It has taken maybe longer than expected but global behemoth Dentons has finally planted a flag in the Vietnam market by forming an association with local firm LuatViet. The Vietnamese firm is not top heavy, with only three partners but over 30 legal professionals in total, but crucially it does have offices in both the administrative capital of Hanoi and the financial centre of Ho Chi Minh City. These two markets are quite distinct so having a foothold in both offers Dentons maximum market coverage; it is generally acknowledged that one market cannot be accessed from the other as they are so different (think Washington, D.C. and New York). Lawyers rarely relocate between the two because of business, cultural and family ties to one or the other.
Vietnam has regularly been identified as the next “white hot” Asian market for at least two decades but, despite a regulatory framework seemingly open and welcoming to international firms, the take-up has never really happened. Less than a dozen non-Vietnamese firms have significant presences there, even including those from Japan and Singapore, and other pan-Asian operations such as ZICOLaw and DFDL. Even among those, many do not have resident partners in one or both offices. It will be interesting to see whether Dentons sees the need to relocate partners from elsewhere in the network. Unsurprisingly, most inbound investment in Vietnam is geared towards its key industries of infrastructure, construction, manufacturing, textiles and energy (increasingly clean energy projects) so one would expect any incoming senior lawyers, either from within the firm or hired from the local market, to have expertise in those areas. But even with ongoing rapid growth in those sectors, most international firms have only been prepared to engage from afar, usually Singapore or Hong Kong.
Why the reticence? Hong Kong and Singapore (and Beijing, Shanghai and Tokyo) remain the key financial centres of Asia and lawyers at international firms looking to build a career tend to focus on them rather than become entrenched in a second-tier market (where salaries are lower, taxes are higher and international schooling is expensive, albeit the standard of living is otherwise extremely affordable). The local market has some extremely well-regarded firms and lawyers with international firm experience but the talent pool is not (yet) as deep as elsewhere in the region so perhaps that is factor. Until the last 18 months, travel in and out was convenient and efficient so having a permanent base probably wasn’t seen as a necessity.
That said, both A&O and Duane Morris have made partner hires in Vietnam in recent months so, with Dentons’ arrival, maybe the enthusiasm is becoming stronger.