Legal Market Overview in New Zealand
The economy of New Zealand relies heavily on the primary industries of agriculture, dairy and forestry. Tourism is another key pillar of its economy, though it has suffered during the Covid-19 pandemic. The country’s handling of the pandemic has been largely praised around the world, with incumbent prime minister Jacinda Ardern winning a second term in late 2020, in part because of her successful policies to limit the spread of the virus. The election saw the largest margin of victory for her Labour Party in more than 50 years. The country is also affected by the on-going tensions between the US and China over trade, as New Zealand is heavily dependent on the inflow of capital from China and other Asian countries, though its economic recovery has been relatively quick to start after the initial shock of Covid-19. Pre-Covid, the level of foreign investment remained strong. Since then, the government stimulus package has proven effective in shoring up key industries, so there have been few corporate insolvencies, so far. The current stance of the Overseas Investment Office (OIO), which has been scrutinising inbound investments more carefully in recent years, has further strengthened to ensure that global economic conditions do not lead to the plundering of assets vital to the economy. In some sectors, notably among law firms and banks, culture and conduct is still a pressing issue, following a royal commission in Australia into the behaviour of professionals. This, along with the increased focused on capital adequacy among the major banks, is still bringing more alternative lenders into the market. Domestic and overseas private equity funds, for instance, are increasingly visible. In the legal market, Covid-19 has had a significant impact on the level of corporate transactions, though insolvency and restructuring teams are preparing for a possible wave of corporate failures in 2021 and beyond. Other practice, notably employment and litigation, have been very busy with issues deriving directly from the pandemic. New Zealand has a strong base of full-service law firms, including the traditional ‘Big 3’ of Bell Gully, Chapman Tripp and Russell McVeagh. These are are now matched by Buddle Findlay, MinterEllisonRuddWatts and Simpson Grierson in terms of size. DLA Piper New Zealand became the first global law firm with a presence in New Zealand in 2015, but 2020 saw the formal entry of Dentons into the market, following its agreement with a local firm to form Dentons Kensington Swan. At the other end of the scale, boutique firms play a central role in some practice areas. In corporate and commercial (Harmos Horton Lusk Limited and Flacks & Wong), dispute resolution (LeeSalmonLong and Gilbert Walker), insurance (Fee Langstone and Robertsons), employment (SBM Legal, Dundas Street and Kiely Thompson Caisley) and IP (AJ Park). Corporate law firm Lowndes ceased trading in 2020, with some partners moving to Tompkins Wake.