Long dominated by a select group of large, well-established firms, the Indian corporate legal scene is today changing as a slew of smaller firms emerge. And by providing personalised, specialised and cost-effective services, these boutiques are rapidly making their mark.
Even a decade ago, India’s legal market – especially on the corporate/commercial side – was dominated by a handful of large, well-established, family-driven firms. Lawyers making their way out of the country’s top law schools had few choices when it came to prospective employers, as did clients when it came to lawyers to instruct.
But in the past few years, all that has changed. Driven partly by ambitious lawyers themselves – either midcareer professionals looking to escape the straitjacket of established law firms, or young graduates seeking to carve an early niche for themselves – and partly by the evolving demands of clients themselves, who desire more personalised, specialised and cost-effective services, boutiques are now mushrooming across the land.
“The dynamic and yet convoluted nature of the Indian legal landscape makes the sector highly complex to traverse through,” says Vinayak Burman, managing partner of the Mumbai-headquartered Vertices Partners, founded in 2016. “Additionally, the high stakes involved in corporate legal matters has led companies to seek solution providers who cater to their specific requirements. The days of using a cookie cutter approach to rendering legal advice are behind us and today’s market demands firms that are adept at providing niche and specialized services.”
He adds that owing to clients’ requirements becoming more bespoke by the day, the market has today warmed up to niche solution providers who specialise in certain key sectors. “The idea for the client is to find the best advice which is focused and at the same time partner-driven and price-sensitive to the client’s requirements,” Burman says. “The ability to provide nimble and practical advice along with being empathetic towards the client’s immediate requirements has created a ground for options for the client and this has had a direct impact on the formation of various smaller and boutique firms.”
Abhishek Tripathi, managing partner of Sarthak Advocates & Solicitors, which was established in New Delhi in 2012, says that larger law firms tend to restrict lawyers to a defined practice area. “The larger the firm, the narrower the practice area, and after a point, this may stop exciting lawyers,” he says. “There are very few examples of lawyers transitioning to completely different areas of practice and even then, once you move, there is a tendency to pigeonhole in the name of specialisation.” He adds that the culture and environment in larger firms can be too entrenched to be amenable to change, making it daunting for some younger lawyers.
Tripathi also points out that the clients in a larger firm are often controlled by the senior partners or managing partners and their family members, to the extent that younger partners or counsel may get little credit of client management or retention. “Often the client management ability of a lawyer, and the client’s faith in that lawyer can prompt the desire to start a new firm,” he says. Finally, he notes that work-life balance has become a priority for a younger lawyer, and that can be difficult to achieve within a larger law firm.
Feroz Dubash, partner at Talwar Thakore & Associates (TT&A), which has offices in Mumbai and New Delhi, says that while there a number of factors behind the rise of smaller law firms, “the most important one seems to be that people are aspirational and either want to work for themselves or work in a truly meritocratic setting.”
MEETING A NEED
The biggest advantage that these boutique law firms have is their ability to closely tailor their services to meet the needs of clients. Burman describes such a “bespoke service” as follows: “A combination of lean partner-to-associate ratio, direct access to the relevant practice heads, better turnaround time for deliverables, a desirable price point for the quality of work, and most importantly, the personal touch or relationship aspect. Smaller firms are in a much better position to deliver all this.”
Tripathi agrees. “There is greater partner-level attention,” he says. “In larger firms, it is likely that mandates which are smaller in terms of deal value get assigned to relatively junior counsel with little involvement from the partner. In smaller firms, on the other hand, partners play a more hands-on role in deal execution, resulting in greater focus on the transaction.” He notes that additionally, boutique firms with specialised expertise can offer better work to a client requiring a service in a specialised branch of law compared to larger firms, “which may lack the same degree of competence in the relevant practice area.”
Larger firms may have a higher turnaround time on delivery of documents due to bandwidth concerns, adds Tripathi. “Larger firms also often have constraints around availability of counsel for meetings, conferences and so on. Smaller firms, on the other hand, usually have a smaller number of mandates, which ensures that they have better turnaround time on documents; also, counsel, as well as partners, are more available,” he says.
Then, of course, there is the issue of fees. “For the same level of experience and expertise, a smaller firm may offer the services at significantly lower cost than larger firms,” Tripathi says.
Adds, Debashis Khettry, principal of the Kolkata-headquartered Leslie & Khettry: Cost is a major factor. Smaller and routine legal work at a large corporate house is either being assigned to their in-house legal team or to a smaller firm, rather than to a single large firm, where it may not be cost-effective. Due to the high overheads in larger firms, their flexibility in reducing their fee for smaller work is limited. Smaller firms that outsource most of their administrative work have lesser overheads and are thus able to minimise their fees.”
