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Ramblings of a GC & former BigLaw associate: Law firms don’t add value, they destroy it

Burning money
Burning money

While hourly rates continue to increase and add up, the quality of India’s legal advice unfortunately continues to spiral downwards. Affronted? Well, you should be.

From my now more fortunate vantage point of a senior in-house position, I believe I can look back at my law firm years with a good amount of insider know-how, as well as healthy detachment.

Therefore, allow me to relate; you can reflect and let me know whether you agree (and no, in-house is not where burnt-out lawyers go to die quietly).

In transactions, you typically use a precedent obtained while working with one of the (far superior) foreign law firms, change a few names, rework a few clauses (most likely the miscellaneous ones) and then charge a lot more than a few lakhs for it.

But that’s only for the first draft, mind you. The trick is to send an extremely one-sided first draft. Then spend a few months negotiating those one-sided provisions and circulating various iterations. And once you feel your team’s time spent has guaranteed a sizeable bonus, good sense suddenly dawns and it’s time for signing.

And if you’ve jeopardised the deal in the process, you throw our hands up and leave it to the “principals”. Or worse, blame the other side for being too daft and stubborn. I tend to exaggerate for effect – but believe me, there is more than just a little truth in this.

Diligences are easy. Round up all the interns and a few first year associates and send them to poke holes in a company that has been in business for over 20 years or so. And why levae this vital task to juniors? Because it is beneath a senior associate to be associated with a diligence, and no law firm would want to waste seniors’ precious billable hours on a diligence.

A senior associate will however review the report (without ever having accessed the data room). Some lose all their hair in the process. Many grow thick-skinned and throw it to the partner. If the partner catches on that the report has nothing but summaries of irrelevant facts (which is quite often the case), there’s no one really to blame.

But blame must be placed so a lesson can be learned and so the first years are called in and yelled at. No one really learns anything, but it’s the usual cycle involved with most diligences. The legal fees for all this (including time spent yelling at associates), is anywhere between 20-30 lakhs on average and often far more for the larger transactions.

In legal opinions, there are so many “may be” / “should be” references that the client has to set up various calls just to understand what in fact the opinion finally is.

And then there’s the new trend of sending out “memorandums” which largely have the same content as a legal opinion but are not as pricey. And partners feel they can sleep better at night if it’s just a memorandum. What legal opinions and memorandums both have in common though is the overly lengthy content, excessive references to statutes and case law and irrelevant annexures.

Then there’s the disclaimer – from capping liability to legal fees to excluding liability if statutory authorities adopt an entirely different interpretation.

And what really tips the scale is the partner in charge signing the opinion by simply writing down the law firm’s name. There is some debate on how this is technically the right way to issue a legal opinion as it is the firm that is issuing the opinion and not the partner.

Yes, that’s quite evident seeing as how it’s the firm’s letterhead and the firm’s name at the end of the opinion. So if you can’t sign your name despite all the careful language the opinion is couched in, why bother to issue one at all?

Another trend, which is now part and parcel of corporate law practice, is ridiculous timelines: timelines that clients demand that no one wants to rationalise with. Or worse, timelines that we ourselves promise just to look good.

Today, being available on a Sunday or at 2:00 am for a call is what defines a good lawyer and the quantum of your bonus. 3,000 billable hours = one big fat bonus. Quality of work however has somehow missed the bus. Probably because no one has enough locus to assess it.

Many times, you spend the entire day negotiating lengthy agreements, the entire night revising them and send them out by morning “subject to internal review”. The internal review rarely ever happens.

Often, because the partner believes his / her role is complete by flooding the associate’s inbox with 10 precedents and sending periodic chasers.

The associate’s work is complete by copy-pasting provisions from the precedents. And the junior associate is just someone who stays back to stare at the associate and the screen to watch copy-paste at its best - all in the name of “training”.

That’s if you’re lucky.

Most first year associates find it downright ridiculous to be expected to stay past 8:00 pm. They come dressed to kill, talk their ear off and all they can focus on is their SoP for their LLM. And that’s about it.

But can you really blame them? Who would want to sell their soul to this sorry state that law firms have been reduced to?

This is not some vicious cycle situation that can’t be stopped. If we could only stop to acknowledge what we’re doing, we can work to fix it. But no one wants to. “Let’s increase hourly rates instead,” the partners say. That’s a quicker fix. 

In conclusion (as in a much-awaited ending to a legal opinion), this is not the case with all law firms and all lawyers. There are some truly brilliant lawyers in every law firm.

It’s just sad that they’re the exception and not the rule.

The author is currently an in-house head of legal after having spent many years at many leading Indian law firms.

Photo by Mike Poresky

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