Corporate Law 2011: The year that was3 min read . Updated: 23 Dec 2011, 10:59 AM IST
Corporate Law 2011: The year that was
Corporate Law 2011: The year that was
Indian corporate law has been defined by friendships, enmities and new beginnings in what remained one of the most exciting legal markets in the world.
The year 2011 started with a crash as AZB & Partners and Clifford Chance Llp—respectively among India’s and the world’s largest law firms—broke up their barely two-year-old best friend referral arrangement.
When the non-exclusive relationship was started it was seen as a paradigm shift in the best friendship model that had so far been trailed by most of Clifford Chance’s magic circle rivals in the UK -- Allen & Overy LLP was joined at the hip to Trilegal, Linklaters LLP was wedded to Talwar Thakore Associates and Freshfields Bruckhaus Deringer LLP has had slightly more informal bonds with Indian law firm Platinum Partners.
Many observers were unsurprised, however, when AZB ultimately proved too big to be befriended. After the tie-up, AZB began to suffer as other foreign firms, which it had enjoyed close relationships with, began referring work to rival Indian firms, while tangible benefits for the AZB bunch, such as international exposure and world-class training proved to have only temporary lustre.
A similar but messier break-up followed shortly later in April, as time was called on the relationship between UK-headquartered corporate, insurance and transportation firm Clyde & Co LLP and ALMT Legal, which has offices in Bangalore, Delhi, London and Mumbai.
The reasons were more or less the same -- most of ALMT’s Indian partners had not experienced the benefits they dreamed a foreign alliance could bring. Clyde did, however, manage to salvage five ALMT partners to start its a new friendship with its own India-and-London-based captive Clasis Law.
A 2011 surprise was Ashurst LLP, which should still have been scarred from the infamous December 2009 decision in the Bombay high court Lawyers Collective case against three foreign firms. But Ashurst apparently found its courage again and entered into a best friendship with four-month-old DSK Legal breakaway India Law Partners (ILP), headed by Gopika Pant and Piyoosh Gupta.
Discussions such as whether the brand Ashurst could be on the Indian business cards were apparently intense (caution won and, they ultimately decided against it), but they were also understandable.
Most foreign firms in India are still spooked by the ongoing litigation in the Madras high court, that exist as the rightful heir to the Lawyers Collective case, after dragging a ragtag bunch of 31 foreign law firms, large and small, and a legal process outsourcing (LPO) company into a full-blown battle in mid-2010, accusing them of practising law in India illegally, even without having on-the-ground offices.
The case has taken its own sweet time, partly because of the huge number of respondents including the law ministry, bar councils and others, but few on either side seem too bothered about accelerating it.
The latest news is that the case will be next heard on 1 February, according to Dua Associates Chennai partner Senthil Kumar, who represents a number of US law firms. “The stand of the Bar Council is that the Bar Council has the power to regulate the practice of law within the territory of India—whether Indian law or law practised by foreigners," he explained. “Now the position is that the Central government has filed an affidavit (around one month ago) supporting the stand of the Bar Council."
Many of the younger generation of Indian corporate lawyers working in law firms are often privately in favour of allowing foreign firms into India, because many of them secretly hope to get poached by foreign firms wanting to set up their own local offices.
But if foreign firms were allowed in, we would arguably see far fewer of the charming and brave domestic legal entrepreneurs, who are taking fate into their own hands by setting out on their own. Start-up law firms excite the Indian legal fraternity like little else though few ever convert those into reality.
Nevertheless, at Legally India we covered at least six new start-up legal practices in the past 12 months, although some market observers’ estimates that dozens of new firms have sprung up in the past year alone.
One inspiring start-up of 2010 that stood out, was a bit of a young and hip supergroup-equivalent in Mumbai legal circles. AZB partner Vishnu Jerome and senior associate Shameek Ray, J Sagar Associates (JSA) partner Priyanka Roy and Talwar Thakore Associates (TTA) managing associate Ravi Kumar all handed in their notices and started a new firm, aptly if somewhat unexcitingly called Alliance Legal.
From this perspective, my prediction for Indian Law Inc. in 2012, despite continuing global recessionary fears, remains optimistic. Legal market liberalisation seems highly unlikely. Few, if any, new best friendships will be seen with foreign firms, as plenty more start-ups and breakaways will form as opportunities will continue to beckon.