It has been through “the great depression of the ‘20s, the world war, the freedom movement, independence, the formation of the Supreme Court, adoption of the constitution, split of Maharashtra into two states, the formation of so many institutions that exist today – regulators, financial institutions, the birth and death of large corporates who rule the roost today and so much jurisprudence that has evolved,” says Cyril Shroff of the Amarchand Mangaldas brand as it celebrates its centenary year.
Shroff’s grandfather, Amarchand Shroff, co-founded the law firm and the family over three generations grew it to be the largest law firm in India, till it split in May 2015 with Cyril and his older brother Shardul going their separate ways.
To be sure, it is not the only legal services brand in India to last a hundred years. Little & Co dates back to 1856 and Khaitan & Co was established in 1911.
There could be firms which could be older than us but I think to remain relevant and so vibrant in the marketplace, I think there has been something special about the history of the firm and I think, with all humility, it is the value system.
Cyril Shroff, Managing Partner, Cyril Amarchand Mangaldas
In the early years of its founding Amarchand & Mangaldas (A&M) had two key practice areas – dispute resolution and litigation, and conveyancing and property transactions. The industry then was, quite obviously, dominated by British law firms. A&M succeeded by constantly challenging the status quo, says Shroff.
“If I go back and look at what are the lessons of history, I think at every stage the firm innovated, pushed itself one level more than what the status quo was at that time.”
Q – You worked with very closely with your father Suresh Shroff in Mumbai.
A – I am thinking of how he worked with great clients. Like he was a part of how Reliance Industries Ltd. came to the capital market, right down to when Reliance went public.
Or when the famous convertible debenture issues were invented. I think the convertible instrument was invented in our Lentin Chambers office with my father leading the charge.
So, those were the kind of contributions that were made by that generation to the capital markets, to corporate laws. Some of the battles that my father led was the Escorts case which is still the defining judgement on corporate democracy. Then later, there were a lot of securities market cases – Larsen and Toubro, Ambani taking over was one of them.
Q – The failed takeover?
A – I am not going to get into that. I am going to stick to public record for that. Those were some of the famous cases. But the kind of contribution that was made to the market practice and the evolution of corporate finance and project finance, the saying used to be at that stage when there were developing financial institutions like IDBI, which are still there, he was regarded as almost an institution by himself because nothing that they did was done without his clearance. That was the hold and the impact he had in that era. From a size perspective, it was a small firm but it punched way above its weight.
Family Run Firm, Firm Run Family
Shroff’s grandfather and father were lawyers, so was his mother Bharati Shroff, as is his wife Vandana Shroff – she studied law after marriage – and his two children Rishabh and Paridhi Shroff. Rishabh’s wife too studied law after marriage and now practices in the firm. Paridhi married a non-lawyer, industrialist Gautam Adani’s son Karan.
Older brother Shardul is a lawyer of course, married to Pallavi Shroff, daughter of former Supreme Court Chief Justice PN Bhagwati. Their two daughters and son-in-law are lawyers too.
Law has dominated the family and for a long time the family has dominated the firm. But Shroff avers Amarchand Mangaldas was the first to recognise which way the wind was blowing.
So non-family members in the partnership, a more fairer approach to sharing of profit, creating formal career tracks. I think the traditional way at looking at things was that you either had to be a son or a daughter to join the firm, there is no other way you could inherit into a partnership. Even if there was a multi-family partnership or there were different owners, the only way in which you could become a partner is to wait for your uncle or your father to move on and then you took their place. So that model was, I would say, fundamentally challenged by our model in the early 90s.
Q – But for a very long time Amarchand Mangaldas was known to be a family firm more than anything else. And in fact, in the last 10-15 years we have seen a lot of entrepreneurship in the legal space, young lawyers setting up their own firms, different firm structures, and in some way you are still a family run firm.
A – We still hear that but I would say that we are the only firm which has got a very vibrant career track in the way that we do. I mean there are hundreds of people in the firm who are not from the founder family, who have an equal opportunity to make a career and join the partnership. I think the model is very different now. We have so many executive institutions, committees and others that look at firm development as well. So I can see where that comment comes from but it is probably a founder-led institution rather than an founder-owned institution only.
Q – Reports suggest Amarchand Mangaldas hesitatingly opened up to a profit partnership for non-family members, and even initially when you opened up it was 5 or 10 percent. Conversations around the departure of certain key high profile lawyers over the last 10-15 years suggest that they thought that it’ll always be the Shroffs running the show.
