Corporate law firms and their clientle

When Atul Dayal quit Kanga & Company to set up a new firm dedicated to Reliance Industries, there was a chorus of dissaproval from the law fraternity . Kanga & Company had served as legal counsel to Reliance since the Dhirubhai Ambani days and Dayal was a senior partner, second only to the legedary ML Bhakta.

In a profession where there is a very clear-cut distinction between a law firm and an in-house law department, Dayal had suddenly blurred the lines. His “captive law firm” is now seen as an aberration and other senior lawyers pray it will remain so.

Why the fuss? In a field where “independence” is important , corporate law firms usually take great care not be linked to a single client. Large corporates, for their part, prefer to distribute their work among several law firms, rather than be dependent on one, however good it may be. ”We don’t want all the work of a client and we certainly don’t want to be associated with a single company,” says Cyril Shroff, managing partner at Amarchand Mangaldas , one of the country’s largest firms.

Still, every lawyer has a favourite client, and it’s usually the one he’s handled the most challenging cases for and grown with. Amarchand has been linked to the Anil Ambani group, but Shroff says that’s not his favourite client. If he has a soft spot in his heart, it’s for two companies in the financial sector . “My favourite clients are ICICI and Kotak Mahindra,” he says. “Our firm has worked with them right since their inception and we’ve grown with them. For Kotak, we handled the migration from NBFC to bank. It’s the only such case in India so far and it took a year for us to navigate the whole regulatory process.”

Entering the office of Eruch Desai at Mulla & Mulla & Craigie Blunt & Caroe, it’s hard to miss who his favourite client is. Occupying pride of place on the shelf facing his desk are two faded pictures of the lawyer with GD Birla and with Aditya Birla. Over time, the Birla group has come to distribute it’s legal work among many law firms, but still, in the minds of the old timers, the association is still very clear - when you think of the 115 year old firm of Mulla & Mulla, you think of the Birlas.

Desai recalls his first personal contact with GD Birla on stage, at an annual general body meeting (AGM) of Hindalco in 1966. Mulla & Mulla’s senior partner NK Petigara passed way that year, and the firm sent Desai, then a junior partner, to attend the AGM in his place. “I had done the rights issue prospectus of Hindalco the same year, so I knew everything about the company,” says Desai. “When shareholders asked Mr Birla questions, I whispered the answers , which he appreciated.”
Through the 60s and 70s, most of the legal battles fought by the Birla group were against the government and Desai played a major role in all of them. For example, when Kiser Aluminium wanted to sell its 26% shareholding in Hindalco , the government insisted that the shares should go to the state-owned financial institutions .
“GD was totally opposed to this and we fought the case in the Kolkata high court and won. The shares went to the public,” recalls Desai.
A short distance down the road, in the offices of the equally old firm of Crawford Bayley & Co, veteran lawyer RA Shah has an office bereft of client portraits . That’s probably because his oldest client is Nusli Wadia, who somehow doesn’t make for a cosy portrait. Rather than business houses, Shah’s clients are best classified by industry. All the major FMCG companies — Hindustan Unilver, Proctor & Gamble, Colgate, Nestle, Britannia — are his clients. So are the pharma majors, from Pfizer, Abott and Roche to Nicholas Piramal and Wockhardt.

Before the new regulations restricting the number of directorships an individual could hold came into being, Shah held the record for the maximum Board memberships (over 50). “I am a strategic lawyer,” he says. “Clients come to me for advice when they have big issues. For routine problems, they go to others.”

Today, new law firms are working hard to build the kind of relationships that firms like Crawford Bayley and Mulla & Mulla have. It’s not easy, but one young firm that has managed a breakthrough is AZB Partners — and its big ticket client is no less than the House of Tatas. Some lawyers credit AZB’s success with the Tata group to the personal friendship the firm’s senior partners have with the directors of Tata Sons, but AZB senior partner Bahram Vakil says that’s not the way it works: “It’s not because of the friendships that the work has come our way. It’s the other way round. We’ve become close to the Tatas because of the work we’ve done for them.”

A friend of Tata Sons director Arun Gandhi, Vakil’s first contact with the group was through Tata Power. The company then wanted to investigate the possibility of acquiring the Enron power plant and Vakil was brought in becuse he was involved with the Dabhol project since its inception. That acquisition never happened, but AZB did go on to bag the brief for other major deals like the Tata Motors acquisition of Daewoo, Tata Steel’s acquisition of Corus and Tata Chemicals’ take-over of General Chemical. “The Tata Chemicals acquisition was particularly exciting ,” says partner Abhijit Joshi. “The seller was a hedge fund and the target company had footprints in Germany, Canada. We were negotiating a leveraged buyout with the lenders, with the assets of the target as collateral.”

