Development of Ho Chi Minh City's legal services industry by 2030, with a vision to 2050: Needs active support from management agencies

To implement Resolution No. 24-NQ/TW on 07^th October 2022 and Resolution No. 31-NQ-TW on December 30^th, 2022 of the Ministry of Politics, Ho Chi Minh City has been attempting to become a leading business, financial, commercial service of the south side and the country. As one of the professional service industries, legal services aim to develop strongly, overcome difficulties and challenges, and become a leading economic, financial and trade service of the South and the country. As one of the professional service industries, legal services aim to develop strongly, overcome difficulties and challenges, and become a leading service industry group contributing to the economic development of Ho Chi Minh City. To achieve this goal, it requires not only the efforts of each legal service provider, but also the concern, guidance and recognition of the city government, the state management agency in the city, to make legal services become a typical service of Ho Chi Minh City. Throughout this discourse, we will present the problems faced by many law firms (legal service providers) in Ho Chi Minh City and propose solutions to enhance the value and worth of the legal service industry in the service of the city.

Source: Ho Chi Minh City Real Estate Investment Consulting Research Center

Role, contribution and potential of the legal service industry

According to the latest report on the implementation of the Law on Lawyers dated  December 26^th, 2023 of the Ministry of Justice[1], currently, there are currently 17,284 practicing lawyers and 5,429 law-practicing organizations in the country (as of December 31, 2022). These individuals and organizations participated in providing legal services in 1,429,540 cases (including 298,082 litigation cases, 892,130 legal advice and other legal services, 239,328 legal assistance cases) from 2007 to 2022. In addition, this group of lawyers also contributes nearly 3,000 billion VND in taxes to the State budget and creates jobs for thousands of employees. As Ho Chi Minh City separately, this is the region with the largest number of practicing lawyers in the country, with 7,000 lawyers, nearly 2,000 law practice organizations, 65 foreign law organizations, and a turnover of 2,000 billion in 2023[2]. It can be seen that Ho Chi Minh City currently accounts for a large proportion of the country in terms of the number of lawyers, the number of law practice organizations, and revenue.

The above figure shows that the legal service industry at this time has made a significant contribution to the socio-economic development of the city and the country. Not only the above figures, the activities of law firms, law offices, legal service providers in general ("law firm") and lawyers also facilitate enterprises to focus on business activities, reducing the legal barriers of domestic and foreign enterprises. In terms of social life, lawyers and legal organizations are also involved in propaganda and law dissemination to raise people's awareness and perception of respecting and abiding by the law. In terms of legalization, the contributions and professional opinions of experienced lawyers are important in building the country's legal system to ensure fairness, suitability and closeness to the realities of the socio-economic situation.

Regarding the development potential of the legal services industry, with the development of the economy and culture, the demand for legal services by domestic and foreign enterprises and people is increasing. The adoption and implementation of National Assembly Resolution No. 98/2023/QH15[3] helps Ho Chi Minh City to apply specific policies and mechanisms to create many preferential and attractive policies, attracting more investment and business activities to the city. This also directly contributes to increasing the demand for legal services in the area. Accordingly, organizations and individuals, when participating in market economic activities and social relations, will now prioritize seeking lawyers or legal service providers for advice and support to avoid possible risks, grasp preferential policies and optimize the incoming value. Not only at the national level, the law firms in the city are gradually expanding to other countries in the region and the world. Therefore, in the coming period, with the ever-increasing scale of the economy (business activities, domestic and foreign investment) and the advancement of people's thinking, the development potential of the legal service industry in Ho Chi Minh City is predicted to increase day by day.

Difficulties and problems faced by law firms

In the context of economic development and deepening international integration, law firms in Ho Chi Minh City are facing many challenges and difficulties. In order to fully understand the obstacles faced by law firms, we need to consider the limitations that law firms face, such as the lack of support from government agencies or the fragmented and small operations of most law firms today, the lack of attention to the legal field of domestic clients, the fierce competition with foreign law firms, and the slow application of digital technology. By analyzing these difficulties, we can propose solutions to improve competitiveness and promote the sustainable development of the legal industry in Vietnam.

