Monthly Archives: February 2010

Breaking the chains: free the young lawyers

As we are often reminded these days, the world is flat. Or at least flattening. Trade is global. As the economy picks up, the survivors from the Western economies pick themselves off the canvas, and look enviously at those economies that have continued to demonstrate solid growth over the past couple of years. Whether or not these economies are truly decoupled, the strength of domestic demand has undoubtedly contributed to their recent success, and I feel confident that as the West emerges from recession, the pace of global expansion from the big companies will soon pick up again.

Go on, break them....

So what does this mean for lawyers, and what has it got to do with chains? Leaving the chains question for later, for corporate counsel in companies that are entering new markets, the pressure to get up to speed quickly with local law and compliance, ways of doing deals, company secretarial requirements, labour law etc etc etc is significant.

While many corporate counsel may not be “on the ground” in these new countries (though many will be), the exposure to these new countries is significant and is often very difficult to prepare for even with the support of local lawyers.

I can recall being part of the learning process when my NYSE listed employer began to do business in Saudi Arabia for the first time. It was a steep learning curve for many of us, but fortunately a very positive experience. After a couple of years and a few deals there, the risks that we perceived when entering the market were in fact very different from the day to day challenges that faced us. As a lawyer, one of my first problems was finding the right advisor to help us. After having a less than successful experience with a global firm in the country, we ended up using an American ex-pat, who had lived there for 20 years. His understanding of the local business culture, coupled with his understanding of the modus operandi of  a US client, proved an excellent fit for us. He moved firm during my time instructing him, but the service remained consistent and I learnt a lot about the country (outside the specific legal advice he was providing) from working with him.

So where do the chains come in? Well, as legal markets deregulate, global competition intensifies. English and American lawyers are beginning to find that lawyers from outside the jurisdiction (for example in India, South Africa or the Philippines)  are giving advice to their clients, based on domestic (i.e. UK and US) law. Admittedly in many cases the advice does not extend to the most complex work, but it is substantive legal advice and the lawyers involved are learning fast and their cost structure provides an attractive value proposition.

By contrast, there are relatively few Western lawyers who are able to give substantive legal advice in the emerging markets. Don’t get me wrong, they certainly exist, (and the practice of rotating trainees in the global firms is an excellent way to get genuine experience in other jurisdictions, which can then be taken back “home” and leveraged for many clients) but they are not widespread and are often fully utilised.

But (and here’s where the chains come in), there are many, many lawyers in the US and UK, who never get any hands on experience of advising on projects in other countries. The traditional model of qualifying in one jurisdiction, and advising solely on matters subject to the law of that country is being stretched by the needs of today’s clients. Add to this the inherent risk aversion of many lawyers, and the limits their professional indemnity insurance may put on their ability to give more general advice overseas, and I think we have a set of virtual chains that need to be thoroughly examined.

In thinking about this situation, I think particular attention needs to be given to the impact on tomorrow’s lawyers. How can firms equip their trainees and junior lawyers with the ability to advise clients across jurisdictions. I’m not advocating that lawyers attempt to have a detailed (and up to date) understanding of the law in multiple countries; for all but the brightest, that’s unrealistic. But, I believe an understanding of how to do business in some key countries outside their home jurisdiction, a grasp of the culture, some key legal basics, and a good network of local contacts, would go along way in providing some very valuable assets for the firms, and a set of skills and experience that would equip the lawyers for a very different legal marketplace in future. Not all lawyers will need this training, but increasingly, an excellent grasp of domestic law may not be enough to ensure success.

So go forth and break your chains, but if you invalidate your insurance doing it, please don’t blame me…..

Team player or liability?

After watching the mighty Liverpool FC destroy their Mersyside rivals at football on Saturday (ok, it was an edgy 1-0 win, but let’s not get hung up on the details), my mind drifted to the importance of teamwork. From there it was a small, sideways step to pondering teamwork in law firms.

What role does the heavyweight partner play in the team?

The increasing size and scale of business deals these days means  that more and more areas of commercial law requires law firms to field teams. While once teams were the preserve of M&A and corporate departments, now technology, employment, property, commercial and compliance lawyers (among others) regularly work in teams, and more often than not, cross functional teams. This raises a number of challenges, the first being that confronted by many temporary teams that are pulled together for a specific deal or project, which is that team members are thrown together on an ad hoc basis, and expected to form a high performing unit. In the heat of a deal, team dynamics are often not considered and as a result the roles people play in teams are often not clear.

This can have the effect of having the right technical skills in the team (pensions lawyer? check, TUPE specialist? check) but not the right balance of personalities and working styles. For example, having a team full of great “ideas” people, but no detail-orientated “completer finishers” is likely to challenge a project timetable, whereas too many driven, leader types can lead to fireworks and conflict resolution getting in the way of client needs.  On top of this sub-optimal mix of lawyer ingredients, matters can be further complicated by different reporting lines, and competing time demands from other client (for example a large public sector deal may be the top priority for the commercial partner leading the deal, but just an annoyance to an employment associate who is pushing for partnership on the back of his retail sector employment expertise).

With added pressure to keep costs low, the temptation for many law firms might be to staff up project teams with the cheapest resource that could do the job, to help preserve margins. Aside from the risk of damaging client satisfaction (and many firms are now starting to think about client lifetime value), this approach may ultimately end up racking up higher costs than a carefully picked project team with optimal resourcing.

So what can be done? Much as it would be nice to do a Myers-Briggs team assessment, or a Belbin analysis on team candidates before each deal, and supplement the psychometric testing with an investigation into learning styles and feedback agility, I think we all know that’s not going to happen. What I think is important is that lawyers have the awareness of their team-working characteristics, and also seek to understand that of their peers. This does require some investment both by the firm and the lawyers involved. This type of profiling could for example be carried out on more permanent teams (for example sector teams or practice groups, where lawyers work regularly together), which would get people thinking about team dynamics as well as giving them an awareness of their own tendencies.

As part of the fundamental change that the legal profession is undergoing, this may seem a minor point, but when you consider that these team dynamics are becoming further stretched by cross-cultural and multi-organisation teams, I think effective team working is a crucial transferable skill that lawyers need for the future.