With corporates distributing different types of work among law firms, the highest firm in the pecking order is the one that gets the M&A deals. Khaitan & Co, with its main offices in Kolkata, has always been particularly close to the RPG group but Mumbai based managing partner Haigreve Khaitan presents Anil Agarwal’s acquisition of Sesa Goa as an example of the interesting work the firm is doing. “Vedanta beat LM Mittal and the AV Birla Group on this acquisition because we were able to negotiate terms that went beyond the price per share. The transaction terms were very innovative and our expertise in tax laws helped,” he says.

Some firms like Majmudar & Co — whose logo is accompanied by a prominent band saying ‘international lawyers’ — are now targeting the new MNCs. When Microsoft set up operations in the country eight years ago, Majmudar handled the land acquisition deal in Hyderabad , followed by a series of intellectual property (IP) contracts with vendors and employees . “These type of contracts were new to India when we created them,” says partner Anoop Narayanan. “We had to negotiate with the lawyers at Infosys, Wipro, TCS, Satyam to ensure that Microsoft owned the rights to everything they developed for it. We even had to review the contract they had with their own employees.”
For new firms, IP has been often served as an entry point to large corporates. The seven year old ALMT Legal, for example , does IP work for engineering giant Larsen & Toubro and ALMT’s Mumbai based managing partner Sameer Tapia and Bangalore based partner SR Arun say: “We’ve got a team of engineers who work with L&T’s engineers to evaluate what is patentable. L&T has filed for 100 patents in the last two years, up from just 20 patents in the previous 15 year.”
And finally, at Kanga & Co, the new star client is Vijay Mallya’s United Breweries.

UB was earlier with Crawford Bayley and legend has it that Mallya switched to Kanga & Co when he saw ML Bhakta, Kanga’s senior-most lawyer, in action in a case where he was the opposing counsel. Since then, the firm has handled UB’s joint venture with Scottish & Newcastle , its GDR, convertible bonds and rights issue. The firm also played an interesting role in UB’s acquisition of Shaw Wallace.

“There was actually a conflict of interest, since both companies were our clients,” says partner Preeti Mehta, who has risen to take Atul Dayal’s place in the firm. “But that ultimately worked to everyone’s advantage because Mr Bhakta stepped in as the mediator.”

Top corporate law firms increase salaries for fresh graduates

Taking cue from their foreign counterparts, top corporate law firms in the country have, this recruitment season, begun offering fresh law graduates 30-50% higher salaries than last year.

They could go up to as much as Rs12 lakh a year, two-thirds more than what is expected to be paid to top talent graduating from the Indian Institutes of Technology, or IITs, but less than the Rs14-19 lakh, on an average, likely to be offered for graduates from the Indian Institutes of Management, or IIMs, in 2008.
Like other professional services, such as engineers and doctors, the legal profession in India, too, is witnessing a shortage of personnel. And the competition for talent has become more acute in the last two years, with international law firms also joining the recruitment drive.

Getting their due: With Indian companies loosening their purse strings, young lawyers such as these at a law firm in New Delhi, are being tempted to stay back in the country and not seek greener pastures abroad.

Foreign law firms are not allowed a direct presence in India. But the government is seeking to clear the way for foreign law firms to practice in the country.
“Our work is increasing by leaps and bounds and we need fresh intellectual output. But only few graduates, say two-three, who are exceptionally good and are from top law schools, are being offered these high salaries,” explains Anand Prasad, partner at law firm Trilegal.
Rajiv Luthra, founder and managing partner at law firm Luthra and Luthra, attributes the jump in offers to increasing competition between law firms in India. Confirming that his firm was offering higher salaries, Rs10.8-12 lakh, to fresh recruits this year, Luthra maintained that this was only an increase of 5-10% over what they had offered last year.
“It is what the market asks for,” he added.
There are around 700 law colleges, 400 universities, including those with deemed status, and 13 autonomous universities, such as Bangalore-based National Law School of India University (NLSIU), Kolkata-based West Bengal National University of Juridical Sciences and Hyderabad-based National Academy of Legal Studies and Research (Nalsar).
Around 250,000 students graduate from these law schools every year.
According to Roshan Gopalakrishna, a member of NLSIU’s recruitment co-ordination panel, an autonomous body of students that organizes placement drives, hiring by foreign firms from top law schools has been completed and that by their Indian counterparts will begin by April.
Neha Mishra, 23, a final year student at NLSIU, was made an offer by international law firm Herbert Smith Llp. “I’m still considering the Herbert Smith offer. Whether I choose to work in India or abroad, the quality of work will be good both ways,” she said.