Firstly, not receiving sufficient attention, support from state agencies, local management agencies

One of the existing challenges for law firms in Vietnam is that they have not received much attention and support from State agencies in general and local authorities such as in Ho Chi Minh City in particular. Currently, there are no policies or programs to encourage the development of law firms in the city or nationwide, although Ho Chi Minh City is considered the economic locomotive of the country, many domestic and foreign enterprises are concentrated in this large city and therefore, the demand for legal services is higher than in other localities. This shortage not only reduces the motivation for development but also makes it difficult for law firms to access necessary resources such as capital, information and market opportunities. The lack of supportive policies means that law firms are left to fend for themselves to survive and develop in today's competitive environment. According to statistics from the Ho Chi Minh City Department of Justice as of 15^th July 2024, the city has gathered more than 2,800 law firms and lawyers practicing as individuals[4], The large number of law firms shows the increasing competitive pressure in the legal services industry, especially for small and newly established law firms, which often face many challenges in the process of raising capital and building a network of clients using legal services. For example, many newly established law firms in Vietnam often face a lack of initial investment capital. In the absence of funding programs or tax incentives, these firms often have to borrow from private sources at high interest rates, resulting in severe financial pressure and difficulties in maintaining operations and expanding scale. The lack of attention and support from government agencies and local authorities is one of the biggest challenges for law firms in Vietnam. Without a change in the city government's policy of supporting law firms, especially small and newly established ones, the challenges of operating and developing legal services in Ho Chi Minh City will continue.

Secondly, most law firms in Vietnam operate separately on a small scale and lack connections.

The fact that law firms operate separately and on a small scale is one of the main factors that reduce the efficiency of the legal services industry. The lack of connectivity and cooperation among law firms leads to scattering of resources and reduces competitiveness. In the context of globalization, cooperation and association among firms in the same industry is a key factor in creating synergies and enhancing competitiveness. Every year, the number of newly established law firms in Ho Chi Minh City increases rapidly, but most of the small and medium-sized law firms account for a higher proportion than the large law firms in this city. Although there are some social organizations linking law firms, the coverage of these firms is not high, and the goals of establishing such organizations have not been fully realized. For example, the Vietnam Business Lawyers Club (VBLC) was established to gather and connect law firms, promote exchange, cooperation, and knowledge sharing on international law, develop human resources for lawyers, and improve the Vietnamese legal profession. However, the number of members of the VBLC is still limited compared to the more than 2,800 law firms and individual lawyers practicing in Ho Chi Minh City alone.

Meanwhile, large and prestigious law firms often have an advantage in terms of resources and access to clients. International law firms with global coverage, such as Baker McKenzie, Allen & Overy or Dentons, can use their global network with member firms present in many countries and different experience and legal knowledge in the country where the firm is headquartered and in the host country to gradually gain a market advantage over local law firms. In addition to the law firms from the Big 4 of consulting, auditing (KPMG, PWC, EY, Deloitte) or consulting firms that provide legal services similar to regular law firms have an advantage in terms of multi-dimensional consulting, integrating many services at the same time for clients. At present, Ho Chi Minh City has a large number of consulting firms with such a combined model, which not many local law firms have been able to do. This shows that most law firms in Vietnam operate independently and do not cooperate closely with each other. Independence is an advantage, but it also becomes a disadvantage when this factor reduces the ability to provide high quality legal services and compete in the domestic market as well as in the international market.

Thirdly, at present, legal services do not receive attention and high appreciation from the community, society.

At present, legal services have not received attention and appreciation from the community and society in Ho Chi Minh City. Although law firms here play an important role in protecting rights and promoting socio-economic development, the reality shows that they have not received the attention and care they deserve from relevant authorities, domestic business community and citizens. Most clients are not fully aware of the importance of legal services, resulting in a lack of attention and support from local businesses.

In Ho Chi Minh City, many businesses, especially small and medium-sized enterprises, often do not consider legal services as an essential part of the business process. This attitude prevents law firms from reaching and expanding their client base. In addition, the lack of understanding and interest on the part of society also reduces the motivation of law firms to invest in improving the quality of service and developing new services. In many cases, companies only consult law firms when they encounter serious legal problems, rather than preparing and consulting in advance to avoid risks. As a result, law firms are unable to play their full role in effectively preventing and resolving legal problems.

