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2008 International Law Firm Strategic Survey

Strategy questionnaire

As global events impact economic times, they have direct effects on law firms result and consequently law firms strategies. This years international strategic survey is designed to capture important consequences of these events and to report on the latest metrics, trends, and strategies. Using expanded matrices for selected questions, the Survey will be able to differentiate between firms strategies and strategies within firms. To keep the survey fresh each year, it will focus on three areas that are critical to international law firms.

Enhancements to the Survey this year include:

An in-depth focus on doing business in China, hiring laterals and retainingassociates Greater use of matrices, so that greater analyze of global strategies can be analyzed by country Reduction in the number of countries and grouping of countries into regions to simplify completion of the survey questions The emphasis on doing business in China, hiring laterals and retaining associates will spotlight topics that are debated by management committees and boards of international law firms. By periodically delving into specific spotlight topics, the survey will allow participants to measure changes in strategy over time and how economic conditions affect or influence those changes. In order for PwC to provide survey participants with a full range of benchmarking results and recommendations, we ask that you complete all relevant questions. The 2008 survey questionnaire is organized into two sections: Strategy and Finance/Human Resources. It is anticipated that a managing partner (or someone with an informed understanding of the firms strategy) will complete the Strategy section, while representatives from finance and human resources will collaborate to complete the Finance/Human Resources section. A final report will be generated from the data provided by firms completed questionnaires, which are expected to be accurate. However, neither PwC nor its consultants will audit or independently verify firms data or how the data was compiled. The survey report that will be issued represents the views of PwC, and firms should seek professional advice and independently assess their own situations before acting on any of the subjects discussed in the report.

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2008 International Law Firm Strategic Survey Questionnaire

Contact Information
Cost The cost for participation is $7,500, which includes an overall global report including analysis and commentary of the data presented. An invoice will be issued subsequent to report distribution. Defined terms Please refer to the defined terms found at the front of this questionnaire. All defined terms are in bold italic print. Confidentiality Fax number: __________________________________________________________ This survey is designed and managed to ensure that all information you provide is treated in complete confidence. None of the information obtained from these questions will be attributed to any individual or firm. Thank you for participating in the 2008 International Law Firm Strategic Survey. E-mail address: _______________________________________________________ Who completed the survey? Name: _______________________________________________________________ Position: _____________________________________________________________ Firm name: ___________________________________________________________ Address: _____________________________________________________________ Phone number: _______________________________________________________

To whom should the survey report be sent? Name: _______________________________________________________________ Position: _____________________________________________________________ Firm name: ___________________________________________________________ Address: _____________________________________________________________ Phone number: _______________________________________________________ Fax number: __________________________________________________________ E-mail address: _______________________________________________________

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2008 International Law Firm Strategic Survey Questionnaire

