The Leaping Tiger

The ascent of the tiger is no myth: over the last several years, and especially in 2009, India has become one of the world’s most powerful new economic markets.

The figures speak for themselves. Even in the teeth of a worldwide recession, India’s GDP was expected to climb between 6% and 8% in fiscal year 2009. India’s stock markets surged by more than 1,800 points in one month, with at least 30 IPOs in the works by the end of September 2009. Foreign direct investment in the country rose by 55% in July 2009 year over year and was forecast to cross the $30 billion mark by financial year end. India led the world in the number of project finance deals in the first half of 2009.

The impact of these developments on the country’s legal marketplace has been profound. The explosion in the domestic sector has created unprecedented scope for deals, transactions and innovation by India’s legal profession. The legal sector in India has finally come of age: it can no longer be dismissed simply as a destination for supporting backend work. Indian law schools are producing upward of 250,000 law school graduates a year, with many of the top graduates being snapped up by London’s “Magic Circle” and other premier international firms. Some of these lawyers are staying overseas; others later return home to practice in Indian firms. It is unsurprising then that India’s corporate law firms are making waves internationally, with many setting up overseas offices for the first time.

Convergence

The year 2010 finds us in the final year of the first decade of the third millennium, in the western calendar at any rate. One thing is abundantly clear: the future is not what it used to be. If there ever was a time when one could rely heavily on forecasts in crafting strategy, then that time is past. Today’s leaders of law firms need to be able to simultaneously juggle three seemingly incompatible goals:

1. To define and execute a strategy in order to sustain and maximize the value that the firm delivers to its owners into the future, based on the capabilities and resources that it has and that it can reasonably achieve or realize; and
2. To ensure that the firm is agile, robust and resilient enough not only to withstand unexpected and unforeseen changes in the market but to capitalize upon them; and
3. To deliver sufficient short-term profitability to be able to meet owner expectations and compete effectively for talent.

Never before has this been more difficult, nor the way forward so uncertain.

Fixed Fees

Large law firms are switching from the billable hour to fixed fees. As a measure of just how much has changed in the legal services marketplace over the past year, it’s hard to top that.

In September 2009, O’Melveny Myers distributed an internal memo (quickly leaked to an online legal tabloid) setting out its intention to provide services on flat and fixed-fee bases. The firm plans to “adopt a single rate card by FY2012, with volume and ‘investment’ discounts and appropriate alternative fee arrangements … becoming the leader in providing high-end legal services on a fixed-fee basis, reducing costs to clients, and achieving superior economic performance through practice management oriented toward cost-effective client service.” If you’d predicted, at the height of the bubble, that O’Melveny management would soon circulate a memo with these contents, most lawyers would have been incredulous.

Also in September 2009, top management lawyers at Reed Smith and Mayer Brown told the legal press that their firms were thinking of going the fixed-fee route for certain types of services. “Most clients want certainty of cost and value for money,” said Reed Smith Global Financial Industry Chair Paul Johnston. “Our prime focus is to provide that.” Rest assured that if their leaders are talking to the media about fixed fees, these firms have gone a lot farther down the road than “thinking about it.” And for every AmLaw 100 firm willing to be publicly quoted about fee certainty, dozens more are quietly examining the subject. At a College of Law Practice Management conference in September, one panelist observed that “there’s not a single big firm that’s not at least thinking about fixed fees.”

Ten Compelling Reasons to Improve Your Speaking Skills

Is speaking simply an obligation for you?

What if speaking could transform your career – and your life?

Your academic and professional success is built on a foundation of excellent analytical and writing skills. Without those skills you could not have achieved your present position. How well you speak will increasingly become the determining factor in your success.

You may already be a good speaker. If speaking has not been a requirement in your work – you may feel that you’re not a good speaker. In either case, I’d like to encourage you to look at speaking from a fresh perspective.

Here are 10 compelling reasons to improve your speaking ability right away!

