I spent a good part of my weekend with a close friend, a VP legal of a finance company. He was helping me to figure out what to teach in a banking and finance litigation course.
This is an in-house lawyer who is meticulous, has every update on his fingertips and is respected for the depth and breadth of his knowledge. He has overtaken many senior lawyers to become a VP in a big private equity and finance company thanks to his sheer knowledge and ability to apply the same to complex situations.
He is totally the nightmare client of every law firm partner he hires for any work because he is going to take you to the cleaners if you bumble around with his mandate.
And he told me something very important in the course of our discussion. We talked for hours and hours on this theme, and I was fascinated! I do not want to take his name here because I have not taken his permission to share our conversation with the public, and I intend to continue to pick his brains in the foreseeable future.
I have spent several years now trying to understand what kind of premium learning products we could create for law firm partners.
With law firms and in-house legal teams, we have so far only managed to create courses that cater to entry-level to mid-level lawyers. We have so far not succeeded in creating or conceptualizing a program that would appeal to the partner level people in a big law firm. Even with our recent Legal Practice Development course, we are at best hoping to tap into senior associates and principal associates at best, and we have mostly attracted founders of boutique law firms and litigation chambers.
However, what my friend told me was eye-opening. I spent the next few days talking to other in-house counsels. We had a sense of this but had no clue that the problem was so widespread.
In a law firm, you always specialize. Very soon you begin to do the same kind of deals or work. You often deal with a finite set of legal instruments and legislation. Things are a little better in disputes and arbitration teams in law firms, but even they must specialize in big law firms.
This specialization is very important from a profitability and scalability point of view. If you do a lot of the same type of work, you tend to get that work done faster, productivity goes up, it is easier to train your team, and having seen a lot of deals of a similar nature you know what are the red flags to watch out for, and where the twists and turns in the tale may come.
And that is why clients often go to highly specialized law firm partners with a specific skill set and extensive experience in certain kinds of work.
At the same time, over-specialization over time can become one’s Achilles heel.
If you are a top dollar financial transactions lawyer, negotiating massive loan and project finance agreements day-in and day-out, you may not remember to get updated on the latest insolvency judgments or stay updated about amendments to a certain agricultural indebtedness act in a random state.
If you are an arbitration partner, it is unlikely that you are always updating yourself on the above issues either. You know how to look up the law when required, do you need to be an encyclopedia of laws?
That’s not how an in-house counsel, who instructs you, thinks about this situation though. He/she has a different take on it. I will come to that shortly.
Staying updated outside their immediate area of interest is a massive challenge for law firm partners, while they constantly get judged for the same by their primary clients, the in-house lawyers.
In-house counsels on the other hand, by the nature of their job, have to handle varied kinds of matters. If one day they are defending the company against a class action suit, another day they may have to deal with the environment ministry to get a project clearance. Sometimes it is an acquisition deal going on, and another time they have to prepare the company for getting listed. Contract drafting of different kinds and all sorts of disputes are dime a dozen. They have to jump from business structuring to labour law compliance and then on to engaging with policy professionals with equal elan.
Naturally, they are curious about every bit of law or regulation that may even tangentially apply to their company because they are after all the last line of defense. They cannot let anything slip.
And usually, they do not get to specialize. Many of them intentionally do not specialize, because if they want to become a general counsel (chief legal officer), for that they must have an understanding of a variety of laws, rather than just a narrow field. For this reason, in-house counsels make sure that they get to work in different sectors throughout their careers so that in senior years they can claim the kind of diverse and varied experience that a general counsel requires.
So we have a situation where the in-house counsels, the clients, have generalized knowledge of varied areas of law, and the service provider, the law firm partner, rarely has that. The law firm partner, on the other hand, may ask why he must have diverse knowledge. Is it not his specialist experience that the client is paying for?
The truth is that a lot of work that law firms used to do is now going to in-house legal teams. In-house legal teams have grown in size, stature, and depth, and the trend is in favour of corporate India spending more on in-house teams than on outside law firms.
This dynamic is fundamentally altering the economics calculations of the legal industry.
In-house counsels, therefore, would be more and more demanding and judgmental in times to come, while law firm partners will have to be super-specialized to survive in a more competitive environment where the more staple, easy and general work goes to in-house legal teams and not to law firms.
Hyper specialized work also makes sense from another perspective. Hourly rates are higher for such work, and in-house teams are totally out of depth when such work comes up. An example could be handling a raid by the competition commission. So law firm partners must specialize even narrowly in the decades to come.
However, this also means that law firm lawyers have to work harder to earn the respect of their clients (the in-house lawyers), and would need to have viable, easy avenues to update and train themselves in varied areas of business laws, and perhaps even public law, despite being hyper-specialized in their area of practice.
Law firm partners who know more about things outside their area of specialization, and therefore can match in-house counsels in terms of diversity of legal knowledge, will therefore be liked and respected more by in-house counsels as opposed to those partners who have no clue about things outside their area of practice.
There would certainly be more premium on knowledge, and what can be better for us? To be honest, we are still not very clear what our specialized product or services for law firm partners would look like, and it seems that our R&D will last for a while more. It would probably be a more sharp and curated version of the current Master Access program. Definitely a more expensive version.
However, we have a fantastic course for newbie in-house counsels or lawyers who want to impress their corporate clients with their wide knowledge of various business laws. It is our oldest course, and here is the link. Even if you are in an in-house counsel job for a while and feeling stuck in your career, I promise, you would want to check this out.
Check it out and let me know what you think I should add to this course.
Here is an article on what in-house counsels must learn about business laws that you may need to read.
Here are the other courses that close on the 15th of September.
Executive Certificate Courses