Defined terms
Associate: A non-partner-level lawyer or law school graduate who normally performs legal services on behalf ofclients. Attorney: A lawyer at a firm who is an associate, non-equity partner or equitypartner. COLA: Cost-of-living adjustment. Eastern Europe: Region including the following countries: Bulgaria, Czech Republic, Hungary, Poland, Romania andSlovakia. Equity partner: A partner who shares in both the profits and losses of the business, has voting rights and signs the partnership agreement/deed or owns shares in a corporation practicing law. Expatriate: An individual who is transferred from one office of a firm to a foreign office for a short-term assignment of less than three years and who is expected to return to the transferring office or to another office of the firm. Foreign offices: Offices in a country other than the principal country. Key strategic decisions: Decisions that relate to overall firm matters, such as structure, practice, clients, admission or withdrawal of partners, opening of offices or occupancymatters. Lateral: Attorney hired with legal experience from another law firm, law department or government employment subsequent to law school. Lateral attorney can be an associate, non-equity partner or equity partner. Local law: Law applicable for the jurisdiction of a particular office or country. Losses: The remainder of costs that exceed income/revenue. Losses do not include equity partner drawings ordistributions. Mainland China: The country of China exclusive of Hong Kong and Taiwan. Management committee: A group of partners and key non-partners who are responsible for the management of the firm and for making key strategic decisions affecting the firm; also known as a board. Middle East: Region including Bahrain, Dubai, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, the Palestinian territories, Qatar, Saudi Arabia, Syria, Turkey, the United Arab Emirates and Yemen. Non-equity partner: An attorney who is not an equity partner or an associate. A non-equity partner may be referred to as contract partner, guaranteed payment partner, salaried partner, fixed-distribution partner, income partner, international partner, local partner, country partner and/or foreign partner. Principal country: Country in which the firm is normally associated. Typically, the principal country is the country where the firm is organized or incorporated, where it earns the majority of its revenue, where most of its management is located, where global accounting support is located, etc. Profits: The remainder of income/revenue after all costs, but before equity partner drawings and distributions. The basis of accounting is not relevant unless there has been a change that affects the comparability of the amount reported. If this is the case, conform earlier amounts to the current basis of accounting, where practicable. Secondment: Term used to describe the transfer of an associate or partner (i.e., equity or non-equity partner) from one office to another on a temporary basis of normally two to four years with the intention that the person would return to his or her previous work office or transfer to anotheroffice. Support staff: All non-attorney staff who might answer phones, make copies, handle mail and deliveries, take care of library or research materials, IT personnel, secretaries,etc. Rest of Americas: Region including Canada, South America, Mexico, West Indies, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama, Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, Uruguay and Venezuela. Rest of Asia: Region including Mongolia, North Korea, South Korea, Taiwan, Cambodia, Indonesia, Laos, Malaysia, Myanmar (Burma), Philippines, Singapore, Thailand, Vietnam, Afghanistan, Bangladesh, India, Nepal, Pakistan and Sri Lanka. Rest of Europe: Region including Denmark, Finland, Ireland, Norway, Sweden, Albania, Bosnia and Herzegovina, Croatia, Greece, Italy, Portugal, Serbia, Spain, Austria, Belgium, the Netherlands and Switzerland. Russia: The country of Russia including Armenia, Azerbaijan, Belarus, Estonia, Georgia, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Moldova, Tajikistan, Turkmenistan, Ukraine and Uzbekistan.

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2008 International Law Firm Strategic Survey Questionnaire

Strategy

Instructions
Direct questions regarding the completion of the survey to Laurie Lieb in the US at Tel: +1(623) 561 8481 or Alistair Rose in the UK at Tel: +44(0) 20 7213 8792. Please return your completed survey by July 15. Please return North American surveys to: Laurie Lieb PricewaterhouseCoopers LLP 1850 North Central Avenue, Suite 700 Phoenix, Arizona 85004 USA Please return all other surveys to: Alistair Rose Esq. PricewaterhouseCoopers LLP 1 Embankment Place London WC2N 6RH United Kingdom It is recommended that a reliable delivery service with tracking capabilities be used when sending your confidential survey materials to the survey staff. Please indicate if you would like to receive confirmation of receipt of your participation materials. The survey questionnaire also can be downloaded from our website at https://www.pwc.com/lfsurveys.

Background and management

Question 1: What is the firms principal country, currency and year end that is being use to complete this survey? Principal country: ______________________________________________________ Currency used to complete survey (e.g., US$, , ): ________________________ Date of your most recent year end (provide the month/year): ________________

Question 2: Who in your firm is responsible for key strategic decisions affecting your foreign offices? Rank up to three with 1 being the most important. Firm managing partner/chairman/senior partner Firm management committee or board Partner(s) in charge of local office Regional managing partner One or two partners in the principal country ________ ________ ________ ________ ________

Question 3: What is the composition of the management committee? Enter numbers on the appropriate lines below. Number of equity partners in principal country office Number of equity partners from principal country who are assigned to foreign offices Number of other equity partners assigned to foreign offices Number of non-partners, including non-equity partners and non-lawyers ________ ________ ________ ________

Question 4: How many women are on the management committee? ________

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2008 International Law Firm Strategic Survey Questionnaire

Strategy

Growth strategy
Question 5: What are the three most important goals of your international strategy? Rank the options below with 1 being the most important. Increase geographic coverage Increase profitability Open offices in developing legal markets Maintain market position Respond to client needs Other (specify): ___________________________________________ ________ A. Competition from other global or local law firms ________ B. Culture/language ________ C.  Failure to deliver adequate profits within reasonable time period ________ D.  Key personnel reluctant to be assigned to or remain in foreign offices ________ E. Managing foreign offices ________ F. Regulatory or local laws G. Too few qualified lateral attorneys in foreign country H. Other (specify): _____________________________________________________ Question 6: In the matrix below, identify the obstacles or challenges to achieving your international strategy by country by entering the code(s) for up to three obstacles from the following list.

