The GC Insider: Uncovering the key drivers of law firm engagement with India Inc.

Today’s General Counsels want firms which are proactive, flexible, and pragmatic about costs, according to a survey by legal knowledge platform LawWiser. It is not just about winning a client but about retaining and enhancing relationships once they are forged. This is critical for the GC-law firm relationship.

General Counsels and law firms have a unique relationship, the dynamics of which have shifted with changes in the market. The role of a GC may vary depending on the size and industry of the company. What remains common, however, is that they are not just legal advisors but business enablers and integral members of the senior leadership. There has been a significant shift in the role that this position held earlier. Of course, the ever-changing market scenario, business demands and the needs for staying ahead of the curve are key to the evolving role of General Counsels.

This propels the need to evaluate and understand the changing dynamics that impact the decision-making process for selecting external legal advisors. As strategists who are core to business operations and decisions, what do GCs consider as critical while selecting law firms? And is the growth strategy of law firms in sync with these changing demands and evaluation parameters?

The GC Insider Report by LawWiser uncovers the key drivers of law firm engagement through an online survey followed by one-to-one interviews with senior legal counsels from diverse industries in India.

What are the key factors for law firm selection?

Expertise with proven track record is the prime factor considered in the selection of law firms by General Counsels. Clients want lawyers who are knowledgeable and experienced in their industry and can provide high-quality advice in a time-bound manner. (Un)Surprisingly, awards and rankings are not a reliable proof of expertise in a domain as per GCs.

Cost-effectiveness is the second most important factor, indicating the cost pressures which businesses are facing. Tier 1 law firms need to recognise the fact that competition has intensified and there are many new entrants who can compete on both cost and quality. Emerging firms are ready to take on smaller mandates and provide not just specialised expertise, but also innovative solutions to clients.

Another critical factor is that of comfort and confidence. It is here that prior relationships and individual connections play a key role in forging a long-term engagement. Once clients have built trust with a Partner and effective delivery is happening, they prefer to stick to that lawyer even if he/ she leaves the firm. This is a conundrum faced by most law firms, and it would be of value to strategize on how to institutionalise client relationships and provide clients with the confidence which would make them stay.

What are the pain points for General Counsels? And what is it that law firms can do to provide ease?

How to bill? This is a concern for both GCs and law firms. LawWiser’s analysis points out that billable hours are fading away as the industry standard. Hybrid fees with a common option for a cap on the budget and the element of hourly billing within that is also a preferred option. Clients are under immense cost pressures and want transparency from their lawyers. However, they do recognise that cost competitiveness does not mean squeezing their external lawyers. It is about developing a relationship which can sustain and grow in the long term.

Now coming to the dilemma General Counsels face of having to change law firms. The GC Insider report reveals that the top two reasons this happens is quality issues and lack of responsiveness. Quality means concise, commercially viable and timely advice. This means that the firm’s junior lawyers who do the bulk of the initial work need to be trained and continuously upskilled. It is also critical for Partners to clearly communicate to their teams about the client’s expectations, deliverables and timelines before things start to fall through the cracks. No client wants to have to follow up for updates. They expect their lawyers to be proactive, responsive, and accessible.

These may seem basic but isn’t it about time that law firms evaluate this and check if clients' expectations are being met before it’s too late?

The GC Insider report brings out some actionable insights for law firms to find and retain clients.

• Business acumen and commercial awareness are highly valued.

• Responsiveness and proactivity are crucial to building strong relationships with clients.

• Be flexible on fees to address cost pressures and avoid overbilling or double charging.

• Foster personal connections with clients to gain their confidence. Teach these soft skills to lawyers across all levels.

• Find ways to retain talent as clients are most likely follow the lawyer rather than stay with the firm.

• Build a reliable track record that can be showcased in ways other than awards and rankings.

It is time for law firms to understand that General Counsels are willing to research the market and look beyond the largest firms offering more flexibility and less cost. There is a need to be innovative and work outside the box, rather than going with the tried and tested solutions to protect your reputation. Lastly, there is a demand and need for external advisors who are proactive, and responsive in providing commercially viable solutions.

Readers can download the full report from LawWiser.com.

Sania Husaini is consulting editor with LawWiser.