Challenges facing Indian law firms as a result of the internationalization of the legal market may be countered by fostering an internal culture of trust, says communication expert Manoj R Dani
Still technically closed to outsiders, India’s legal industry is sky-rocketing and undergoing a liberalization that has compelled “magic circle” global firms and medium-sized practices around the world to look for ways of participating.
With the increase in private equity deals (see Staying liquid on page 15), IPOs and direct investments, growth among law firms in India has been driven by the referral relationships between well-established local firms and their global counterparts.
This growth has created an imminent challenge, a problem first experienced by global investment banks and financial institutions: The challenge of finding, training and developing talented people.
Two questions arise. The first is, how can Indian law firms retain professionals in the face of growing competition? The second is how can associates and partners be motivated to contribute to business growth?
As advisers to both global financial institutions and international law firms, we are often consulted to help address these issues for clients in Hong Kong, Singapore, China, Japan, North America, Europe and Australia. The answers have some measure of value for Indian firms as well.
The primary ingredient for success in both situations is transparent and genuine communication. There is a world of difference between firms that communicate well internally, and those which don’t. Small problems easily resolved through open dialogue snowball into larger issues that create internal obstacles and divisions when communication is absent. Effective communication engenders trust, strengthens relationships and allows a firm to focus on its strengths. Poor communication blocks strategies, stalls plans and stops internal cooperation.
Legal professionals typically invest long hours in their work. In some firms, 14 to 16-hour days are common. Those dedicating such a substantial amount of time to work will understandably expect a working environment they can also call home. High stress levels and the need to perform means firms must accept that competitive financial compensation is just one basic tool to motivate their practitioners.
Professionals desire a sense of identity within a firm. Boosting a legal team’s morale by offering a sense of belonging along with appreciation for good performance, seems like a common sense approach to motivating staff. Sadly, common sense is not always common practice.
The crux of this failure often manifests itself in the absence of open communication. Transactions are completed in a professional manner but at the expense of a team with reduced morale.
In one recent example, a successful senior associate at a reputable global legal practice left for a third-tier firm simply because he was unaware of the direction in which the firm was heading, its practice focus, business strengths or what other fee-earners were doing to build the business. False promises by partners to be more transparent about business pipelines, work flows, assignments and client relations took a negative turn, resulting in his resignation. This was not an isolated case; a few of his colleagues joined him in the exodus.
This begs the question of whether firms can truly put their clients first when they often fail to put their own people first. Can businesses grow without the good practices of creating solid internal foundations and a positive work ethos?
If senior fee earners were to reduce their focus on extra bonuses or salaries, they would be able to spend more time improving the subtle aspects of their practice through proper guidance, mentoring, inclusion, basic recognition, appreciation, camaraderie and transparency; issues far more important than an annual 15% salary increase.
A simple solution to retaining and motivating legal professionals is by including them in the decision-making process. A small or medium-sized firm, for example, could invite senior associates to assist in interviewing prospective candidates. Given the need to work closely with colleagues, it is important that new recruits are liked by those with whom they will work intimately.
If no culture of systematic mentoring exists, partners and associates should spend quality time away from the office. Relaxed, informal and genuine conversations engender trust and rapport. Global law firms continuously invest large sums of money on corporate retreats, off-site events, communications training and mentoring, while small firms meet with clients over informal lunches or dinners.
Nothing beats the face-to-face element.
Lawyers do business and offer services to people, not institutional behemoths. People are the true assets of any firm. Investing time and energy in them is the only way forward.
Manoj Ram Dani, CPA, CAIA, is director of Odyssey Consultants Limited, a corporate consulting and advisory company that has trained and advised top executives at global law firms, financial institutions, investment banks, and Fortune 500 corporations.