Country/Region Eastern Europe France Germany Hong Kong Japan Mainland China Middle East Russia United Kingdom United States Rest of Americas Rest of Asia Rest of Europe

Obstacle/ Challenge 1 ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________

Obstacle/ Challenge 2 ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________

Obstacle/ Challenge 3 ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________

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2008 International Law Firm Strategic Survey Questionnaire

Strategy

Question 7: In the matrix below, identify the reasons for opening a new foreign office by entering the code(s) for up to three reasons from the following list. A. Ability to extend core practices to new foreign offices B.  Availability of qualified lateral attorneys in foreign country/region C.  Ability to transfer existing partners and/or associates to other countries/regions D.  Clients requesting firms services in foreign country/region E. Competitors opened office in foreign country/region F.  Ability to obtain new clients in the new foreign country/region G.  Establish a market presence to refer work back to another office H. General growth prospects in foreign country/region I. Strategic fit with firms international strategy J. Other (specify): _____________________________________________________

Question 8: In the matrix below, indicate over what period of time you expect a foreign office to break even or become profitable.

Country/Region Eastern Europe France Germany Hong Kong Japan Mainland China Middle East Russia United Kingdom United States

12 years

34 years

5 or more years

Country/Region Eastern Europe France Germany Hong Kong Japan Mainland China Middle East Russia United Kingdom United States Rest of Americas Rest of Asia Rest of Europe

Reason 1 ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________

Reason 2 ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________

Reason 3 ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________

Rest of Americas Rest of Asia Rest of Europe

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2008 International Law Firm Strategic Survey Questionnaire

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Strategy

Risk management
Question 9: What level of financial investment does your firm plan to make in its foreign offices in each of the next three years? Based on the currency identified in question 1 and using the codes shown below, enter the appropriate codes in the matrix for each country. If you have multiple locations within a country, please average your investments for all offices in the country. A. Up to 250,000 Employee or partner fraud B. 250,000 up to 500,000 Malpractice issues C. 500,000 up to 1,000,000 Money laundering D. 1,000,000 up to 2,000,000 Reputational risk E. 2,000,000 and more Rogue partners Country/Region Eastern Europe France Germany Hong Kong Japan Mainland China Middle East Russia United Kingdom United States Rest of Americas Rest of Asia Rest of Europe Year 1 investment Year 2 investment Year 3 investment ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ Rogue client issues Technology Other (specify): ___________________________________________ ________ ________ ________ ________ ________ ________ ________ ________ Question 10: From the list below, check the top three risk issues that concern your firm. Associate turnover/separation Clearing client conflicts ________ ________

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2008 International Law Firm Strategic Survey Questionnaire

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Strategy

Business development
Question 11: From the list below, rank the four strategies that your firm uses to manage its global risk with 1 being the most important. Annual training (e.g., ethics, diversity, security, etc.) Audit committee Engagement letters Client acceptance and retention review Clearing client conflicts General counsel Internal audit function Management committee or board Review of attorneys work Risk committee Other (specify): ___________________________________________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ Question 13: What strategies are the most important in expanding business in your foreign offices in the next 12 months? Check the top five strategies below. Acquisition of laterals Exploit the firms expertise in a specialty Expand breadth of services to existing clients Expand practice groups or industry sectors to foreign offices Leverage the reputation of an individual attorney Leverage the reputation of the firm (brand) Offer discounted rates Pursuit of mergers/acquisitions Take advantage of privatization/deregulation Take advantage of sovereign wealth funds Utilize business development/marketing group Other (specify): ___________________________________________ Question 12: Who is primarily responsible for managing risk within the firm? Check one from the following list. Management committee or board Human resources The office of general counsel The office managing partners The managing partner/senior managing partner The risk management partner or risk committee Other (specify): ___________________________________________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________

