INTRODUCTION
Changes in society, the speed at which transactions are done in this era of modern communication, as well as the growing internationalisation of the practice of the legal profession, have already led to change and will lead to further changes. This is what is affecting the legal industry. The lawyers profession is no-longer just seen from the needs of the members of the Bar. Public opinion sees and values the profession differently, depending on the area in which the lawyer is working, and this must be addressed also. International law firms are seeking cooperation from other practices across the globe and are increasingly looking for mergers with foreign law firms. This leads to larger entities, i.e., law firms that offer legal services transnationally or even worldwide. Among other things, this development is connected to the liberalisation of professional services in Europe. A step towards liberalisation was of course the introduction of the Establishment Directive across the EU.
COMING OF AGE
The new breed of young lawyers, who are seen less in black robes and more in their pin-striped suits, offer cutting edge legal services for Indian and multinational companies. Technology has made serious inroads – a Remington typewriter and steno dictation have given way to pagers, mobile phones, dictamachines and laptops – for lawyers are always concerned that they may overlook something relating to work. They carry their work home and are available on call. The Internet has worked as the great leveller. Electronic mail has become the killer application. The new legal eagles are outward looking, enterprising, client friendly and draw from international experience. They are not just litigating lawyers. A big chunk of their work includes non-litigation practices like mergers and acquisition, joint ventures, intellectual property or advising an entry strategy for foreign companies.
In other words, Indian law firms have also come of age. Since the early 90s, a new number of law firms have mushroomed in cities such as Delhi, Mumbai, and Bangalore, and most of these are headed by young and talented lawyers. Lalit Bhasin, Managing Partner, Bhasin and Company and the President of Society of Indian Law Firms, says, “They have very good infrastructure, employ the latest technologies, and their offices can be compared to those of any good law firm in developed countries”.
Earlier, clients would attend conferences, take advice and pay fees – no questions asked. The lawyer had a monopoly in rendering legal services – a potential client had no other alternative. Now, the scenario has changed. Accounting majors worldwide are the largest employers of lawyers. They were deferential – that loyalty is now past. Many are revolting. They increasingly demand quality service on time. They often query fee bills and hesitate little before moving on to a different professional. They sue for negligence and professional misconduct.
The new age law firms are not merely convenient set-ups for their clients, but also are supportive of new entrants in the legal profession. While in a traditional set-up, a fresh lawyer has to continuously work for his name for a meagre salary, no appreciation and be subjected to the whims and fancies of his seniors, a firm is a totally different ball game. Campus placements are common. Salaries are in six digits. Work and projects must be continuous and lively, or else it is goodbye from ambitious colleagues. Equity partnership must come soon, otherwise there are always better alternatives. Fee earners no longer put up with what is thrown to them.
It is quite a change from the firm of yore that was family centric or dominated by one powerful personality. Undoubtedly, some of the biggest lawyers – Fali S. Nariman, Harish Salve, Kapil Sibal, K. K. Venugopal, or Abhishek Manu Singhvi – still enjoy the top of the mind recall. The difference between them and the new age law firms is that while the former have top litigating lawyers, mostly taking Supreme Court cases, they are definitely one stop shop for the legal services like the latter.
CATCHING THE BUSINESS WAVE
What has brought about this change in the role and nature of modern law firms? The changing business environment is definitely the biggest driving force. With liberalization, business became global and complex. There were joint ventures to be struck, technology agreements to be drawn up, and complex revenue and profit sharing deals to be negotiated, sticky Intellectual Property Rights and various other such complex issues to be sorted out. With the stakes growing higher, it is impossible for one person to manage all that and even more. This not only resulted in the growth of new firms, but the old ones were forced to restructure themselves. Personality based practice gave way to team based practice. The single senior lawyer set-up is giving way to professional and organizational set-ups.
A boom in new areas like information technology, biotechnology and media has come as a blessing for law firms. Some of these firms have not only lawyers, but doctors, management graduates, chartered accountants and engineers who have picked up a law degree to complement their basic specialization. These firms have offices across the country and abroad. So if a venture capitalist client wants to know about the upcoming legal, ethical and other issues pertaining to Intellectual Property Rights, these firms with their multi-faceted teams are well equipped to handle it. But you would be wrong if you dismiss these firms as a backroom player. They are hired as legal counsels for various cross border acquisitions by the leading multi-nationals.
