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Elite Indian Law Firms Unlikely To Be Family Dominated in the Future

Reena SenGupta, founder, RSG Consulting – a UK-based legal consultancy, talks to Forbes India on the changing Indian legal landscape. RSG Consulting produces a comprehensive and independent study on the Indian legal services sector every year.

Published: Jul 26, 2010 06:53:54 AM IST
Updated: Jul 26, 2010 12:54:46 PM IST
Elite Indian Law Firms Unlikely To Be Family Dominated in the Future

AMSS (Amarchand Mangaldas) is trying to be both independent and family oriented. Can there be a new Indian model of global business in the legal industry?
That’s a very interesting question. Can a family Indian model work long term? From my research the feeling is: No it can’t, not long term. We have done a lot of analysis as to who are going to be the elite firms in five years time. Amarchand clearly has a headstart but there are other firms who are also doing very well in India. Many are consciously breaking the family model such as JSA who have eschewed the dominance of a sole proprietor or the family in favour of enfranchising junior members of the firm. Other firms such as relative newcomer Trilegal, established in 2001 by four young Bangalore Law School graduates, have done extraordinarily well. In our view, the elite of firms of [the] future will not be family dominated.

We did a survey of the top 25 Indian corporates of the ET 500 [Economic Times 500]. We looked at how many of them have family dominated boards. Only 11 of the top 25 companies are family dominated – and the trend does appear to be a move towards being non-family dominated. One of the reasons could be the number of recent, divisive business family disputes in India.

Who else ranks up there with AMSS in the Indian legal market?
AZB & Partners is in our opinion on par with Amarchand. They are not close to Amarchand’s size but they received excellent reviews in our recent report. The senior partners, Zia Mody, Bahram Vakil and Ajay Bahl have consciously set their model on a passionate commitment to quality and they’re great lawyers. The AZB junior lawyers are getting accolades from international and Indian clients who are very happy to instruct them with Zia in a more supervisory role. That’s not quite the case at AMSS where clients appear to be more concerned with having Cyril [or Shardul] Shroff personally deal with their matters.

In many ways the Indian legal market is like the US legal market of the1920s, it’s incredibly dynamic and institutional relationships are not fixed. But an elite grouping of law firms is beginning to emerge. This consists of AMSS, AZB & Partners, Jyoti Sagar Associates (JSA) and Luthra & Luthra who are run out of Delhi.

What are some of the challenges AMSS faces as the leader?
AMSS is clearly ahead in that elite group of firms but there is no guarantee that in five years time these firms will still comprise the elite category. There are so many variables that can change the status quo in the Indian legal market. What the market needs is professionalisation and a reduction of the sole proprietorship approach. That has to reduce if a firm is going to scale up and institutionalise. Egos [have to] take a back seat. JSA, for example, is a very modern law firm, in terms of its systems, training and approach to human resources. In our opinion, the JSA model should be sustainable. Here you have professional management and a transparent model of equity distribution. It’s open and easy to understand and everybody knows what they’re doing. And in 20 years, JSA has turned into one of India's elite firms.

What is the significance of partners leaving an Indian law firm?
The number of stars you lose tells its own story. A feature of US and UK markets in previous years has been a lack of partner churn. Partners are less likely to move if they have a stake in the firm. The attrition in the London and NY markets has only been a feature in the last 15 years and it shouldn’t be a feature of the Indian market at this nascent stage. The current rate of churn at the partner level in India is largely down to the lack of ownership.

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