Survey: 9 out of 10 GCs want foreign law firms to enter, and most think foreign lawyers are better than domestic ones

Friday, 12 May 2017 By Prachi Shrivastava In-house counsel

Clients would like Indian law firms to pull up socks to compete with foreign firms: Survey (source IDEX Legal)

General Counsel (GC) from 87 Indian companies would mostly like foreign law firms (FLFs) to come into India, but fewer than half of them would prefer giving their business to the FLFs, even though a majority of them find that the FLFs are generally more competent than Indian law firms.

IDEX Legal and Thomson Reuters surveyed 87 GCs across India, from at least 13 industries and sectors, for their General Counsel Benchmarking Survey 2017.

Out of those, 89% of said they would like regulations permitting the entry of FLFs relaxed, and 87% felt that the presence of FLFs would be good for the Indian market.

Yet, only 40% said that they would use an FLF in preference to an Indian law firm, though that response is open to wide and varying interpretations and market conditions.

Competition

77% of the GCs interviewed thought foreign lawyers “produce a higher standard of document”, and 73% thought foreign lawyers benefit from “more structured team working”.

The survey report stated: “The big message that Indian law firms are continually ignoring: the threat is not from foreign law firms. The real threat is that clients are not happy with the services and pricing they’re receiving from Indian law firms.

“Indian law firms which continue to rest on their laurels assuming that the services that they are providing are entirely satisfactory, have their head in the sand.”

Around 55% of the GC thought that foreign lawyers are “technically better trained”, while 71% thought that foreign lawyers are able to “field specialists lawyers more easily”.

The report adds that there has recently been a paradigm shift in the manner of providing legal services to clients and even before FLFs can come in, GCs have caused competition in the Indian legal market to increase by making their in-house teams self-sufficient, even as “hot and hungry” young new players in the Indian law firm space disrupt the market.

Evidently, 68% of the respondent GCs said that they would like to see “other law firms” challenge the status quo over the next few years, and 77% said they see a real possibility of this happening.

Comments

Law Firm Drama 12 May 2017, 08:28

+15 -4

These 9 GCs who think that foreign lawyers are better than the domestic ones will be replaced by them.

GCd 12 May 2017, 08:57

+20 -4

do these 9 GC's know what these foreign law firms charge?!

They charge an astronomical amount per hour, much more than Khaitan & Amarchand!

hi 12 May 2017, 14:38

+9 -2

they charge more and deliver more. these family run Indians firms don't promote merit and if you stick around for long, you can become a partner. its not that easy to become a partner or even an SA in a foreign firm, and here PQE 3 lawyers are being made SAs - so they charge more but there is a reason behind that.

Please Stop 12 May 2017, 09:13

+18 -15

Lol.. GCs commenting on the service / knowledge of lawyers practicing in big law firms.. sarcasm!

Please think 15 May 2017, 05:56

+10 -2

Is it very difficult for you to understand that these GCs may have practiced in law firms for years before deciding to work closer to business. Perhaps, big law firm arrogance gets people blinded.

In House Guy 29 May 2017, 10:04

+0 -1

It is the generally accepted notion that a legal professional not practicing in any law firm and choosing to ply his trade in-house is not upto the professional standards of their law firm counterparts. What is grossly overlooked is the lack of professionalism in the law firm. Ordering expensive meals billed to the clients, going to mini holidays on pretext of Due-D, sending interns posing as associates to do the diligence to pad the bills, the list of unprofessional and unethical norms is unending.

It is too early to say with absolute certainty that entry of foreign law firms would right this scenario. But there is no doubt that the present scenario needs changing.

Fake 12 May 2017, 10:05

+3 -0

It's frustrating how liberalisation is not happening despite the present government having a brute majority in parliament. Modi sarkar is just empty talk. No major reforms are happening.

dontcare 12 May 2017, 10:08

+16 -13

They are GCs because they didnt know much to begin with

SKR 12 May 2017, 15:53

+5 -3

Except to hire you or your competitor?

Please Stop 14 May 2017, 16:59

+7 -1

Jokes apart, the serious issue here is the fees. Whenever any Indian GC gets involved at the proposal level - he will put in all efforts to ensure that the law firm is engaged for fixed fees (usually nuts!) and then they will try to suck blood out of that law firm till the assignment is over. This is totally against the usual practice overseas where most of the mandates are on time spent basis. While I understand that the GCs would like to save money out of their budgets, they should also understand the fact that all mandates can't be on fixed fees basis.. While law firms accept such mandates to be in competition (most of the time such assignments are loss making for law firms), they would have done their internal calculation on number of hours to be spent (needless to say that the service is always linked to the fees being paid. GCs please consider this and it is not fair to beat down the fellow practitioners in fees beyond a point. :)

Please think 15 May 2017, 05:54

+0 -0

It is a competitive market and so law firms must start innovating. Lot of times, different teams in a law firm are doing what is called "Re-inventing"

Please think twice 15 May 2017, 06:12

Most law firms whether in India or abroad are happy to work on fixed fee basis. You need to get your facts sorted. In fact, to talk about rates - the foreign law firms understand the sensitivity of each jurisdiction and are adaptable. There is no stark difference from rates charged by Indian law firms. You must read more about the rack rates of Indian law firms..

blah blah 23 May 2017, 17:01

Foreign law firms are also dealing with pricing pressures in their home markets (less so in the US though)- nothing unusual there. This is a global trend in the industry since the global financial crisis. There can not be any excuse for poor quality of work and client service. It would be more helpful if Indian law firms invest in the most critical resource that they have - their lawyers. Treat them properly. Invest in their training and development. Create a positive and high-performing culture. It is a people business, afterall. Sadly, the message is lost on a number of Indian law firm managers. Blaming the market and the clients is not going to solve anything.

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