MAY 2017
The IE Business School Goes over the ONTIER Case

The IE Business School Goes over the ONTIER Case

Rosario Silva, IE Business School professor: “ONTIER found the perfect internationalisation model in the corporate world: equity participation became the best fit for their culture, values and financial capacity”.

The IE Business School just finished drafting a new study case based on ONTIER. It's a newly released and original work by Rosario Silva and Carlos de la Pedraja, both professors at the IE Business School. From the next academic year on (2017-2018), students of the IE MA programs will be able to study the ONTIER case. 

The ONTIER case: internationalisation through equity participation

According to Rosario Silva, Spanish law firms have followed low-risk strategies to go international. Some opened their own offices in the country, mainly representation offices, which however can't be expected a quick growth since they don't work with local law. The most popular entry mode is setting alliances with local law firms. Spanish law firms used official agreements with fellow local law firms or joined alliances set beforehand. 'Despite through these models you can provide local advice, none of these models makes it possible to guarantee the same quality in every country. They spotted the need for providing legal advice including local know-how with the same quality in every country, with unified procedures and standards' states Rosario Silva.

A lot of British and American law firms went for a totally different model, based on opening their own offices in the countries they settled so that they could provide the advice of local lawyers. This may look like the best option, however it's expensive and it's hard to manage. 'It requires a really high prior investment: you need to find the right spot to set the office and recruit experienced lawyers. It's a more expensive, risky and complex entry mode, but it indeed guarantees a quality service globally' notes Rosario Silva.

When the ONTIER partners went over every entry mode to find the best fit for them, none of them seemed to work. They were looking for the best of both worlds: an option making it possible to operate globally without necessarily making a strong investment. That's why they chose equity participation. 'Equity participation was already a really popular entry mode at a corporate level, but not in the legal industry' explains Rosario Silva. Being this the main focus of the case, the implementation and application process of this entry mode is also addressed. 'This option indeed requires many changes to be implemented. New local law firms join the company, and therefore these new local partners need to adapt their strategy to fit in with the global brand, to create a standard for all their procedures in order to provide a unified international service' she states.

Is it worth it for law firms to go international?

Despite Rosario Silva believes that internationalisation procedures imply a complex adaptation process to the local market in order to provide a quality legal advice, she also notes that going global truly brings value to law firms since that way they speak their clients' language. 'Clients want their go-to lawyer in Madrid to be able to help them with that problem they have in Mexico. Companies and law firms keep a really close relationship underpinned by trust' she states. Providing a centralised legal service becomes a truly valuable asset for multinational companies seeking a legal services provider: that's why most law firms are increasingly pursuing internationalisation.