Economic Times: Indian law firms shying away from best friend relationships?

Bar & Bench News Network

Sep 03, 2010

Economic Time’s Paramita Chatterjee writes a news feature on how Indian law firms are shying away from exclusive tie-ups with their foreign counterparts, a trend that was catching up in the recent past to get referral work from each other.

 

After mkt recovery, law firms shy away from global tie-ups 

 

INDIAN law firms are shying away from exclusive tie-ups with their foreign counterparts, a trend that was catching up in the recent past to get referral work from each other.


With the recovery in the domestic economy gathering pace, Indian firms have a lot to concentrate on in the country itself say lawyers. In an exclusive tie-up, Indian and foreign law firms refer work related to each others clients but as international acquisition transactions have slowed the advantage of a tie-up has diminished. A lawyer with a Indian firm that has an existing alliance with a foreign firm said: "The expectation of significant business coming from cross-border deals has come down in the last few months". 

 

At present, foreign law firms are not allowed to operate in India and the Bar Council of India prohibits joint ventures between foreign and domestic firms. But, global law firms have established their presence in India through informal tie-ups with Indian firms, aiming to understand the market before the legal services industry is opened to foreigners in the future.

 

Some of the global firms which have already set their foot in India through such tie-ups are Clifford Chance, Allen & Overy and Linklaters, among others. They have non-financial client referral arrangements with AZB and Partners, Trilegal and Talwar Thakore & Associates, respectively.

 

As key markets such as US and Europe are yet to come out of the economic slowdown and Indian companies are far from stepping up their global acquisition drive, local law firms have much less to gain from getting tied down to a single international counterpart.

 

Society of Indian Law Firm's president Lalit Bhasin said, "It makes sense for an Indian firm to work with different global players instead of tying up with one exclusively as that gives better exposure in terms of the number of clients". 


Som Mandal, managing partner at Fox Mandal Little, said law firms in the country are preferring to focus more on the Indian consumption story.

 

 

Please also read Paramita's news feature in 2008 titled, Global law firms seek tie-ups with Indian peers which lists out a number of foreign law firms scouting for tie-ups with domestic law firms as a first step for a footprint in India. 

 

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Comments(3)
  • 1. "It makes no sense for a firm like AZB, which in itself is a M&A machine to be tied down to a single English firm. If Indian firms stay independent for 5 more years then the English firms can forget about upstaging Indian firms in India. In my view, in about 5-7 years from now, Indian firms, if they dont get tied down (acquisition or JV, assuming the market opens) to a foreign firm, will start having global offices starting with Singapore and Dubai. Maybe, this is sensed, and is the explaination for the anxiety of the English firms to enter India. Why else would they be concerned about having an India office if the game plan is to service only the foreign law component of international transactions, which is currently also being done through international offices. Opening up of the market would effectively enable them to stymie possible future competition in places like Singapore and Dubai.". Anon, (Unknown City)
  • 2. "Though, times have changed since Zia did the deal with CC, today CC will not allow Zia to walk out of the deal, since CC has killed its own capability to do anything meaningful with India. CC used to be in the top rankings for India, not just in M&A but in finance, projects etc. Now they are nowhere to be found even in practices where Zia has no presence.Trilegal and T&T are proxies of their respective best friends and therefore all parties are benefitting from the relationship.Freshfields is in an even better position. They are not in any formal alliance with either Platinum or Bharucha but getting their pound of flesh (and much more) from both of them...Basically the news story is trying to say that AZB - CC structure has failed. the others seem to be doing well and even better are the US firms that are doing all the Indian work themselves while working with whichever Indian firm is schmoozing the most with them at that point in time! ". Anon,
  • 3. "it guid to join a law firm or to open a law firm.". Dalbir Ahlyan, (kurukshetra)
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