‘Entrepreneurship’ has been an exciting stint for India Inc. The services industry has seen waves of young India coming up with their own signature business ideas that have been full of innovative pomp and show. Amongst all others, no doubt the Indian legal industry has also seen entrepreneurship in various modes and shapes.
A quick glance through the law firm listings and an hour at various networking events happening across the country, one can understand that the market is getting flooded with law firm setups mushrooming at almost all the key legal centers of the country. It is quite interesting to see the organic trends that the sector has set to further welcome the entrepreneurship wave.
Shift in Culture
The chamber practice in this sector is gradually dissolving, especially in the metropolitan cities. Lawyers now are more inclined towards creating an institutional practice, and running it as a profit center versus merely a developing a practice.
With the infusion of foreign businesses and capital in the country, and the younger generation of business leaders who would rather put their faith in an organized business sector than a solo practitioner’s skills, the need for a firm set up is imminent.
Supply and Demand
The entrepreneurship bug has bit the India Inc. at large. With programs like Make in India and advancements in various fields like IT, research and more, the startup community is booming in India. This is definitely an encouragement for more lawyers to explore the possibility of setting up their own firms to serve the variety of clientele seeking legal advice for their business.
The different categories of entrepreneurship that one can identify in the industry are:
Old Traditional Firms
With a lineage to back them, these are the old school firms who have survived the test of time and evolved to be the survivors. Sometimes under the leadership of new and progressive Partners, such firms can also evolve to be the winners in this ever changing competitive legal industry. Traditions and history of the firm are the USPs of such firms.
New Boutique Firms
Set up by experienced lawyers. These are veteran lawyers, who have either been working as General Counsels and/or law firm partners, and have gained immense experience and specialization over the years. Their name commands a certain level of respect in the industry, and the rapport that they have built in the business community is impressive enough to warrant the promise of a thriving practice merely through referrals. Usually such law firms are smaller in size, with focus on limited practice specializations. The pull for such law firms is the partner(s) specializations and experience.
New & Upcoming Firms
Started by young and motivated lawyers in the legal industry. These are the classic cases of the startup culture effect in the legal industry. The zeal and faith of working for yourself is what motivates this young generation of lawyers to set up their own firms. The ability to network and generate new businesses are the key reasons behind success of such law firms.
Practices run by entrepreneurial lawyers within already established law firms. These are basically rainmaker practices within established law firm set ups. Star Partners who maintain an enviable book value and are synonymous to rock stars within their firm and the industry at large, quiet often prefer to main status quo within the comfort of an established firm’s infrastructure while still enjoying the perks and independence of running one’s own practice.
The route to branding and positioning for all these categories of law firms may vary based on their USPs. However, the strategic intent remains consistent for all:
The Personal Touch – Most business generated in the legal industry are based on referrals. However, this just doesn’t happen all by itself. Lawyers who invest time and resources in nurturing relationships with the key influencers or decision makers, are the ones who can cultivate the most referrals.
The Cautious ROIs – Don’t waste resources, in terms of money, time and talent, on anything that is not measurable. Pursue the techniques that you can measure. Identify and create long term customized positioning platforms. The way to strategic positioning in the highly competitive but relatively conservative legal industry lies in creating a right mix of initiatives, with elements of being personal, analytical and holding yourself accountable to a plan.
The Rule of 2.5% and 200 hours – This only means that a law firm investing time and man hours in positioning exercises should be observant and determined in taking such activities seriously, and abide by certain guidelines on how to go about it.
It is crucial to create a business plan right at the very beginning. Then calculate the 2.5 percent of the firm’s gross revenue. This includes the money that is directly spent on generating new business, like on taking clients out to lunch, or business development trips, conference sponsorships and so on. When you take out such a measurable and tangible sum out of your firm’s revenue and invest it back into growing the firm, you psychologically become accountable to every initiative you pursue.
Alongside the monetary investment, it is key to put in man-hours in all positioning and active business development initiatives. This may sound like a lot, but when you break it down on a per week basis, it’s really only about four hours a week. You can meet a referral source for coffee, or take a client out for lunch. All these short and non-time consuming tasks can be weaved into your weekly to-do list, and before you know it, you have already devoted more than 200 hours in a year!
This article was first published in Lex Witness July 2016 issue.