Firms use interim tactics to position for Indian liberalisation
1 September 2008
UK firms are waiting with bated breath for the Indian legal market to liberalise, but by all accounts the country is unlikely to welcome international firms anytime soon.
Clifford Chance’s hire of Indian capital markets partner Rahul Guptan from top Indian firm Amarchand & Mangaldas & Suresh A Shroff & Co, as reported on TheLawyer.com (19 August), is symbolic of the strategy pursued by many international firms, albeit it is unusual for the hire to be of a partner. This strategy is creating ill-feeling among some Indian lawyers and firms though.
Amarchand managing partner Cyril Shroff said that, by poaching Indian lawyers, international firms are creating distrust at an institutional and industrial level in India, although he added that Indian firms will continue to work with their international counterparts.
For international firms, building large teams of Indian lawyers is a good way to pre-empt liberalisation.
“The idea isn’t to practise Indian law, but to involve lawyers who understand the Indian regulatory environment,” says Clifford Chance capital markets partner Edward Bradley, who will be relocating to Singapore at the end of the year to lead the local Indian capital markets team.
The team will include new recruit Guptan and around five other lawyers, many of whom hold Indian qualifications. This ties in to a network of almost 200 lawyers internationally who focus on Indian markets.
Bradley says he believes that capital markets in India will be a lucrative area and one that, despite current weakness, will bounce back. “There are a number of very strong companies in India that will desire to tap in to international capital markets,” says Bradley.
Nevertheless, partner moves from Indian firms to international ones remain relatively rare. Aside from Guptan, one of the most recent happened a year ago when J Sagar Associates finance partner Srinivas Parthasarathy joined Allen & Overy’s Singapore ;office ;as ;a ;partner (TheLawyer.com, 11 May 2007).
One London firm’s India head says: “Only a few [Indian] partners have managed to make the transition. At that level many will be looking, but getting partnership at one of the international firms is tough for anybody. But right at the top end with the really top-level people, there may be a bit of movement.”
Fox Mandal Little managing partner Som Mandal agrees that partner poachings are unlikely to become a greater trend. By contrast, he says that the market for associates is buoyant, assisted by a perceived lack of career progression at many traditional Indian firms.
“Most of the Indian firms have been very traditional and very cautious about offering partnership,” says Mandal. “Many firms are first generation, controlled by one or two lead partners, who don’t try to promote young partners. As a result associates don’t make it past a certain point.”
An increasing trend is for Indian lawyers to set up their own small local firms to enable them to create links with international firms.
Mandal takes a different attitude to poachings. “Our point is simple,” he says. “If you feel there’s a better opportunity at an international firm, please go ahead and let us remain friends. Our view is, it’s good for building up relationships.”
And while tie-ups with Indian firms are increasing, the Law Society of England and Wales is also getting in on the act. From 2 September it will host a four-day ‘trade mission’ in London, Birmingham, Cambridge and Leeds, where around 20 Indian law firms will drum up business and forge connections with UK firms.
Liberalisation may not be landing for a while yet, but preparations are well underway for when it does.