India’s biggest law firm Amarchand & Mangaldas & Suresh A. Shroff & Co has announced the appointment of ex-Slaughter and May partner George Goulding as one of two outside consultants on its management committee.
Goulding joins the committee along with former Boston Consulting Group (BCG) partner James Abraham. The pair will each commit at least 40 days a year to attend monthly management committee meetings and assist in management.
Three family partners and four non-family partners also sit on the committee.
The appointments follow Amarchand’s decision to double in size to about 1,000 lawyers (17 October 2011). The five-year plan followed a review of the firm by BCG,, dubbed Amarchand 3.0.
Joint managing partners Cyril and Shardul Shroff said the firm would still run like a bicycle, with one wheel representing the founding family partners, and the other representing the non-founder family.
“We never, in our model, see the founder family exiting from the scene completely,” said Cyril Shroff. “We will continue to remain influential but we will see it as a partnership with a non-family (component).”
The aim is to evolve from a majority family owned and managed law firm into an institution that will survive alongside future generations of the founding family.
Under the Shroffs’ leadership, the firm has grown over the last two decades to 555 lawyers, of whom 59 are partners and 496 associates. They took over when their father Suresh Shroff died in 1994.
The family is committed to diluting its share under Amarchand 3.0. This has been an ongoing process since 1995 when it had a 100 per cent holding, said Cyril Shroff.
“Obviously we will always retain a sizable chunk to remain influential, in fitting with the theory of two wheels. But by 2017, we roughly expect we will be below 50 per cent – somewhere between 40 and 50.”
Most of the firm’s equity is currently held by the Shroff family – Cyril, Shardul and their respective wives, Vandana and Pallavi, who are also practising senior partners in the firm, and family matriarch Bharati Shroff.
The rest of the profits are shared with 18 non-family equity partners in a modified lockstep model. Partners on the seven-stage ladder accrue points over time, subject to satisfying the requirements to pass two “gateways” at three years and five years.
While the Shroffs are in a minority on the new management committee, which constitutionally operates by majority vote, Cyril Shroff said that even under the old one “no single decision has been taken which was not unanimous”.
The three Shroff members retain a veto only over “four or five… key strategic issues,” he said, including about whether Amarchand should align itself with a foreign firm and whether it should open offices abroad.
The non-family members of the committee will rotate every two years, with the managing partners nominating their replacements.
The Shroff line at the firm, excluding in-laws and those studying law, is currently being carried forward by Delhi-based daughters Natashaa Shroff (senior associate) and Shweta Shroff Chopra (principal associate) and Mumbai-based son Rishabh Shroff (associate).
Key elements of the BCG report
• Amarchand to double in size to 1,000 lawyers, 100 partners by firm’s 100th birthday in 2017. As a corollary, it is also targeting a turnover of Rs1,000 crore (£128m) by then, according to insiders (LegallyIndia.com, 16 October 2011).
• Three new offices in 2012: Chennai, Ahmedabad and Pune giving it a national footprint of eight. By 2017, the firm aspires to have an overseas office, location not yet decided on (LegallyIndia.com, 7 February 2012).
• Previous management committee of seven (Cyril, Shardul and Barathi Shroff, as well as four rotating non-family equity partners—currently Harry Chawla, S.H. Bhojani, L. Viswanathan and Gunjan Shah), now joined by two outsiders (see article)
• Dilution of family equity below 50 per cent by 2017 to cede share to non-family equity partners who are now all on a modified lockstep model. Introduction of two gateways into the lockstep that can only be passed if parameters are met
• Non-family equity partners cannot make capital contributions to the firm, although this is understood to be under review following some partners’ resistance
• Creating sector-specific service groups across practice areas to target clients in specific industries
• New practice areas and new heads managing practice areas nationally
• To hire a new national chief operating officer (COO), probably from abroad, and creating a new joint managing partners’ office sharing resources across Delhi and Mumbai
• Full sharing of clients and contacts across various offices and coordinated targeting of new clients
• Elaborate partnership and career development and assessment programme