A – I think that we have moved on a lot from that. Actually, if you look at the concept of broader equity partnership and first time an introduction of a modified lockstep in India, that concept was led by us, and it is still one of the few firms if not the only firm that has it in a formally documented way.
If you look at the entire set of tier one firms in India today all of them have founders in control.
Q – Founders is one thing but families in control?
A – I think the concept, of families as ‘controlling’, itself has got modified. You can draw a conclusion because there is more than one family member in the business, so it is a conclusion that we could draw. But the fact is power is much more democratised and there is much more institutionalisation of the firm that has already happened and is happening and it is a continuous reinvention process.
“Frankly we wouldn’t have been around for 100 years.”
Shroff attributes the brand’s long life to family ownership and its long term approach.
“I personally feel that if you take away the founder element of our history and our future, you actually create more serious risk on its continuity,” he adds.
Q – You have stressed that your firm is going to be a ‘single leader model’ firm. Is it ruled out that a non-Shroff will run it?
A – It is not ruled out. As a firm we will elect the best leader, choose the best governing model that is required.
Q – Given the history of the firm will you consider a non-Shroff? Or do you think it will dilute the Amarchand brand?
A – No. It is not the family that runs the firm but the firm that runs the family.
The Future Of The Firm
Last year witnessed a blistering round of poaching by the two Shroff brothers and their new firms. Shardul to build his presence in Mumbai and Cyril in Delhi. One media report estimated the number of partner movements, prompted by this hiring frenzy, at 150.
“I think the battle for talent was always there, at any given point of time the market gives a trigger that is required. The next trigger will come when foreign law firms come, or there might be something else in between. So one shouldn’t attribute too much blame to the split. If you look at the modern Indian legal profession, starting from the early 90s there were a lot of lawyers who were there for 15-20 years in the business and that was the time when also a lot of movements were taking place because people wanted change, and the professional organisation hadn’t evolved as much as the aspirations. It was the match that lit the fire, the grass was dry. I think this is not a bad thing, the firms are better because of what happened, I think we are also better today.”
The focus now is on “institutionalising” his firm says Shroff, that means more investment, more training. Of the many changes sweeping through the global legal services landscape – entry of non-lawyers, the slow death of hourly billing, the millennial talent problem, to name a few – Shroff ranks technology as the number one challenge, opportunity and priority. His firm has already started work on identifying the right artificial intelligence based solutions.
I don’t think it really makes a difference to some other more judgement oriented aspects of our practices. But there are very prominent parts of our practice that can very easily be done by machines the way things are going on in terms of how fast inventions are taking place.
The need to adopt technology will be accentuated if and when foreign law firms are allowed entry in India – an issue that has been seen much debate and only some progress.
“Foreign firms were always, in a manner of speaking, the wolf at the door and that forces firms to think of modernising and being more competitive. My personal view is that we should just get it over with and move on.”
Q – As a profession that most of the time is advocating free markets and more access, you’ll are a protected lot in India?
A – It’s now become a very convoluted debate and nobody knows where that debate starts and where it ends. Net result is exactly what you said. It has remained closed. So my personal view is we should just get this over with and move to the next level.
Q – If it were to happen do you see large scale consolidation in India to prepare for even larger global firms entering the country?
A – No, I think there will be few who will stand their ground and stay independent and a lot of others, they would see mergers and folding in to international firms as a preferred cost. Who they will be I do not know. But I don’t see too many firms wanting to remain independent. I don’t see more than three or four.
Q – So you are saying consolidation will happen but it will happen with the foreign firms. You don’t see Indian firms coming together?
A – No, I don’t see them coming together.
Q – Can you ever envisage a day when you think that the threat of foreign firms is big enough to prompt let’s say a Cyril Amarchand Mangaldas and an AZB to merge?
A – So, not getting into any names but why not. If that’s the way to survive and remain independent I would never say never. But the question is do you retain your identity and culture and traditionally our firm at least, the Amarchand legacy, has been an organic legacy because otherwise it’s very culture disruptive. Which is why we have been able to maintain our position. We generally don’t like mergers because it’s very culture destructive. Our comfort zone is producing our lawyers rather than acquiring lawyers.
There isn’t enough track record in India to show that same city mergers work. There is something fundamentally unready for Indian professional partnerships to expect this kind of model. I think Indian professional services and not just legal services need strong leadership to make that happen.
As the interview concludes Shroff recalls a line, penned by an Irish poet, that he says best explains surviving a hundred years.
The best way to serve the age is to betray it.