1. BECOMING A LEADER.

Leaders speak. It’s that simple. But there is a priceless secret. Leadership does not teach us speaking skills; speaking teaches us the essential leadership skills! When you speak you add an emotional component to your ideas; your listeners understand you at a deeper level.

By speaking, leaders share their values, ideas and their enthusiasm. It is only when you speak that we truly know what you care about and we are moved to action.

Post-Recession Globalization

To the extent that there is anything good about an international economic meltdown, it can be credited with having forced a lot of law firms to reconsider their globalization plans. As the recession drove red ink for the international investments of many firms, more than a few of them are looking at their international offices and saying to themselves, “What were we thinking?” The post recession global expansion for at least U.S. law firms may hinge on what they have learned from their international experiences. And, those experiences may be equally instructive to U.K. law firms as they consider their potential expansion to the Americas.

It is always risky putting a label on something before it is completed but, at least as of now, it would be hard for law firms to call the current decade anything but the age of international expansion. For many U.S. firms, globalization rapidly went from being a seminar topic ten years ago to an underpinning of business strategy today. In fact, of the top 200 law firms in America, 70 have an office in the United Kingdom and 66 have an office in China. Of course, those numbers are chump change compared to the number of countries where large U.K. law firms have planted their flags. But, for a country where only about 20 percent of its citizens hold passports, U.S. law firms can rightfully view themselves as being in the vanguard of American global expansion. On the other hand, for British law firms, the U.S. has to be viewed as the land of opportunity. With a legal market approaching a quarter of a trillion dollars, the value of legal services in the U.S. is larger than the rest of the world combined and almost six times bigger than the U.K., the next largest legal market. With the financing opportunities presented through the Clementi reforms, the U.K. Top 50 was busily preparing their U.S. growth plans.

Making Informed Decisions, Taking Practical Steps

How do you plan for the firm’s future? What process will achieve greatest results? What resources do you need to make informed decisions? How do you create change? How do you get buy-in within the partnership? And, how do you get all aspects of the firm aligned so that you can move the firm towards success in achieving its goals?

PLANNING

In the twenty years this author spent in senior management roles within law firms, the planning process varied from non-existent to a critical part of the firm’s culture. The planning process has a greater chance of success if it fits the leadership model.

In a strong-leader model a top-down approach fits the culture. In this model the chair and the executive takes on the task, charts the firm’s course and then communicates the vision, the strategic goals and the plans underway to execute on those goals.

In firms that have a strong consensus model, buy-in is critical. These firms may have more success with a bottom-up planning process. This planning process begins at the grassroots with practice groups, industry groups and offices working through a planning process that involves a much wider group of partners. Leadership provides a framework so that the work of all groups will ultimately fit into a plan for the firm. This may fit a consensus culture and have a better chance of success where partners have a hand in mapping out their future.

Driving 2010 Revenue

The key to driving significant revenue increases, in spite of the current volatility, is to bend your efforts toward maximizing your rainmakers’ effectiveness.

In 37 years of practicing law and consulting to law firms, I have never witnessed anything that approaches our now-commonplace economic volatility. As I write this, there is breaking news of another global law firm suffering the impact of major economic reversals in one part of their world.

That “Doom and Gloom” image below is the headline from a post at my “Amazing Firms, Amazing Practices” blog, dated August 3, 2007. As you may recall, the legal economy at that time was robust, with no end to continuing success in sight. I was nonetheless deeply concerned for the future, for the reasons I set out in that article, and felt compelled to sound a warning.

This article is not about “doom and gloom,” or about the pessimism that naturally flows from these economic times. No doubt, the news is depressing — legions of staff and associates have been laid off, to be followed by salaried partners and even by equity partners in many firms. Profits will be down for some time to come, and the profession overall faces tremendous uncertainty. Some firms are panicking, while others are ready to give up hope.

Winter 2010 – Edge International Review

The Five Levels of Strategy

Risky Business