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When founders work on their businesses in the earliest stages, contracts and paperwork are the last thing on their minds. The only thing that matters is building. Lawyers or management consultants are rarely needed. It’s a messy, fragile, make-or-break stage, but it’s also when magic happens. Because everyone’s aligned around one goal: build fast, build well, build something meaningful that lasts (and is worth fighting for).
Things start changing as the company matures. With more people come more leaders and more opinions, with more initiatives come more moving parts, and with more money comes the inevitable question of how to safeguard or distribute it. Stability brings its own set of challenges: how to preserve equity, how to avoid missteps, how to ensure the goodwill of customers and regulators isn’t squandered, and how to ensure that the higher powers are never offended. The story is no longer only about building but also about defending what’s already been built. Creation now shares space with preservation.
The picture gets even more complex when businesses pass into the hands of the next generation. What began as a story of vision and grit often turns into one of division and entitlement. We’ve seen it play out in some of India’s biggest family enterprises.
At Raymond, Vijaypat Singhania and Gautam Singhania went from father and son to bitter enemies who had nothing good left to say about each other, all over property disputes.
The Lodha brothers have fought relentlessly over rights to the ‘Lodha’ brand, once their joint pride.
At Sona Comstar, Sunjay Kapur’s wife and mother are in the middle of a dispute over shares and board seats right after his death.
And who can forget the legendary breakup of Mukesh and Anil Ambani after the demise of their father, Dhirubhai Ambani?
Expensive lawyers now carry the fight forward, while the scions’ involvement in day-to-day business activities takes a backseat. Professionals manage business operations while consultants are often parachuted in to keep things in order. Despite the romantic belief that families rise above money, the numbers tell a harsher truth: globally, 40% of family businesses admit to disputes over wealth. In India, that figure jumps to 61% — among the highest in the world. When the agenda is wealth, relationships matter little, and forging everything together is largely in the hands of the lawyers and the judicial system.
Now imagine scaling these businesses by a factor of a few million, and you get something similar to a nation. Developed economies are like the business empires that now have the fourth generation in charge. Their challenge is less about invention and more about preservation and harmony. Invention and innovation do happen, but only if they have created the right systems for it. But a lot of their time and resources go into protecting accumulated wealth, managing the numerous, varied interests, keeping institutions intact, and fighting many different courtroom battles.
Developing economies, by contrast, resemble families still in their first or second generation. They’ve laid a firm footing, but the work is far from done. There’s a hunger to keep building — factories, roads, software, startups — but alongside that comes the first hints of preservation. Systems for regulation, governance, and dispute resolution start to take shape.
And then there are underdeveloped economies, akin to families still searching for their big idea — no empire yet, just survival, trial, and hope.
America is the clearest example of what happens when an economy matures and becomes layered with competing interests. It has become unusually legalistic — Alexis de Tocqueville noted way back in 1835 that “scarcely any political question arises in the United States that is not resolved, sooner or later, into a judicial question.” Nearly two centuries later, that is truer than ever. The U.S. has twice as many lawyers per capita as Germany and four times as many as France. While India has a lawyer for every 1,500 people, America has one for 240.
This glut of lawyers is not accidental. As economies expand, the number of interests, rules, and disputes multiplies. The late economist Mancur Olson observed that a thriving, successful society inevitably grows more complex, creating room for those best suited to navigating that complexity — lawyers in politics, consultants and financiers in the economy. They become essential to protect wealth, equity, and reputation. In literal terms, they don’t actually create any value, but simply help redistribute and protect what’s already created. Ironically, such jobs are among the highest-paid professions. Investment bankers fall in the same category.
But this abundance of legal pathways can often paralyze progress, turning every move into a slog through courts and contracts. Protection, after a point, risks suffocating creation.
Your chosen occupation may also reflect this. If you’re a lawyer, you’re more likely to find bigger and better opportunities in the more abundant economies. If you’re an engineer or entrepreneur, the opportunities to make a difference will be higher in the developing economies.
Take China. It is still in hyper-build mode — roads, ports, factories, mines, electric vehicles, chip foundries. India, too, has the energy of a nation building at speed. Here, the need for lawyers and other compliance professionals in business is relatively low, while the demand for engineers, operators, and innovators is immense. For most African nations, there’s very little need for the enablers and a dire need for builders.
Contrast this with the United States. Its thriving institutions continue to support innovation, but the sheer scale of the economy means the need for lawyers is staggering. With so many competing interests to protect, the system cannot function without armies of legal and financial intermediaries. Europe, too, shows a similar tilt. China may remain an exception even at size: its communist framework means it isn’t compelled to protect every interest through law.
It would be simplistic to draw a single rule, but a pattern is clear. For those who see themselves as builders, the richest opportunities today lie in organized developing economies like India. For those who thrive as enablers, the stage is bigger in large, stable economies like the U.S. and the EU.
A question for you:
Does your occupation match your geography? Where do you think you’ll be valued the most? Don’t restrict your imagination.
Write to us at plainsight@wyzr.in. We’ll include the most insightful answer in next week’s edition. :)
What we’re reading this week
Abundance by Ezra Klein and Derek Thompson. explores how societies grow more prosperous yet more complex, creating both new opportunities and new bottlenecks. It argues that progress isn’t just about producing more, but about learning how to manage the abundance. I like the insights, but the only drawback is that it’s completely US oriented.
Until next time,
Best,