Overseas expansion: a step into the unknown

Zoe Bailey at Withers & Rogers offers advice on how to make a success of strategic expansion in the current climate

At a time when opportunities for organic growth are limited due to economic headwinds and unpredictability as a result of market disruption, some SMEs may be thinking of achieving growth by extending into new overseas markets.

Whilst this type of expansion brings risks, those with a well-considered and well-researched strategic plan can realise significant rewards.

When it comes to specialist intellectual property (IP) services, it has long been the case that innovation-led businesses in Asia and the US see the UK as an ‘entry point’ to the European marketplace. Whilst Brexit has brought some changes, many international corporates still prefer to work with UK-based advisers when it comes to fine-tuning their European IP strategies and securing commercial protection spanning the UK and EU markets.

With significant market changes underway, IP firm, Withers & Rogers, wanted to expand its footprint into Europe to deliver the complex, multi-jurisdictional work that global companies are increasingly seeking. Munich was the location of choice for the firm’s first overseas office. As well as benefiting from proximity to the European Patent Office’s (EPO’s) patent examiners, the firm’s attorneys were able to enrich their skills by gaining first-hand experience of working alongside local attorneys and understanding the nuances of the European IP system.

With more clients seeking a multi-jurisdictional approach, the decision to expand into Europe could seem a no-brainer, but it didn’t feel like that at the time. The decision to open an overseas office was a step into the unknown, which would inevitably bring time and opportunity costs. Once the firm committed to the move, it would have to be prepared to see it through or recognise when to make a bold decision to cease the strategy.

In today’s climate of raised interest rates and higher borrowing costs, decisions to expand globally could seem more risky. Clear objectives and a well-considered strategic plan are vital to secure senior-level buy-in.

Expect the unexpected

Leadership teams and Boards should expect the unexpected when planning any overseas expansion, but in times of geopolitical and economic uncertainty, an even more flexible approach is required.

Extending a company’s operational footprint brings associated risks. Having decided to open a second European office in Paris, the leadership team at Withers & Rogers wanted to protect the firm’s culture which is rooted in entrepreneurial behaviours, building trusting relationships and commercial understanding. One of the firm’s UK-based attorneys was appointed to head up the new Paris office; someone who knew the firm’s culture, purpose, vision and values intimately.

However, as he had only ever practiced in the UK previously, he would have to get qualified in France to work there permanently. What the leadership team didn’t realise at the time was that this had never been done before by a British national, so it was by no means a given. Staying flexible, providing continued support and creating the time for study helped the project to stay on track.

Stay focused and communicate

Warren Buffett once said: “Someone’s sitting in the shade today because someone planted a tree a long time ago”. This is an important message for any change project and it’s important not to be put off by early setbacks. The project team should stay focused on the long term and keep reminding itself why this change is needed.

Effective and regular communication at all levels of the organisation will ensure that everyone sees where progress is being made and can celebrate incremental achievements. If communication is paused for too long, cynicism and lack of trust could take hold, undermining the project’s progress.

Understand the local market

Local knowledge is vital to the success of any overseas expansion strategy. As well as doing market research to gain an understanding of demand levels, businesses need specialist expertise to guide them in areas such as employment law, local taxes and regulatory compliance. If there are significant cultural or demand differences in a specific territory, it may be sensible to trial services before investing, to gather feedback.

Stick with it

Just because a new office has opened and services are being delivered, it doesn’t mean the project is over. The first few months are a major learning curve and it’s important to make sure that as much as possible is captured and used to inform processes and service offerings. In Paris, early client feedback revealed that the firm’s cultural attributes were welcomed by businesses operating in fast-moving, tech-led areas such as AI and computing and life sciences. Ongoing training has been provided to embed the firm’s culture, purpose, vision and values; making it an integral part of customer experience.

Knowledge sharing

Expanding the business into new territories creates opportunities for knowledge sharing. For example, the trade mark team at Withers & Rogers’ Munich office provides regular training sessions and EU case law updates to the wider organisation. Similarly, the cross-border nature of some clients’ requirements means people in Germany get an opportunity to work alongside their British colleagues. This has given them a first-hand understanding of how persuasive commercial viewpoints can be when dealing with trade mark oppositions at a jurisdictional level.

Empowering local teams

It can be difficult for project teams to know when to let go. There is usually a tipping point when the local office is hitting its milestones and making good progress. This is the time to allow local leaders to start making their own decisions and react to the needs of the local market.

Letting go doesn’t mean leaving them without support, however. Ideally, the local team should have access to a member of the leadership team who they can call upon for advice or guidance when needed. Support in areas such as stakeholder communication can be especially helpful for those who have stepped up to lead the new office.

Zoe Bailey is Head of Strategic Operations at European intellectual property firm, Withers & Rogers.

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