THE TREND SETTERS
Consider Amarchand Mangaldas, one of the oldest Indian law firms (set up in 1917). It is the largest law firm in the country with 140 odd lawyers on its roll, and has expertise in a range of areas. They believe that size and quality are very important for a firm. It is directly linked to timely delivery and results. Delhi’s Dua and Associates is one of the first firms to set up separate practice groups for banking, insurance and privatisation. It has advised on more than 15 PSU disinvestment cases, both on the buy and the sell side. To accommodate non-lawyers, it has even formed a separate arm, Dua Consulting, which will work on public affairs, financial planning and regulatory approvals. Anand Pathak’s P & A Law firm has practices in Europe, USA, and Canada, besides of course in India. This has helped the firm grab a lot of work from Indian IT companies.
From 1994 onwards there has been a spurt in the launch of satellite channels, bringing forth several issues like piracy and thefts of signals. Ajay Bahl & Co. is one of the first Indian law firms to cut its teeth in media and broadcasting law. Bahl, a CA cum lawyer, did a lot of work in this area for New Corp, ESPN, and Star Sports and also structured the split of NewsCorp and Zee in the year 2000.
But, the Pathaks and Bahls are hardly the only firms to have gained from the opening up of the Indian economy. In fact, even some first generation law firms have hit the big times in a relatively short period. Delhi based Luthra & Luthra, for example, came from nowhere but is now one of the top grossers in the country, with annual revenues of more than 50 crore and high profile clients like Rolls Royce, Bank of America and Hewlett-Packard.
Although Delhi based law firms dominate the estimated 600 crore legal services market in India, there are Mumbai based CZB Partners and Chennai’s Surana and Surana who can be counted among the top ten. CZB Partners’ Zia Mody, 47, (daughter of Attorney General Soli Sorabjee), has been in the thick of virtually every merger and acquisition action in India. Be it Lafarge’s $300 million (Rs. 1,403 crore) acquisitions of cement divisions of TISCO and Raymond, Alcan’s $165 million (Rs. 772 crore) disinvestment of equity in Indal to the Aditya Birla Group, or advising British Gas on its disinvestments in India, Mody’s firm has done it all. Surana likewise has clients like Hyundai, who came to Chennai one and a half years later than Ford and actually rolled out the first car from its factory faster than the Detroit giant. Hyundai proudly acknowledged that success to Surana, which successfully liaised between the State Government and the Company.
CROSS BORDER LAW FIRMS
When we talk of setting up of law firms in the way mentioned above, one cannot help but think about the restrictions on entry of foreign law firms in India. The Advocates Act, 1961 puts serious restrictions on the acceptance of foreign law firms or even students from foreign universities as lawyers in India.
The truth is that an increasing number of Indian lawyers are studying and qualifying in foreign universities and working with international law firms; firms like Gargrat & Company, Nishith Desai Associates and Singhania & Co have overseas offices. Indian law firms (primarily the large ones in the metro cities) are forming inclusive informal associations with overseas practices. There is covert advertising internationally. Firms like Baker & McKenzie have confirmed that they would establish in India only after the regulatory scenario becomes more clear. Until then, like Denton Wilde Sapte, these firms would continue to work through their Indian affiliations. Ashurst Morris Crisp continue to have a presence in New Delhi. Kennedys of the UK have an indirect presence through Tuli Bakshi, also based in New Delhi. Chadbourne & Parke, LLP have withdrawn their license to practice in India.
Under the then Law Minister, Mr. Ram Jethmalani, the Law Commission of India in 1999 prepared a review paper of the Advocates Act and suggested a series of radical measures (and accompanying amendments to the statute). These include:
• To remove the existing barrier based on citizenship or nationality for regulating the legal profession and providing legal services in India.
• To provide a legal framework for regulating the profession in the context of emerging globalisation of legal services and to provide full and unlimited licensing to Foreign Legal Consultants (FLCs) and Foreign Legal Firms (FLFs) in India.
• To recognize foreign law degrees and to enrol foreign nationals holding such degrees as Advocate in India.
• To promote larger partnership of lawyers.
• To provide for multi-disciplinary partnerships between lawyers and non-lawyers.
• To have a positive approach to the internationalising of trade in legal services.
But, the attempts to rationalize the above stated law have been confined to mere discussions and recommendations.
There is no doubt that a silent revolution is underway in the field of legal services, but what may hold back its growth are restrictions in addition to archaic laws like the 20 partner limit for firms and the ban on advertising, hosting of websites and directory entries. The Naresh Chandra Committee on corporate governance has recommended that the limit be raised to 50 which, if accepted by the government, can do wonders for the growth of firms. But as for lifting the ban on self-promotion, its up to the Bar Council of India. After all, there are some laws that even lawyers cannot beat.