In January 2009, Clifford Chance and AZB & Partners agreed a landmark tie-up relationship. At the time of signing the deal, this was considered by many commentators to underline the increasing importance of such arrangements for UK law firms’ India strategies.
However, whilst the agreement has delivered work for Clifford Chance, the firm has missed out on some key referrals from its Indian partner. When AZB was instructed recently by Indian telecoms giant Bharti Airtel on their $10.7billion takeover bid for the African business of Zain, it was Herbert Smith and Linklaters who picked up the instructions for the international side of the transaction.
If this raises a question mark over the viability of tie-ups, the research for RSG Consulting’s groundbreaking India Report 2010 offers some reassurances. Three quarters of Indian clients we interviewed thought tie-ups were a positive development for the market. Two thirds of the 120 clients that made up the sample group, viewed tie-ups as a greater benefit for the foreign firm than for the Indian one.
With Indian clients as positive as this, tie-ups should continue to be an important strategic consideration for Western law firms. The devil, however, resides in the detail.
Simply tying up with an Indian firm will not deliver a coherent Indian strategy. At best, it offers an opportunity to develop local knowledge and share business opportunities. The better aligned the interests, practice areas, and client bases of the respective firms, the more productive and profitable the tie-up relationship will be. The greater the synergies, the more the partnership will serve to reinforce and strengthen their practices. If the firms are misaligned, referrals will be limited.
Tie-ups are also not cost-free. There is the danger that in tying up with one Indian law firm, the foreign partner misses out on potential referrals from the rest of the Indian market. Tie-ups are high-profile and hence also high risk strategies.
Foreign firms should also bear in mind the flightiness of some Indian law firms who are daily refusing suitors. An un-wise choice of partner for foreign firms could damage brand identities in powerful ways particularly as many Indian lawyers have hazy boundaries around such subjects as conflicts and obtaining licences and permissions.
Obtaining a tie-up partner should not be considered the end of the road for an India strategy, but the beginning of a journey. The success of the journey ultimately depends on the suitability of the travelling companion.
FOREIGN LAW FIRMS
The Ties That Bind
In January 2009, Clifford Chance and AZB & Partners agreed a landmark tie-up relationship. At the time of signing the deal, this was considered by many commentators to underline the increasing importance of such arrangements for UK law firms’ India strategies.
However, whilst the agreement has delivered work for Clifford Chance, the firm has missed out on some key referrals from its Indian partner. When AZB was instructed recently by Indian telecoms giant Bharti Airtel on their $10.7billion takeover bid for the African business of Zain, it was Herbert Smith and Linklaters who picked up the instructions for the international side of the transaction.
If this raises a question mark over the viability of tie-ups, the research for RSG Consulting’s groundbreaking India Report 2010 offers some reassurances. Three quarters of Indian clients we interviewed thought tie-ups were a positive development for the market. Two thirds of the 120 clients that made up the sample group, viewed tie-ups as a greater benefit for the foreign firm than for the Indian one.
With Indian clients as positive as this, tie-ups should continue to be an important strategic consideration for Western law firms. The devil, however, resides in the detail.
Simply tying up with an Indian firm will not deliver a coherent Indian strategy. At best, it offers an opportunity to develop local knowledge and share business opportunities. The better aligned the interests, practice areas, and client bases of the respective firms, the more productive and profitable the tie-up relationship will be. The greater the synergies, the more the partnership will serve to reinforce and strengthen their practices. If the firms are misaligned, referrals will be limited.
Tie-ups are also not cost-free. There is the danger that in tying up with one Indian law firm, the foreign partner misses out on potential referrals from the rest of the Indian market. Tie-ups are high-profile and hence also high risk strategies.
Foreign firms should also bear in mind the flightiness of some Indian law firms who are daily refusing suitors. An un-wise choice of partner for foreign firms could damage brand identities in powerful ways particularly as many Indian lawyers have hazy boundaries around such subjects as conflicts and obtaining licences and permissions.
Obtaining a tie-up partner should not be considered the end of the road for an India strategy, but the beginning of a journey. The success of the journey ultimately depends on the suitability of the travelling companion.
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