presences in the market, and interest from firms from
         It is being close to the Intel business that                            South Korea has been hot, with a number of offices established
      thao relishes most about his in-house                                      in the past year.
      role. “I have to understand the relevant
      business concerns, and the sophisticated                                   local knowledge counts
      internal structure and processes at Intel,”                                Firms agree on the fact it is local knowledge and experience
      thao says. though the learning curve                                       that counts in Vietnam. “Even if you do a million sophisticated
      has been challenging, the role also offers                                 deals offshore, you can’t implement them in Vietnam without
      personal rewards. “this is a place where I                                 the local tweak,” nguyen says. “You have to be able to under-
      can see how my legal advice impacts the                                    stand the history and meaning behind the law, as well as how
      business, and even impacts the company                                     to work within it to structure deals.”
      as a whole.”                                                                 Vilaf ’s tran anh Duc says this is how his and other local
                                                                   lam Vu thao   firms differentiate themselves for foreign clients. “We compete


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   VIEtnam laW FIrmS at a GlancE
 name                     managing partner           total fee     partners     total         total     offices in      most recognised practices              Fastest growing
                                                     earners                    associates/   lawyers   Vietnam                                                practice
                                                                                attorneys
 atIm consulting          trinh Hong Quang           9             2            3             5         Hanoi; Ho chi   corporate law; investment;             Investment
                                                                                                        minh city       regulatory & compliance
 allens arthur            Jim Dunstan (asia)         23            3            19            22        Hanoi; Ho chi   corporate/m&a (including               corporate/m&a
 robinson                                                                                               minh city       equitisations, foreign direct
                                                                                                                        investment); banking & finance;
                                                                                                                        real estate & projects
 Baker & mcKenzie         Fred Burke                 45            4            14            18        Hanoi; Ho chi   corporate & commercial (including
                                                                                                        minh city       m&a/FDI); infrastructure projects/
                                                                                                                        real estate; Ip
 Bizconsult law Firm      nguyen anh tuan            10            8            3             7         Hanoi; Ho chi   Foreign investment/corp; m&a;          Foreign investment,
                                                                                                        minh city       real estate & market analyses          (corp estab; m&a)
 Frasers                  mark Fraser                20            1            15            16        Hanoi; Ho chi   real estate/property development;      real estate
                                                                                                        minh city       corp & comm; banking & finance         development
 Freshfields              tony Foster                27            1            24            24        Hanoi; Ho chi   Banking & finance; corporate &         m&a
 Bruckhaus Deringer                                                                                     minh city       capital markets; m&a
 Gide loyrette            nicolas audier             29            1            22            23        Hanoi; Ho chi   corporate and commercial; banking      Banking & finance
 nouel                                                                                                  minh city       & finance; dispute resolution
 Indochine counsel        Dang the Duc               20            4            12            16        Hanoi; Ho chi   Investment (m&a/private equity/        real estate/
                                                                                                        minh city       funds); real estate & property;        property
                                                                                                                        corporate & commercial
 mayer Brown JSm          Suong Dao nguyen           36            2            27            29        Hanoi; Ho chi   real estate; banking & finance;        real estate &
                                                                                                        minh city       dept capital markets; infrastructure   commercial
 tilleke & Gibbins        John King                  15            1            14            8         Hanoi; Ho chi   Ip; foreign investment; labour         Foreign investment
 consultants                                                                                            minh city
 Vilaf-Hong Duc           tran anh Duc               14            9            5             14        2 (Ho chi       not supplied                           not supplied
                                                                                                        minh; Hanoi)
 VnIp law Firm            Susan nguyen;              6             4            6             5         1 (Ho chi       Ip; business risk advisory services    Ip services
                          Kevin nguyen                                                                  minh)
 note: Firms have supplied their own data. this table does not purport to be exhaustive