Fourthly, domestic law firms have difficulty in competing with foreign law firms

International integration brings many opportunities but also poses many challenges for domestic law firms, especially in competing with foreign firms. This is evident in Ho Chi Minh City, which has a large presence of foreign law firms in Vietnam, both in terms of quantity and quality. International law firms often have strengths in experience and financial resources of the law firm itself in the country where it is headquartered, creating a significant difference in service delivery compared to domestic law firms. Some multinational law firms such as Baker McKenzie, Allen & Overy, or Tilleke & Gibbins Law Firm (Vietnam) have established offices in Vietnam and captured a large market share due to their reputation and global network. These firms have up to several hundred employees. They are able to provide high quality legal services that meet international standards and meet the needs of multinational clients. Meanwhile, Vietnamese law firms often find it difficult to compete and retain clients due to their small size and lack of resources.

Fifthly, the application of science, digital technology is slow, not highly effective

Finally, the application of science and digital technology in law firms is slow and not highly effective. The digital transformation of legal services not only improves work performance, but also creates more opportunities to provide services and expand the market. However, many law firms have not invested their resources in information technology, leading them to lag behind advanced law firms, work processes are still heavily paper-based and manual, reducing efficiency and increasing costs. Moreover, the lack of investment in technology also reduces the competitiveness of law firms in the international market, where digital technology has become an important factor in providing high-quality legal services.

In short, in order to overcome the current difficulties and obstacles, law firms need to receive essential support from the states, raise the community's awareness of the role of legal services, strengthen cooperation and linkages among law firms, while promoting the application of digital technology in their operations. This will not only help to improve competitiveness, but will also contribute to the sustainable development of the legal industry.

Recommended solutions to develop, enhance the value of the legal industry

To develop and enhance the value of legal services in Ho Chi Minh City, it is extremely necessary to propose practical and effective solutions. These solutions will not only help law firms overcome current difficulties, but also create a premise for the sustainable development of the legal services industry in general. First, the state must consider issuing more specific support policies that create conditions for law firms to have easier access to necessary resources. Second, the establishment of professional associations and organizations that link small and medium-sized law firms will create a combined strength that will enhance competitiveness. In addition, improving the quality of services and human resources, along with the application of modern science and technology, will help law firms improve operational efficiency and efficiently meet the needs of clients. These solutions not only help increase the competitiveness of law firms, but also contribute to the overall development of the legal industry in Vietnam.

Issuing more policies to support law firms, promoting and raising people's awareness of the importance of legal services

One of the important factors in promoting the development of the legal industry is government support. Issuing more specific support policies will create a favorable environment for law firms to operate and develop more strongly. These policies can include tax reduction, preferential loans, financial and technical support, along with the organization of specialized training programs for law firms. Such support should be diversified in terms of policies, not only providing financial support, but also helping law firms to access high-quality consulting and training services. In Vietnam, applying similar policies can help law firms overcome financial difficulties and improve their competitiveness.

Promoting and raising public awareness of the importance of legal services is also a key factor. Through communication campaigns, seminars and community events, the government can help people understand the role of legal services in protecting personal and business rights while promoting socio-economic development. Increased promotion can increase the utilization rate of legal services, showing that raising public awareness can have a positive impact on the development of the legal industry.

The establishment of professional associations and organizations of small and medium-sized law firms should be considered

The establishment of an association or organization of small and medium-sized law firms is a practical solution to enhance the collective strength and competitiveness of law firms. This professional association will provide a platform for law firms to share knowledge, experience and resources, and to promote cooperation in the delivery of legal services. For example, the American Bar Association (ABA) has been successful in creating a strong support network for lawyers and small law firms, helping them to access training opportunities, professional development and expand their client base. In Vietnam, a similar legal industry association could organize specialized training, seminars, and other support programs to build the capacity of law firms.

The association can also act as a bridge between law firms and government agencies, guiding them to access support policies and resolve legal issues effectively. In addition, the association can also organize international events and seminars to help Vietnamese law firms learn from the experience of developed countries, grasp the latest trends in the same field, and expand the international cooperation network. This will not only help improve competitiveness, but also create favorable conditions for Vietnamese law firms to enter the international market.

