Exclusive: Almost half of a sample of India’s fastest growing companies still relied on domestic law firms to introduce them to foreign law firms, according to a report.

Sustained marketing from foreign law firms to India’s fastest growing companies yields instructions but 85 per cent still relied on domestic referrals to introduce them to non-Indian law firms, according to research by RSG Consulting, with almost half going by Indian law firms’ recommendations.

London-based RSG interviewed legal decision makers at 20 out of India’s 350 fastest-growing companies, of which 40 per cent said that foreign law firm instructions were the direct result of a referral made by an Indian law firm or its international referral network. One head of legal at a mid-sized media company even told RSG that he only knew of those foreign firms with tie-ups with Indian law firms.

A total of 85 per cent of the sample said that they relied on domestic intermediaries such as auditors, court advocates, investment bankers, entrepreneurial networks, trade bodies, other Indian businesses and Indian law firms to pick their overseas legal advisers.

The financial controller at an $800m public company told RSG that they were “not very familiar with the practices of foreign firms”. “When we do a deal we speak to other Indian companies and ask for their experiences and make the decision based on that.”

According to RSG’s findings, some of the youngest companies had not have any exposure to foreign firms. Chairman of five-year-old BPO provider Desicrew Solutions Rajiv Kuchhal said: “If and when we need to appoint foreign lawyers, we will ask for a reference. But it’s no good asking the same small businesses we go to for Indian law firm references. We will go to companies with international experience… or trade bodies such as Nasscom or UK Trade & Investment in India.”

However, according to some interview subjects, consistent face time and long-term efforts could yield profits for foreign firms. Sivaram Nair, who is the senior vice president, company secretary and general counsel at technology and BPO provider MphasiS, said that the company had instructed a UK law firm on the back of sustained marketing: “I was introduced to them at a conference and I saw a lot of proactivity in them. I didn’t use them for the first two years but they were always on the radar, updating me on the European market and meeting me when they were in town. I have been using them now for three years.”

Average growth rates of the 350 fastest-growing companies were 99 per cent, between 2009 and 2010, with an average revenue of $422m with 228 being listed publicly and 15 having floated on foreign stock exchanges.

Of those only 10 per cent had business operations in the UK followed by continental Europe with 9 per cent, but the most important jurisdiction outside of India for them was the US, Asia and the Middle East where between 19, 14 and 11 per cent had offices respectively.

RSG executive officer Yasmin Lambert said: “With an average turnover of half a billion dollars, most of these companies only have a listing in India but over a third already have operations abroad. These clients do not have established loyalties to foreign law firms as yet so represent a great opportunity for foreign law firms to get in at the ground level.”

Click to show 6 comments
at your own risk
By reading the comments you agree that they are the (often anonymous) personal views and opinions of readers, which may be biased and unreliable, and for which Legally India therefore has no liability. If you believe a comment is inappropriate, please click 'Report to LI' below the comment and we will review it as soon as practicable.
refresh Filter out low-rated comments. Show all comments. Sort chronologically
Like +0 Object -0 Anonymous guest 18 Feb 11, 10:41
duh! thats coz indian law firms are owned by oligarchs who harass foreign lawyers when they come here.
Reply Report to LI
Like +0 Object -0 Anonymous guest 19 Feb 11, 04:16
Maybe RSG should have included questions about the desire of Indian clients to pay fees of foreign firms. Or maybe someone should do a survey of international firms about the reputation of Indian corporates when it comes to haggling for fees and discounts.

After the initial euphoria of India growth story in an international firm, most sensible firms may perhaps be happier staying away from Indian clients who want to do business overseas and earn healthy profits but are not willing to pay the market rate for legal services there. This perhaps results in Indian law firms ending up advising Indian clients on foreign law, without being qualified to do so.
Reply Report to LI
Like +0 Object -0 Anonymous guest 19 Feb 11, 09:32
This survey was, IMHO, definitely paid for. Some indian law firms trying to tell the firangs who the boss is !!!

"Average growth rates of the 350 fastest-growing companies were 99 per cent, between 2009 and 2010". Unbelievable !!
Reply Report to LI
Like +0 Object -0 Anonymous guest 19 Feb 11, 09:37
@2, so whats wrong in haggling on fees and discounts? Any customer/client would try to get the best possible deal.
And yes, I have seen many transactions of Indian clients being advised by Indian law firms on foreign law....so what's your problem, so long as the client is ok with it??
Reply Report to LI
Like +0 Object -0 Anonymous guest 19 Feb 11, 10:32
#4 There is nothing wrong at all in asking for a discount in fees, especially in times like these. Though, whats not good is to get a (dis)reputation for haggling unreasonably. It does not help when most clients from a geography keep doing it all the time.

Also by your logic international firms should be free to advise on Indian laws. Anyways most international firms that do so do it through Indian qualified lawyers. Cannot say the same about others who profess to practice foreign laws...
Reply Report to LI
Like +0 Object -0 Anonymous guest 26 Feb 11, 01:38
how to get foregin jobs for in din law student without knowing their law how it can be posible
Reply Report to LI

refreshSort chronologically Filter out low-rated comments. Show all comments.