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       SpEcIal                                                                                                       asian legal business ISSUE 8.4
       rEport
VIEtnam




     with local expertise,” he says. “We have a strong team of local
     lawyers. Whereas international firms might have only four or
     five senior local lawyers, we have more than 10, and you can’t
     simply read the law and advise clients, you need to understand
     what is behind the law and how it works in practice.”
       the necessity for local knowledge is what makes Vietnam
     a tough market for new firms. “In order to give good advice
     in Vietnam, you need to have been here for a long time,” Gide
     loyret te nouel Vietnam managing par tner nicolas audier
     says. newcomer Duanne morris recognised this when attract-
     ing Baker & mcKenzie lawyers to start its office. nguyen says
     she cannot see new foreign firms starting from scratch in the
     current market, and anticipates the possibilit y of mergers
     with local law firms. “I can’t imagine a new foreign firm set-
     ting up a new law office now – it would be more logical to me
     that they’d look at taking over an existing business rather
     than start afresh,” she says.
       though f irms are competing on their histor y and experi-
     ence, many – particularly local law firms and new firms – also
     compete harshly on fees. local law firms charge significant-
     ly lower rates than international firms, and because local cli-       with international lawyers – we have recruited two, and will
     ents are very sensitive to fees, it is rare for international firms   look for more.”
     to work on the local side of deals. However, even Vilaf’s rates         this lack of supply and rise in demand is increasing asso-
     have increased by nearly 40% in the past year. new firms have         ciate compensation. “the cost of Vietnamese lawyers is more
     also been undercutting established players to get a foothold in       than it used to be,” audier says. “the salary for lawyers with
     the market.                                                           a few years pQE is US$5,000– 6,000 per month. It’s not what
                                                                           we’re paying in london, paris or new York, but it was US$500
     Finding the right people                                              a month five or so years ago.” audier says that sooner or later,
     Hiring and retaining experienced law yers is the main chal-           salaries will reach the level that it costs for foreign lawyers.
     lenge facing firms in Vietnam. all firms complain of the inabil-        much of this upward pressure is coming from the inside of
     ity to source lawyers with experience, and this is putting more       cash-rich investment bank s. they are snapping up law yers
     pressure on partners who have to cope with an increased work-         from private practice for roles in growing in-house depart-
     load, and lowering general work quality, as inexperienced asso-       ments. “as you know, the pressure at a law firm is very intense,
     ciates step into the breach.                                          and involves very long hours and a lot of stress,” audier says.
       “We want to recruit more local lawyers, but they aren’t avail-      “now lawyers have a choice of a law firm or to join a big com-
     able,” tran says. “I think the alternative is to recruit inter-       pany with a good legal department and a more normal life,”
     national law yers, and I can see more and more local f irms           he says.
                                                                             Firms are retaining law yers through a combination of sal-
                                                                           ar y increases, qualit y work , and training. audier says that
                                                                           while it is too soon for a local lawyer to be offered partner-
                                                                           ship with the firm, Gide offers associates competitive salaries
     “I like to use a law firm                                             and sends them frequently to European and london offices for
                                                                           training. other firms offer quasi-partnerships through share-
     that can proactively give us                                          holding companies in Vietnam, issuing shares to their senior
                                                                           local law yers. nguyen says JSm focuses on of fering law yers
     updates on any laws that                                              work and responsibility on quality deals.

     could have an impact on the                                           Investing to succeed
                                                                           nguyen says the firm has really “come from behind” in the local
     Intel business”                                                       market over the past two years, after committing to investment


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                           in growth. “In the next year, what will be critical for firms is
                           the resources they’ll put in place,” she says. “If they don’t put
                           in the resources, they can’t do the big deals – they’ll have to
                           seriously think about their plans for growth, and how they’re
                           going to achieve that.” She gives the example of HSBc, which
                           the firm helped incorporate locally as part of the first wave
                           of foreign banks recently. the bank is planning rapid expan-
                           sion of both branch and staff numbers, and nguyen says firms
                           have to commit to growth to service such clients.
                             With such rapid growth in the jurisdiction, firms will have
                           to adapt fast to change. though some foreign firms have built
                           strong practices over periods of slower growth, they will have to
                           change their mindset if they are to continue to compete. alB




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