Around 250,000 people pass from 700 law schools, 400 universities, 13 autonomous bodies a year

With Indian firms loosening their purse strings, students are being tempted to stay back here. If it does pan out, then this would reverse the trend in the last two years, when several young lawyers and fresh law graduates chose to join law firms overseas.
Last year, a little more than one-quarter of students from top law schools such as NLSIU and Nalsar left to join foreign firms overseas after their graduation.
“Even young associates from law firms left to join foreign firms or pursue higher studies abroad,” said Ranbir Singh, vice-chancellor, Nalsar.
According to Singh, the increase in salaries by domestic law firms is a reaction to the loss of talent overseas. “The foreign firms are a forwardlooking people,” he added, drawing a parallel to the scenario when Indian engineers went to Silicon Valley in the 1990s and later relocated to new offices set up in Bangalore and Hyderabad once the markets opened up in India.
Arguing similarly, Prasad believes that Indian law firms are also gearing up to tackle the impact of the entry of foreign law firms. “When some foreign firms come in, they will merge with or acquire Indian firms. Indian firms could also be raising their pay scales to prepare for this,” he added.
Some believe that progressively, top talent from Indian educational institutions offering professional courses, is considered equally employable as their counterparts from international schools.
”There should be a jump in salaries offered to our students since companies consider them at par with graduates from the best business schools of the world,” said P.K. Sinha, chairman (placement committee), IIM Ahmedabad.
According to Vishal Chhiber, head (human resources), Kelly Services India Pvt. Ltd, a global staffing firm, starting salaries for management graduates from leading B-schools in 2008 may range from Rs14-19 lakh a year. For IIT graduates in 2008, starting salaries are projected at Rs7-8 lakh per year, while students from regional engineering colleges can expect Rs3-5 lakh a year.
Nalsar’s Singh, too, believes that like students from IITs and IIMs, students from top law schools are considered as brilliant as the best legal talent abroad.
Corporate lawyers reckon that this increase in salaries for fresh graduates will lead to a revision of fees across the firms and as a ripple effect increase salaries of associates at law firms.

A Day in the life of a Corporate Lawyer

Corporate lawyers ensure the legality of commercial transactions. They must have a knowledge of statutory law and regulations passed by government agencies to help their clients achieve their goals within the bounds of the law. To structure a business transaction legally, a corporate lawyer may need to research aspects of contract law, tax law, accounting, securities law, bankruptcy, intellectual property rights, licensing, zoning laws, and other regulations relating to a specific area of business. The lawyer must ensure that a transaction does not conflict with local, state, or federal laws. In contrast to the adversarial nature of trial law, corporate law is team-oriented. The corporate counsel for both sides of a transaction are not strict competitors; together they seek a common ground for their clients. They are, in the words of one lawyer, “the handmaidens of the deal.” Facilitating the business process requires insight into the clients needs, selective expertise, flexibility and most of all, a service mentality. Corporate law requires an incisive mind and excellent communication skills, both written and oral. Through the negotiation process, lawyers constantly write and revise the legal documents which will bind the parties to certain terms for the transaction. This process is lengthy and typically corporate lawyers work extremely long hours. As a deal moves towards its closing, it becomes an exercise in stamina as much as skillful negotiation. As one person observed, “The most important trait a lawyer can have is a leather-ass. You’ve got to be able to put your butt in a chair and do the work.” The upside to this profession is the compensation is good and you usually work with smart people. One corporate lawyer remarked that she liked this side of the law precisely because the transactions take place among peers: There is no wronged party, no underdog, and usually no inequity in the financial means of the participants.

Paying Your Dues

In law, the pressure starts early. Law school admission is extremely competitive-the top twenty-five schools have an admission rate of about 10%. You can get tracked early: The kind of school you attend affects what kind of summer job opportunities you may have, which in turn affects the kind of permanent job you secure. The starting salary and kind of experience you have as a corporate lawyer can vary greatly depending on the size of the firm and geographic location. In a smaller firm, you will have more responsibility and more client contact early on, but the salaries can be tens of thousands of dollars lower than in a large firm. The content of your practice will be different too: A small town lawyer may take care of a house closing, drafting a will and a divorce settlement in a day; big city lawyers can spend months negotiating one commercial transaction.