Question 14: How do you differentiate your firm in foreign markets from the competition? Check the top three reasons below. Branding Cost effectiveness and rates Practice groups or industry sectors Quality of service Rainmakers Specialties Technology capabilities Other (specify): ___________________________________________ ________ ________ ________ ________ ________ ________ ________ ________

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2008 International Law Firm Strategic Survey Questionnaire

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Strategy

2008 spotlight on China

Question 15: How do you maximize business development potential in foreign markets? Rank the following strategies with 1 being the most important. Business development training Client feedback program Client seminars Cross-selling Industry focus groups Listings in directories and surveys Practice groups Publications Other (specify): ___________________________________________ ________ Office ________ Beijing ________ Hong Kong ________ Shanghai ________ Taiwan ________ Other (specify): ___________________________________________ ________ ________ ________ Question 17: Where is the firms principal business center in the Asia-Pacific area? (Leave blank if not applicable.) Beijing Hong Kong Shanghai Sydney Singapore Taiwan Tokyo Other (specify): ___________________________________________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ Year opened Question 16: In what year did your offices open in Hong Kong, Taiwan and mainland China? (Leave blank if notapplicable.)

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2008 International Law Firm Strategic Survey Questionnaire

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Strategy

Question 18: In the following matrix, enter the reasons that apply for opening your offices in Hong Kong, Taiwan and/or mainland China. Enter as many codes as apply. A. Establish a presence to service existing clients

Question 19: What challenges are you facing in opening or operating your offices in mainland China? Check up to five challenges below: Ability to practice Chinese law Accounting and tax reporting requirements ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________

B.  Establish a presence in Hong Kong or Taiwan to allow for entry into mainland China C. Obtain a presence through a merger with another firm D.  Need to provide local services to an existing client in mainland China E.  Need to provide existing client outside of mainland China with China-based services F.  Strategic business decision to be on the ground in a developing market

Conflicting advice about what other firms are doing Culture Currency issues Engagement letters for China work Invoicing and collecting bills from clients Knowledge level of business advisors

G.  Legal services for anticipated clients Language H.  Establish base to respond to business opportunities throughout the region Staff or employee issues I.  Other (specify): _____________________________________________________ Structuring practice in China Taxation of partnership or partners Reasons for opening an office Hong Kong Taiwan First office in mainland China Second office in mainland China Codes Time zones ________ Working with government officials ________ Other (specify): ___________________________________________ ________ ________

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2008 International Law Firm Strategic Survey Questionnaire

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Strategy

Question 20: Are you planning to open an office in mainland China during the following periods? Please enter Yes or No in the appropriate column. Location Beijing Shanghai Other (specify): _____________________________ 1-2 years 3-5 years

Question 23: In the following matrix, enter the number of local country attorneys you have in your Hong Kong, Taiwan and mainland China offices. (Leave blank if notapplicable.) Local attorney classification

Office/ Region

Equity partner

Lateral equity partner _______ _______ _______ _______

Nonequity partner _______ _______ _______ _______

Lateral Associate Lateral non-equity associate partner _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______

Hong Kong _______ Beijing Shanghai _______ _______ _______

Question 21: How long did it take or do you anticipate that it will take for operations in mainland China to break even or make a profit? One to two years Three to five years Six to eight years Nine or more years Never

Taiwan

Question 24: Do you expect that present or anticipated economic conditions will change your firms strategy regarding development of foreign operations? Yes No Maybe

Question 22: As a percentage of your mainland China revenues and profits/ losses, what are your revenues and profits/losses in Beijing and Shanghai (if you dont have an office in Beijing or Shanghai, please put N/A in the appropriate box)? Office Beijing Shanghai Other (specify): _____________________________ Revenue _______% _______% _______% Profits/Losses _______% _______% _______%

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2008 International Law Firm Strategic Survey Questionnaire

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2008 PricewaterhouseCoopers LLP. All rights reserved. PricewaterhouseCoopers refers to PricewaterhouseCoopers LLP or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate and independent legal entity. *connectedthinking is a trademark of PricewaterhouseCoopers LLP (US).

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