Law firms need to improve service quality and staff qualifications

To compete effectively in the marketplace, law firms need to focus on improving service quality and developing human resources. Investing in staff training and skill development is a key factor. Law firms should focus on organizing in-depth training courses, updating the latest legal knowledge and developing necessary soft skills such as communication, negotiation and project management skills. A typical case is the law firm LNT & Partners, which has invested heavily in staff training and regularly organizes courses and seminars to update the knowledge and skills of its group of lawyers. As a result, LNT & Partners has built a solid reputation in the marketplace and received many positive reviews from clients over the years. Training not only improves the quality of service, but also helps law firms to retain and develop quality staff, thereby improving their competitiveness.

In addition, law firms should focus on improving the quality of services by improving workflow, ensuring transparency and accuracy of all activities. Applying international quality management standards, such as ISO 9001, also helps law firms improve operational efficiency and build trust with clients. High-quality legal services not only help protect clients' interests, but also enable law firms to expand their markets and enhance their reputations.

Applying science and technology to improve service quality in the digital age

The application of science and technology to law firm operations is an important solution for improving work efficiency and service quality. The use of case management software, legal information search tools, and online platforms to advise clients not only saves time and money, but also improves the client experience.

A typical example is the application of artificial intelligence to the analysis and management of legal documents. Software such as ROSS Intelligence or major platforms such as Microsoft with integrated AI tools are used by many large law firms around the world to improve work efficiency. ROSS Intelligence can search and analyze large amounts of legal documents in a short time, helping lawyers save time and increase the accuracy of their work. In Vietnam, law firms can apply AI technology solutions to automate management processes, minimize errors, and increase accuracy.

In addition, the use of online advisory platforms can help law firms reach more clients, especially in remote areas. This not only expands the market, but also meets the increasing demand from clients for convenience and speed in accessing legal services. For example, West Law or Lexis Nexis have developed an online legal search platform that allows clients to search for legal solutions while providing documents to lawyers easily and quickly.

The use of technology also helps law firms improve management efficiency and streamline workflows. Technologies such as blockchain can be used to manage contracts and legal transactions transparently and securely, minimizing risk and enhancing security. At the same time, the use of big data analytics technologies can help law firms clearly understand clients' needs and trends, thereby improving and developing more appropriate new services.

In order to develop and enhance the value of the legal sector in Ho Chi Minh City, strong support from the State is a great motivation for the development of law firms today, in addition to the close connection between enterprises, as well as the improvement of service quality and the application of technology. These solutions not only increase the competitiveness of law firms, but also contribute to the sustainable development of the legal sector and the socio-economy of Vietnam. By implementing the above recommended solutions, the city's legal sector can grow significantly and adequately meet the needs of the domestic and international markets.

The future goal of the legal service

Despite the current difficulties and challenges, the author believes that if the solutions and proposals are implemented and receive more recognition and attention from the state and the community, the legal services sector of the city can move forward to greater goals in the coming time. Accordingly, law firms will increase the quantity and quality of lawyers and legal experts to meet the growing demand of the market. Not only that, the formation of affiliated organizations and associations of law firms also creates a new position for the legal services sector in society. This also creates opportunities for small and medium-sized law firms in the city to develop, increase their value, contribute more to the judicial system and local economic activities.

In addition, the provision of legal services can be more convenient and professional. With the development of science and technology and the application of digital technology, the reform of state administrative procedures, legal activities can be carried out more promptly and effectively, and geographical barriers can be reduced. This will help organizations and units providing legal services in Ho Chi Minh City to have more opportunities to serve clients not only in the city, but also in neighboring provinces and other regions in the country. As a result, Ho Chi Minh City will become a leading service center providing legal services nationwide. Moreover, with the great potential of this field, law firms in the city expect to be able to reach out to the world. More branches and offices of Vietnamese law firms will be set up in countries in Southeast Asia and around the world to provide legal services to clients from other countries, thus generating more revenue for the country.

With the desire to contribute to the development of the legal service industry in Ho Chi Minh City in particular and the whole country in general, we hope that through this discourse we can present our views and perspectives on the current situation and difficulties faced by legal service providers, and propose some solutions to enhance the value of the legal service sector in Ho Chi Minh City as well as the whole country. From there, legal service activities will bring more benefits to citizens and contribute to the development of the national economy and Ho Chi Minh City as well. We believe that the development of the city to a new level of civilization and modernity requires professional service sectors such as legal services to continuously develop and effectively support the economic activities of enterprises in the city, provinces and nearby cities.