Raising Industry Standards: The case of Peruvian Cuisine
Lawyers tend to have an individual perspective of the legal profession. They are trained that way in our universities in Latin America. The predominance of the individual perspective over the collective view affects the life in the law firms where it is difficult to convince lawyers to align to common goals. In this way, competition supersedes collaboration and firm´s objectives are delayed or frustrated.
The individual trait is also observable at an industry level. Law firms compete against each other for clients, fees, reputation and talent, but very seldom they actually collaborate in common projects. You might find it in areas that are considered lateral to the firm´s business, like pro-bono work. But never in critical areas. Those would be considered confidential and dangerous to be shared outside the firm. The natural skepticism and secretive style of lawyers create barriers that make it hard to see that benefits might result from adopting strategies, innovations and improvements at an industry level. However, in a fast changing and competitive market this perspective should be challenged.
The revolution of Peruvian cuisine
One of the most outstanding successes of innovation and change in Latin America in the last decades has been the evolution of Peruvian cuisine. A group of outstanding chefs and entrepreneurs worked together for several years to change the concept of the food business in Perú and creating one of the main cuisine industries in the world.
A main features of this great achievement was the common approach taken by the main actors of this change. As explained by Gastón Acurio, chef and owner of the top restaurante “Astrid & Gastón”, they understood that the only way to change the traditional Peruvian cuisine into an international, top level industry, was collaborating among themselves. (“Crear o Morir! La Esperanza de América Latina y las cinco claves de la Innovación”, Andrés Oppenheimer). So they created several forums and opportunities to share information, recipies, strategies and concerns. In their view, a common improvement would benefit everybody since it would create a generally positive perception of Peruvian cuisine. This collective effort produced enormous results that would not have been achieved by any player on its own. Their vision proved successful: when you need to introduce significant changes in your market, collaboration provides much better results than competition since substantial benefits can only be obtained when a significant portion of the industry has adopted them.
Raising standards in the legal industry
It is quite evident that the Latam legal industry need to change and adapt to more competitive and modern challenges. Many firms are still in a pre-institutional stage, creating barriers and inneficiencies in their strategies and operation. The difficulty in creating stability and common views result in a fragmented way to provide services to clients, more dependant on individuals than teams. When complex legal matters require a combination of expertize and capabilities, the required interaction within the firm becomes cumbersome and ineffective.
I have often mentioned that lawyers are reluctant to deal with deep organizational matters in the firm. They delay or simply reject them. Sometimes they are scared that these topics might raise issues that could turn into an internal crisis and they prefer to deny them; in other cases, the lack of management backround makes them difficult to understand in their causes and effects. It is true that you can find a general interest in management topics evidenced, for instance, in the large attendance to management panels in the IBA. But the truth is that these panels can only provide a superficial approach and some basic tips. The general rule is that lawyers use very little of this information to change their firms. Conferences (even specialized, like the one we organized earlier this year in Sao Paulo –Law Firms as Businesses-) are only a starting point but not a solution in itself.
I recently conducted a seminar on management training for partners for five Latam firms from different jurisdictions. It was a two-day exercise where partners from different firms discussed and analyzed deep management and strategic issues affecting their firms. The exercise proved very beneficial for all of them since they were able to share their perspectives, difficulties and concerns on various topics. Listening to other firms´ experiences help in giving perspective on what is going on in your firm. Off course you can always have those conversations informally in conferences, trips and visits, but an organized and focused discussion brings and energy and depth that is difficult to achieve in informal and social interactions.
This experience also proved another important matter –which is the point of this article-: management arrangements and structures do not define individual competitiveness in the market. In other words, you will not find a secret formula for compensation or governance that will make you a great firm above your competitors. You will certainly be more efficient and qualified if you have a more developed management structure, but those are not competitive diferentiators, since other firms could easily used them too.
Like in the case of Peruvian cuisine, there are certain aspects of the business of law that would improve the market as a whole if they would be adopted by a significant portion of the relevant actors. Why? Because if you can raise the general perpection of a market quality, clients would be more willing to recognize that additional value. Hourly rates could be a good test for that. It is easier to raise your rates if the whole market is experiencing that increase. When rates are low in any given market, individual firms –even the best ones- have limited capacity to go above those standards. The Peruvian cuisine case shows that if you want to make a significant improvement in your market, then the whole market should move upwards.
I believe that management and organizational topics are among those where collaboration among firms is much more effective than competition, and where a productive and focused interaction could result in the increase of industry standards that the Latam legal market is needing to move to the next stage of evolution. The organizational and institutional challenge is probably the biggest hurdle Latam law firms are facing before becoming fit organizations to encounter innovation and change. An open mind and a collaborative approach among firms could be a great help in this objective, where everybody benefits from a general improvement. Like in the sea, a rising tide lifts all boats.
