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BENGALURU : The Bengaluru-based law firm that finds itself at the centre of a raging controversy following an unusual letter last week by venture capital firm Sequoia is facing an exodus of staff concerned about reputational damage, three people familiar with the developments said.

According to three former executives, at least 24 lawyers, including six partners, have left Algo Legal in the past two months.

The firm’s founder and the former Sequoia general counsel Sandeep Kapoor was also confronted by staff when the VC firm severed business ties with the organization in February, the people said.

“We got to know about the unfortunate incident with this startup in December," said one of the three executives, a former partner at Algo Legal.

The person was referring to the incident in December when a Bengaluru-based startup told its board members, including a Sequoia representative, that Kapoor had solicited business in an aggressive manner, leading to an escalation of the complaint to the VC firm’s US headquarters. Mint reported on 6 June that this incident, along with the outcome of a forensic investigation at the embattled Singapore-based Sequoia investee firm Zilingo, had prompted the letter from Sequoia last week cautioning portfolio companies against working with the firm or its related entities.

“Even though the news was not in public, we heard it from the folks at Sequoia and through our network. We then confronted Sandeep in February and demanded an explanation. He had his version of events, but that did not satisfy or assure any of us. Six of us put in our papers within the next few weeks, and in the last one month, we all started negotiating with other law firms for a position," said the former partner.

K. Venkat Satyanarayana was the first to leave in April, followed by Smita Goel, Ankit Guha, Namita Mathews, Tushar Thimmiah and Abhinav Bhalaik.

Mint could not ascertain how many partners were still with Algo Legal, as the law firm removed all information related to its team from its website on Monday.

“Nobody wants to carry this reputational damage," said a third executive, also a former partner at Algo Legal.

Developments in the last few months, especially last week, have triggered a massive debate. First, Sequoia cautioned all its portfolio firms against doing business with Algo Legal, making it more challenging for the firm to attract new talent, according to another former employee of Algo Legal.

In a letter, Sequoia said it had decided to cut ties with Algo Legal and four other entities linked to Kapoor, including Quant Legal Tech India Pvt. Ltd, Themis Associates and affiliated firms, OneDelta Technology Solutions Pvt. Ltd and One Delta Synergies Singapore Pte.

It advised portfolio firms working with Algo Legal to alert its legal adviser, AZB and Partners, about the relationship.

Kapoor set up Algo Legal in August 2019, five months after he quit Sequoia, to tap into the venture capital and private equity ecosystem, besides startups. An email query to Kapoor did not elicit any response till press time.

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