Indian law firms should take the reins and dictate the growth of their legal service offerings overseas, writes Stephen Kines
In all the noise about opening the Indian legal market to foreign competition, little has been said about the reverse direction. What about Indian law firms expanding abroad? We are all aware of the tactics of law firms as they hungrily wait (in vain?) for a liberalized legal market in India. But why do we assume that India itself cannot take the leadership in the global legal services market? Is it India’s destiny to be only a back-office centre servicing the lower end of the market? A reputation for doing excellent volume work has overshadowed India’s potential for taking on high-end work. And there is a whiff of colonialism to such a conclusion as well.
CEO
Kines Global
We all know the statistics of India’s rapid industrial growth and more importantly the global expansion of Indian industry. But where is the corresponding expansion of the industry’s trusted counsel? The global legal services market developed in tandem with businesses in the US and UK as they expanded outside their own markets. Why is the Indian lawyer not sitting beside the client on a Mumbai-New York flight when on a New York-Mumbai flight the American lawyer is having a long bonding session?
The excuses often used to explain the lack of Indian law firm expansion are that existing domestic firms are not big enough or the legal talent is too thin. But these excuses rely on unfair comparisons between well-developed legal services markets such as the US and UK, and emerging ones such as India. Furthermore, with bankruptcies such as that of Dewey & LeBoeuf, the evidence shows that the current method of US/UK global expansion is clearly flawed.
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What is often seen as India’s weakness – the steadfast adherence to the old-school style of the loyal and trustworthy sole practitioner rather than the business shark – may prove to be its strength. The over-commercialization of the legal profession, and the pyramid schemes where the best legal practitioners end up being full-time managers of a huge number of associates, have led clients to lose faith as they get less and less attention from counsel.
Forgotten in all this talk of law as a business is that the primary driver of global expansion of legal services should be the relationship of trust between counsel and client. No one knows the culture of an industry as it expands as well as the local lawyer, who was there at the beginning of growth, speaks the same language, is in the same time zone, and has family and other connections to the client’s community. These are the foundations of trust and as a client moves away from their community into new markets, some fancy brochures with many dots on a global map and impressive offices may not be enough to build such trust. Soft factors such as familiarity and comfort are central to cementing client relationships.
There are Indian law firms, perhaps not large by US and UK standards, but with talented counsel who are well placed to represent Indian industry expansion. The key, to start with, will be to focus on quality and to be discerning in their choice of work to ensure they don’t spread themselves too thinly. That means that Indian counsel should not jump at every opportunity, but be clear about their strengths. This is one of key lessons from the failed expansions of US and UK firms as they put short-term profits before long-term sustainability.
The second lesson is that talent, not need, drives expansion. Law firms would be wise to turn away certain opportunities rather than hiring second-rate talent to service key clients.
The third but arguably most important lesson is that supplying legal services is about preserving relationships. Too often we love the client that is with us for the moment but the true rewards come from the long-term clients that we give constant attention to. Attrition in clients is as costly as attrition of talent. With expansion, this is often given low priority, or forgotten altogether.
Financially, expansion may seem to be a daunting task for Indian law firms, but thankfully they have three advantages. Firstly, unlike their foreign colleagues trying to enter the Indian market, the US and European markets are liberalized so they can enter the market. Secondly, Indians have more practice in being frugal, which bodes well in today’s distressed market. Thirdly, London, in particular, provides a wide variety of options for financing as a result of this year’s liberalization of the ownership structure of law firms. This allows for equity investment and professional owner-managers.
Law firms no longer need to make the devil’s choice between putting their managers on a second tier (limiting their ability to recruit top managers) or pigeon-holing their top performers into management. As a report in the Financial Times states, the bankruptcy of Dewey put to rest false claims that only lawyers can manage law firms.
It is time for Indian law firms to take a bold step and expand alongside their clients. They have the means and ambition to dictate the growth of their legal service offerings globally, and be a part of a new world order – one that they can lead.
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Stephen Kines is the CEO of Kines Global, a law firm development company exclusively focused on the global expansion of Indian and Chinese law firms. Kines has spent 16 years as a global equity partner at international law firms Linklaters and Bird & Bird, and has established a regional boutique law firm. He is ranked as one of the top 10 telecom, media and technology lawyers in the world by Euromoney and has served in a variety of management roles at law firms. He sits on the International Bar Association’s Law Firm Management Committee Advisory Board.
