It is a well established cliché these days that wealth management operates in a global marketplace. Few firms set out to embody that reality more than the law firm, Baker & McKenzie, which is frequently at the cutting edge of key industry issues.

It is a well established cliché these days that wealth management operates in a global marketplace. Few firms set out to embody that reality more than the law firm, Baker & McKenzie.

Some numbers illustrate its global scope: Baker & McKenzie has 67 offices in 39 countries, fee income of $2.1 billion, more than 3,900 fee earners out of approximately 10,000 staff, and clients among some of the world’s biggest private banks and jurisdictions. (This law firm, though, is strict about confidentiality: it is rare to see it disclose a client’s name without first receiving their consent). It is the largest law firm in the world by revenue, according to the Legal Business Global 100 Survey 2010.

The firm has come a long way from its American founding in 1949. It was founded by Russell Baker, who originated from Wisconsin in the US and John McKenzie, another US lawyer. For years both men worked and flourished in the Chicago area of the States. Baker & McKenzie’s first foray outside of the US was in Venezuela – the founders were quick to identify the long-term potential of Latin America as a place to do business. And its overseas reach has grown, with London, Zurich and Singapore all key offices catering for its wealth management and other work.

Its lawyers and consultants have wrestled with some of the leading controversies of the international wealth management scene. For instance, Philip Marcovici, who used to be one of its top partners and is now involved with an associate business of Baker & McKenzie, LawInContext, has played a central role in helping the tiny Alpine state of Liechtenstein craft the Liechtenstein Disclosure Facility with the UK. (The facility is regarded as being one of the more astute deals of its kind).  It is the kind of high-profile case that this law firm deals in regularly and the constant flow of regulatory and tax changes from governments ensures that this line of business will remain strong for a while yet. Such work also means that this firm is well placed to offer sharp insights, and therefore it is a regular provider of expert commentary.

There have been some recent milestones. In addition to becoming the largest law firm in the world in terms of revenue, the wealth management practice has once again received positive third-party endorsement.

The 2010 edition of the Legal 500 directory ranks the firm’s private client work with generally high marks. Within the contentious trusts and probate category, the directory ranks Baker & McKenzie as a top-tier firm; on the personal tax, trusts and probate side, it gets a second-tier ranking; and also recognised is the firm's investment funds work.

Commentary from Legal 500 says: "Baker & McKenzie has ‘an excellent, virtually unrivalled reputation for international and cross-border tax planning’, and is widely viewed as a market leader in advising high net worth Middle Eastern and Russian clients. Paul Stibbard is ‘very experienced and knowledgeable, not only on tax and legal issues but also on the essential human aspects to achieve objectives’. Ashley Crossley ‘provides excellent technical and holistic advice and is good with clients’."

So what essentially makes this firm tick? WealthBriefing recently caught up with Ashley Crossley, who is chair of Europe and Middle East Wealth Management and is a co-ordinating partner for the firm's global private banking clients. He spoke from the firm’s offices in New Bridge Street, London, an area spanning the capital’s traditional legal neighbourhood and bordering onto the City financial district. It is an appropriate location.

Crossley has advised high net worth Russian/CIS individuals and families in the UK and worldwide, on their cross-border tax and trust structuring, asset-protection and investments, among other achievements. He has been involved in some of the most significant and high profile Russian real estate investment projects of the last few years in the City of London. He is a familiar face in the wealth management arena: Crossley is the lead advisor to several of the leading international banks in relation to their Russian/CIS desks and is the Russian/CIS editor for the STEP Directory, for example. His is a career that has taken him far away from home.

“The way we work, by its nature, is incredibly international. Primarily, we’re an international firm dealing with clients on an international basis. Some 80 per cent of our clients are not even resident in the UK,” he said.

Its 67 offices, for example, “gives us tremendous geographical support”, said Crossley. For instance, B&M staff can between them speak a total of 75 languages, drawn as they are from a total of 55 nationalities.  But London remains the principal hub: “London is a key financial centre and that’s where a lot of global wealth management is carried out. That’s why many of our major operations are co-ordinated from here.”

The sheer diversity and spread of this business means that while some B&M partners and employees stay in place for long periods, the firm does not have a problem with bringing in new people to keep apace with the latest knowledge and advice. Some of its top people are certainly in for the long haul: Gary Senior, managing partner in the London office, has been a partner since 1992 and reached his current status seven years ago.

Many disciplines

“The way wealth management is structured requires a lot of disciplines to be involved. The key here is the diversity of our people. It is very important for a successful law firm to have such diversity at its roots,” said Crossley.

“People who work here have to have a hunger for looking at the wider world,” he said.

With plenty of regulatory, tax, merger and other work on hand, Crossley says the firm is not planning to draw in its horns, even if some of its rivals might choose to retreat slightly amid uncertain economic times. (The “magic circle” law firm, Allen & Overy, chose to spin off its private client practice group as an independent firm amid a pay and recruitment freeze last year.)

“We are finding that there is some retrenchment by some law firms but our ambition, our vision, is to be the premier global law firm and that remains,” he said.

Wealth practice

Crossley has responsibility for setting the business strategy and co-ordinating how the practice develops markets across the region.

The practice covers four broad areas:

-- Commercial structuring (pre-IPO tax planning, trade sales, preparations for mergers and acquisitions, help for international entrepreneurs).

-- Personal legal services work. Such as setting up private trust companies (last year Baker & McKenzie set up more than 50 such structures.). It also gets involved in helping to structure family offices.

-- Fund structuring.

-- Banking confidentiality/exchange of information issues. Baker & McKenzie acts for various governments and on matters relating to the Organisation for Economic Co-operation and Development (OECD). Among its clients have been UK banks.

It gives advice, for instance, on how to negotiate dual tax agreements, and how such governments could enter the OECD “white list” of fully compliant tax regimes.

As mentioned above, the attempted crackdown by governments on offshore financial centres has made Baker & McKenzie a very busy firm. Different financial jurisdictions are looking to fine-tune the details of tax information exchange agreements so that they have a competitive advantage over other centres. For example, in the case of Singapore, an investigation against an individual can require that the person in question is informed that a request for data is sought – not all jurisdictions insist on this.

Baker & McKenzie also works with banks to advise them about the amount of disclosure they should provide, as well as how they should process information. It even advises firms on how to deal with internal political issues.

“A lot of clients we act for want to know what sort of confidentiality they have. One man’s banking secrecy is another’s data protection,” said Crossley.

In terms of regional hotspots, Crossley mentioned areas such as Latin America. “It’s always been a good area for us and is getting a lot more attention from the banks.”

“As for Singapore and Hong Kong, we are seeing a lot of work from there, particularly from firms trying to get into the European market,” he said.

In Asia, Baker & McKenzie does not just focus on classic wealth management businesses, but in areas of importance to the growing economies in countries, such as Malaysia, which includes the “'cultural industries' of media and entertainment,” he added.

The wealth management side of Baker & McKenzie is, of course, by no means all that this firm does, but it is an extremely important element and one, moreover, which is putting this business at the forefront of debate about issues that will shape the wealth management market. Whatever forces continue to press on the sector, it is certain that Baker & McKenzie will be an important voice and player in the future. It has already passed a half-century in terms of longevity – it may be not be surprising to see it make it to 100.