Hitesh Mehra offers critical tips for lawyers on striking successful partnerships with in-house counsel
Indian law firms have taken long strides to enhance their corporate practices. Despite being smaller than their counterparts in the West, Indian firms have demonstrated versatility across practice areas and developed specializations through boutique service offerings. Law firms have also shown vast improvements in their ability to handle large onshore transactions and coordinate skilfully with correspondent offshore law firms.
Corporate counsel at multinational enterprises (MNEs) consider several factors when deciding which law firm to engage. Law firms with a client-centric approach are more likely to be successful candidates. When targeting MNEs, lawyers should be both reactive – responding to, and fulfilling a client’s request for assistance – and proactive – showcasing their firm’s offerings to create the framework for a high-impact relationship. This is unachievable unless lawyers understand a client’s strategies, buying needs and habits in a bid to draw up a long-term revenue plan (usually three years).
Excellent legal service hinges on a two-pronged strategy – investing in industry expertise to better grasp client concerns and developing solid relationships within a client’s organization. Managing partners should be instrumental in coordinating revenue generation and cultivating legal finesse within their practices.
Corporate counsel need to be alive to the risks of having a proliferation of vendor accounts and the lack of focus and quality that multiple vendors bring. The idea is to work with a selected few in the country and region who understand the client account and issues well, and are in a position to deliver the most effective services for reactive and proactive briefs.
In-house counsel are also wary of working with firms which lack a robust conflict assessment framework. We therefore insist that senior partners conduct a proper internal diligence and certify any potential conflict, whether direct or indirect, before they tackle a brief.
Flexible billing is another selling point. Seasoned corporate counsel usually communicate clear expectations for fee negotiations (such as discounts for high-volume work, preferred rates and a rate freeze period). Law firms which provide transparency on these issues are more likely to be selected.
At the big four accounting firms, preferred provider selection is greatly influenced by the practice’s senior partner references for the provider (usually arising from transaction teaming) about effectiveness and ethical conduct, and the past association of the provider with the practice network at various levels. Firms that pitch on the basis of being “full-function”, instead of highlighting provable industry specializations, inspire little confidence. While Indian corporate law firms offer promising prospects (such as the flow of a large volume of fresh graduates to cherry-pick from) the absence of a claims culture, the tendency of litigation firms to dovetail into corporate legal advisory services and other factors mentioned above, suggest a comparison with international law firms would be premature and unfair.
The institution of in-house counsel is arguably evolving and maturing so fast that it becomes difficult for law firms to anticipate their future strategic needs. In-house counsel are able to adapt faster to the global business environment, primarily because they face no restrictions in terms of company structure, size and cross-border practice, which sometimes handicaps law firms. They are able to deliver seamless support on a departmental and vertical basis to the global MNE, rather than operating in mere geographical silos.
Corporate counsel are, however, challenged by their own set of peculiar problems. One problem is the limited size of a general counsel’s office team, which reduces the chances of nurturing talent on a sustained basis.
Other issues include a perpetual budget constraint and maintaining an effective resource base to serve MNE operations in various countries. In dealing with law firms, corporate counsel often face impediments like erratic quality at the associate level; excessive billing for resources not commensurate to the value added or the law firm’s reputation; associates lacking a holistic view of the matter leading to basic errors; a lack of predictable timelines; and stress on the speed of delivery over effectiveness of advice. Moreover, there is considerable room for improvement in refined general commercial contracting expertise; second review of critical advice; issue-based drafting; and management buy-in memorandums. Lawyers must draft documents using business language that is unequivocal, effective and easily understood by non-lawyer stakeholders.
Corporate counsel are also looking for law firms which deliver opinions with objectivity and reliability by lending advice from an independent perspective instead of simply advocating a given argument. I cannot overemphasize how important it is for law firms to focus on their core values and enforce a robust conflict check process. I’m aware that all these issues continue to receive the close attention of most law firms of repute in India.
On a parting note, I leave India Business Law Journal’s readers with a thought on the opportunity that exists for corporate counsel and law firms to work together on planned projects. By temporarily loan-staffing its brightest associates at competitive rates, a law firm will have a unique chance to interact with their client at various levels. It will produce a “catfish effect” in the in-house team, which would create robust competition and breed talent among the in-house community.
Hitesh Mehra is the general counsel at Ernst & Young Pvt Ltd. The views expressed are personal to the author.