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25 November 2013
If the live python, the jugglers, the bellydancers and the City lawyers wearing bindis were not reason enough to attend FoxMandal Little's (FML) recent London launch party, finding out just what the firm plans to do in the capital was.
FML is the first Indian law firm to open in the UK and is India's largest firm based on lawyer numbers. It has 365 lawyers based in offices in Bangalore, Chandigarh, Chennai, Hyderabad, Calcutta, Mumbai, New Delhi and Pune. It also has an office in Dhaka, Bangladesh.
But it is the firm's London opening that has grabbed the attention. The launch is not an attempt to take on City lawyers at their own game, explains international head Som Mandal.
"Practising English law is not on the cards for the foreseeable future," he says. "In England there is already an abundance of good qualified lawyers, so why would we want to compete?"That said, FML has managed to secure the services of one fairly well-qualified lawyer in the shape of Sir Gavin Lightman (see this week's cover). The recently retired High Court judge has been hired as a consultant to give the London office a high-profile face and guide FML lawyers on arbitration and insolvency matters.
However, Lightman will not be practising. FML will focus on attracting EU-based clients seeking to invest in India and advising Indian companies setting up in the EU or involved in EU arbitration, for which it will work jointly with local law firms. There is also a massive population of businesspeople in the UK who are interested in investing in India.
"We feel there's a huge need for advice for international and other UK-based companies on doing business in India itself," Mandal says. "London-based clients will feel comfortable walking across and getting advice in real time, not waiting for a call back the next day due to time-zone issues."
Formed in 2006 by the merger of India's oldest law firms Fox Mandal and Little & Co, FML practises banking, corporate, dispute resolution, employment, IT and real estate law.
The firm also handles some private client work: since most big businesses in India are family-owned, completing private work for oligarch families helps keep big clients in the fold.
FML's London office will be staffed full-time by English-Indian dual-qualified partner Ajit Mishra and two associates. It will receive additional support from India practice head Arlington Shahma and Mandal himself, who will both travel to London for 10 days each month. The City team will grow steadily but will not house more than six or seven lawyers in a year's time, Mandal says.
"So far we believe we are in a very good condition to convince clients to work with us, although some will also seek help from the India teams of UK firms," he adds. "But we want to get ahead in the UK before the liberalisation of the Indian market happens."
FML has distinguished itself from Indian majors such as Amarchand & Mangaldas & Suresh A Shroff & Co, AZB & Partners, Luthra & Luthra and J Sagar Associates by being the only Indian firm to support liberalisation.
Something of a hobbyhorse for Mandal, the liberalisation debate is one that he argues works to FML's advantage and prevents any other Indian firm from competing with it in London anytime soon.
"We support liberalisation as long as it's reciprocal," he explains. "But for one of the Indian firms that opposes liberalisation to then open in London would be for them to fall into their own trap."
FML supports liberalisation of the economy as a whole so it can take advantage of all the new clients and investment it would create. Mandal adds that it would be impossible to liberalise the economy as a whole but make an exception for the legal profession.
However, he claims just "10 lawyers hold back the Indian government and the entire Indian profession by strong lobbying". There has a large number of time-consuming, expensive challenges to new laws, which the government finds inconvenient and embarrassing. But Mandal believes these challenges will serve only to delay, not prevent, liberalisation and he is hopeful that it will happen soon.
However, Amarchand, AZB, Luthra and Sagar have all lobbied the government ferociously to set back the movement further. It is not that these elite firms do not believe in the concept of liberalisation, they just do not think the Indian market is ready for it. Yes, it should happen, but not for 10 or 15 years, they argue. But progress is being made. Amarchand managing partner Cyril Shroff recently admitted at a conference that it will happen in three or four years. That represents a concession.
Although Mandal believes liberalisation is inevitable, he is distressed that even UK-affiliated firms such as Linklaters ally Talwar Thakore & Associates and Allen & Overy's new best friend Trilegal do not openly support the cause.
The government is ready, says Mandal, but it needs to have the support of the Bar Council of India, so that is the organisation that needs to be lobbied for progress to be made.
The opponents of liberalisation have already convinced India's equivalent of the high street lawyer that liberalisation will put them out of business, when in fact they will be largely unaffected, Mandal claims. Roughly 90 per cent of India's lawyers are sole practitioner litigators handling the kind of work that is of no interest to international law firms, he explains.
However, Mandal still thinks that India is set to grow in significance for international firms, as unlike other economies India is largely immune from credit crunch-related problems due to the massive size of its population, which provides a large and growing market for goods and services.
International businesses that are presently fixated on China will shift their focus to India, he predicts, as India will soon overtake China as a manufacturing base. This will result from India's higher number of skilled labourers, who at present make the country a more expensive place to manufacture goods than China, but who are growing more competitive by default as China's workers get richer and demand more pay.
Crucially, Mandal continues, the Indian government does not force Western companies to joint venture with Indian ones for manufacturing contracts in the way that the Chinese government does, making it easier for investors to prevent Indian businesses from infringing their IP rights than in China, where IP infringement is a huge problem for Western investors.
FML is targeting Indian law students directly to convince them there will be better opportunities if foreign law firms come to town.
Unlike some of its competitors, however, FML is not interested in a merger with an international law firm should liberalisation take place. Instead, the firm wants to be "the Hengeler Mueller of India", Mandal explains, referring to the German independent that stood out from the competition by resisting the national fever for mergers with UK firms over the past 10 years.
"We want close relationships with London firms and to be in a position where even if firms had their own bases in India, they would come to us for advice," Mandal says.
He adds that even referral relationships will not be formalised. That said, the firm works very closely with Eversheds, which refers the majority of its Indian work to FML.
The pair share a key client in Tyco and FML recently won Boeing as a new client after a referral from Eversheds. In fact, one magic circle partner disparagingly compared FML to Eversheds and rivals such as Amarchand, AZB and Sagar to the magic circle.
Mandal retorts that his firm has the network of the former and the quality of the latter. He says the advantage FML boasts over rivals is its network. Even the biggest firms only have bases in Delhi or Mumbai, while FML is in eight cities across the country.
Addressing the argument that rivals are just not interested in the other cities, Mandal says that like in Germany or the US, state law is as significant as federal law in India.
Although Delhi and Mumbai are India's financial capitals, he adds, India's large number of state-owned businesses and government departments are spread across the country to limit regional rivalry and pork-barrel politics. A lack of presence will disadvantage firms as businesses based in cities other than Delhi and Mumbai get bigger.
It is that growing economy that UK firms want a slice of, and Mandal shares their ambition. As India grows more powerful economically, Mandal believes his firm is well-placed to grow with it. He signs off by stating that the London launch will not be the firm's last overseas opening. Can the lawyers of Dubai, New York or Shanghai expect pythons and bellydancers sometime soon?