Associated Careers

If they decide not to pursue partnership in their firms, corporate lawyers often make use of their expertise as an in-house counsel for a corporation. Others go into a related business such as investment banking, and a few teach.

Don't let the heavy workload and tight deadlines turn you off the idea of becoming a corporate lawyer. If you want to be at the cutting edge

Corporate lawyers advise their clients on a broad range of matters, including mergers and acquisitions (M&A) and takeovers, as well as on methods for raising additional cash, such as flotation on a stock exchange. The length of a transaction will vary depending on the type and size of the deal. Some deals are completed in less than a week, while others may take several months. For instance, Malcolm Glazer's recent £790m takeover of Manchester United Football Club took 15 months to complete.

As a corporate lawyer, you have to be commercially-minded as well as having a good understanding of the law. This means that getting to know your clients' businesses and the industry sectors is essential.

A corporate lawyer's client base is very varied and typically includes entrepreneurs, small privately-owned businesses and large multinational corporations such as pharmaceutical giant GlaxoSmithKline and BP. Most corporate lawyers also act for a range of financial institutions, including high street banks and investment banks.

The size of transactions on which corporate lawyers will work varies depending on the size of the law firm they work for. For instance, a lawyer working for a top 20 City firm will typically handle deals worth millions or even billions of pounds. Magic circle firms Allen & Overy and Freshfields Bruckhaus Deringer handled Glazer's bid for Manchester Utd.

In contrast, a lawyer employed by a law firm in the regions, such as Birmingham-based Gateley Wareing, would typically handle deals for small to medium-sized companies or family-run businesses.

The nature of deals handled by corporate lawyers may be affected by the state of the world's major economies. For instance, until recent months there have been very few companies floating on the London Stock Exchange (LSE) due to a lack of confidence in the performance of the FTSE100 (the index of the UK's top 100 share prices). The M&A market has also been relatively flat because companies have not had sufficient cash to expand.

In contrast, the private equity deals continue to be the latest fad. Private equity houses such as CVC and Apax buy businesses with a view to selling them off at a profit. For example, in July private equity house Cinven sold NCP, the UK car park operator it bought in 2002, to rival private equity group 3i for £555m. The sale resulted in Cinven converting its initial £140m investment into just over £400m.

The working culture

The pace in a corporate department can be very fast at times and it is not unusual for lawyers to work long hours, sometimes throughout the night. Although there is great pressure at times, most people manage to retain their sense of humour. With this hard work comes a great team spirit and a real feeling of satisfaction when a deadline is finally met; and there is also the party to celebrate the successful completion of the deal to look forward to. Of course, there are invariably quieter periods to allow you to recover from the busy times.

A corporate lawyer's day-to-day responsibilities will differ, depending on how many years they have been in practice.

Senior corporate lawyers will act as a transaction manager and liaise with the client's other advisers, including investment banks and accountants. They will also be the client's principal point of contact and will advise companies on strategic matters so that they can achieve their corporate goals. Senior corporate lawyers will also attend high-level meetings and lead negotiations. The complex nature of transactions means that junior lawyers are often handed less responsibility than their counterparts in other departments.

A junior corporate lawyer's work is extremely varied and can include such tasks as carrying out research, drafting agreements, sitting in on client meetings and conducting due diligence (reviewing a company's contracts with lenders, suppliers etc). The downside is that deals are usually very document-heavy, meaning trainees in corporate departments can sometimes get handed the photocopying and proofreading duties.

Trainees and junior lawyers in corporate departments also tend to work longer hours than their colleagues in other departments.

Why is this interesting?

Being at the hub of a large transaction is fascinating, as you will be involved in the deal from start to finish. It is also rewarding to read about the deal you were working on in the national press.

Personal and legal skills required

Corporate lawyers must have a good knowledge of the law and relevant regulations and should be commercially aware.

They also need to be effective team players because the sheer size of many deals means there will usually be a large number of lawyers from different departments all handling different aspects of the transaction. They also need to be organised and able to meet tight deadlines. With the long hours culture being prevalent, a good sense of humour is vital to help you get through those busy and stressful periods.