RAISING VISIBILITY
Starting your own law firm is one thing; making clients aware of your presence in an increasingly competitive landscape is something else entirely. “Firms of our size face the issue of visibility sometimes,” says Tripathi. “Often, it is difficult to break into certain areas of practice such as capital markets. Some clients prefer only a big name. This will sound very idealistic, but the key to success, which can never fail, is to let your work and your integrity speak for you.”
Tripathi says that his firm tries to cultivate relationships with the promoter, senior management or general counsel level, by offering a variety of services. “Further, client-firm relationships can be fostered only when ‘goods promised are delivered’,” he says. “This requires having the ability to be honest to your new and potential clients about what is achievable and what is not, in terms of setting the expectation right. We believe that it helps when lawyers can understand and sympathise with the business realities of their clients and customise solutions that would mitigate the client’s
fears or risks. Therefore, lawyers who are adept at proposing innovative solutions to meet client contingencies are likely to gain trust.”
For Burman, the mantra is “client first.” “We have been able to scale to the level that we have in just two years of inception purely because of the connection that we have created with our clients,” he says. “The bond is a combination of trust, faith, relationship and expectation management and more importantly understanding the need of the Client and advising on a pragmatic and, yet, a proactive manner. What has been appreciated the most by our clients, both, old and new, is the fact of being able to pre-empt their need and requirement and customise the solution accordingly.”
Their views are echoed by Dubash. “There is no substitute for quality and having clients happy enough with your work to recommend you to others,” he says. “We have also been able to cross-sell between practice areas effectively. Finally, being able to do a small piece of work well has often led to our being instructed on more significant matters for the client.”
But a lack of visibility is not the only challenge that clients face. For Burman, the biggest challenge relates to retention of key talents that the firm hones and trains, who subsequently are at risk of being poached by the larger players. “The exposure of an associate in firms like ours to the entire spectrum of the transaction is far higher than what it generally is compared to larger firms,” he says. “We, therefore, become a favourite hunting ground for larger firms to poach lawyers at salaries which boutique firms at times may not be able to justify.”
The key to overcoming that, he says, is building an organisation where the monetary aspect is not the only reason why lawyers stay. “We thus have been able to hold on to far more of our talent, and create an atmosphere where everyone feels they play a significant part in the journey of the firm,” Burman says.
The challenge of retention is also felt by Dubash. “Managing both the career aspirations of lawyers as well as ensuring the correct size and shape of the firm can be difficult, as not everyone can be a partner and if people are enjoying where they work they may not want to leave,” he says. “There is also a greater pressure to do a good job as the firm may not have as broad a relationship across multiple practice areas. Finally, over time, I see larger law firms having the potential to invest more heavily than smaller ones in AI and other support and this is becoming a challenge.”
LEADING FROM THE FRONT
In small firm like these, leaders tend to play a more pivotal role as usual. “One needs to have one’s ears to the ground and eyes looking to the sky at all times,” says Burman at Vertices. “This leads to the neck getting twisted at times, but that is the cost of responsibility. Not only are you accountable to the clients, you are also accountable to the members of the firm, especially the non-legal staff. Hence the requirement of micromanaging, from billing to administrative work to rainmaking and finally to execution, makes you feel like a juggler.”
Tripathi at Sarthak says that office administration requires more attention in a smaller set-up. “While setting up our--I have acted as our accountant—human resources manager and IT guy at the same time. From time to time, you handle roles you never would have imagined.”
Dubash of TT&A says the six-partner firm does not have a leader and is “truly a partnership” in all senses of the term. “We all have management responsibilities, and there is a very real and immediate sense of ownership for all aspects of the firm. Most large law firms are more bureaucratic, with management responsibility concentrated in senior partners, founders and family members,” he says. “We operate by consensus, and because of a shared culture, we are able to move quickly and in a very collegiate way.”
So, what do they regard as their metrics for success? “In the short term, having satisfied clients, doing interesting work, attracting top lawyers, enabling them to work in a truly professional and meritocratic environment and having fun,” Dubash says. “Everything else follows on from those.” Tripathi says that the metrics for success go beyond revenue and profits. “We have adopted a path of steady growth at a reasonable pace after facing a few initial hiccups,” he says. “The metrics for success would include number of new clients added, value of deals, revenue, client satisfaction and depth of relationships with them.”
Burman concurs, “Revenue is a rather important function as it allows the firm to grow and expand, but what matters more is how small the gap is between the bottom line and the top line and whether the same can be kept at a minimum,” he says. “Besides the numbers, the most important metric of our success is the firm culture we are trying to build. This is a firm built by entrepreneurs and driven by the spirit of entrepreneurship, and we try to inculcate this into all members of the firm. Finally, The EQ level of the organisation needs to be always high, because a happy workplace is always an efficient workplace.”
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