Nikhil Varma
Nikhil Varma
Apprentice Lawyer

In conversation with Nikhil Varma, Managing Partner at Miglani Varma & Co.

Starting a law firm is easy, sustaining it is not

Bar & Bench

Nikhil Varma has been practicing before a number of forums including the Supreme Court of India, the High Courts of various States, Gauhati, State and National Consumer Disputes Redressal Commission, various District Courts around the Country.

He has also undertaken a substantial amount of corporate work including setting up structures and trusts for high net worth individuals as well as a number of companies.

He currently heads the Risk Management, Business Advisory and the Corporate Law portfolios of the Miglani Varma & Co., where he is the Managing Partner.

In this interview conducted by Ramey Rana, Nikhil discusses the legal assistance that startups require, the importance of mentorship,

For the benefit of our readers, may you briefly explain what does the work of a startup lawyer entail? What is the nature of work that we are referring to with the term “startup lawyer”?

The work of a lawyer/law firm assisting a start-up is all encompassing. The mandate is much wider than it would be for a traditional client. Pretty much everything is thrown at the lawyer including the kitchen sink. It is not possible to have a laser focus, it is imperative to focus on the start up on a macro level.

We do not get onboarded for a specific task, in essence it is an entire project and the role of the startup lawyer is to participate in a manner similar to the founders and promoters.

What starts with simple tasks at the time of incorporation leads to an ever-increasing complexity once the strategic decisions are made. The goal in most cases is to take the company from its humble beginnings all the way to an IPO.

As a lawyer advising a start-up it is essential to hone your skills over a vast array of subjects and legal sub-fields. It does not stop there; you end up leveraging your own network to ensure that the start-up grows in the most optimal manner.

The work of a startup lawyer is to be a strategic partner advising the start-up not only for legal advisory, but also in raising funding, making the correct business decision and advice on many other facets.

What advice would you give entrepreneurs starting out on their journey and dealing with the repercussions of the current Covid-19 scenario?

We are living in unprecedented times. It is difficult to fathom exactly how the current situation will unravel in the long run. The pandemic came as a blow to many a business, and industries as a whole are still reeling and trying to cover ground.

At the same time there is such an abundance of entrepreneurial spirit that the future is definitely set on innovation. This spirit is unbroken as we have seen time and again with start-ups reworking strategies and pivoting at breakneck speeds just to stay in the game.

Gone are the days of old when companies would hesitate to make the slightest change to their business model, fluidity is the name of the game.

There are examples a plenty around us in the ecosystem where start-ups have recognized the changing market scenario and evolved, this can be seen even at the very advent of the outbreak. The ecosystem is growing and is full of experience, ideas, and innovators not afraid to take the necessary risks to succeed.

The basic piece of advice that I have for entrepreneurs is to keep analyzing data and to identify the market. There is no place for complacency in today’s ever-changing world. The start-up might have a great product, but the timing may not be right, their customer base may not be ready for it.

We have seen trends wherein company X and company Y have developed similar products two years apart. The product developed by X may not have fared so well, while the product developed by Y two years later may have led to disruption in the market.

While certain industries are suffering more than others, start-ups in these industries are not taking a passive role, rather they are looking at the future and innovating to stay relevant and fill in the gaps appearing in the market.

The need of the hour is to evolve and re-invent to fill the void rather than be dead in the water. The government also has to be given due credit for pushing innovators at this time and providing the much-required assistance.

The other major takeaway from all the success stories around us is to never back down in the face of adversity. It will never be easy, but if it were easy somebody would have beaten you to it already.

What are the basic issues faced by a startup at a nascent stage? What should startups do in order to avoid such issues?

An innovator may not be the most capable business mind, often times the ideas are disruptive but the execution is lacking.

Another shortcoming is the founders taking charge of the entire operation rather than focusing on their strengths, this leads to a dilution of their core skills and subsequently causes more harm than good to the start up.

There is no shame in asking for advice, rather it should be the norm.

A good board of advisors and experienced mentors are an unrivaled support for a start-up and could be an important contributing factor to the success of the start-up.

Speaking from experience, we owe a huge amount of our success to our mentors and advisors, who we turn to for advice and guidance without any hesitation. Leveraging the experience and insight of someone who has gone through something similar helps in making better decisions which in turn have a colossal impact in the direction of the organization.

Another issue plaguing start-ups at a nascent stage is the failure or oversight in terms of structuring the organization and promising equity to all and sundry.

Giving away too much equity at the start results in the founders losing control over the direction of the company post a few rounds of funding and there are several real-life examples of the founders being ousted from their own start-ups.

Another area that demands correction is that it is imperative for all involved to have a basic understanding of law and accounts. This will make it easier to adjust expectations regarding what falls within the realms of possibility. It is also extremely helpful when consulting your advisors to help you dot the i’s and cross the t’s.

Fierce competition is often awaiting most start-ups and it is essential to have realistic expectations regarding your own product/service. Over estimation of your product and underestimation of the competition may lead to the start up feeling dejected and losing steam over what could have been a successful project.

It is also important for the founders to take the tough decisions, they are not pleasant, but their absence may lead to poor management with disastrous results.

What should startups be looking for in a lawyer/law firm?

Selecting a lawyer/law firm by a start-up is a crucial decision with myriad facets involved. It is not the same as a corporate looking for a lawyer to assist and represent them.

In the normal course of events a recommendation followed by a meeting is enough to onboard counsel for a corporate.

This is where start-ups differ, they need someone who identifies with their core values and has the same risk tolerance. You do not want a lawyer who is risk averse for a start-up that is ready to take risks, they will reach an impasse more often than not, a start-up needs a lawyer/law firm that is ready and willing to get its hands dirty and fight in the trenches alongside the start up.

Start-ups often underestimate the need and value of competent advisory support and are willing to put the same on the back burner. This, in my opinion, is an unpardonable error. An initial misstep that can lead to a snow balling effect in the future leading to major ramifications which could have been avoided easily.

Proper structuring at a nascent stage, such as the corporate structure of the entity, having agreements in place, ensuring timely compliance, help in saving headaches and contribute to the success of the venture. Start-ups need to avoid ending up in disputes by ensuring that they have undertaken the groundwork required at the beginning.

While taking a call on the lawyer/law firm, start-ups need to keep a few factors in mind. Hiring advisors may eat into your reserves, though saving pennies now may lead to larger losses later, at the same time start-ups do not need to be gauged by legal bills. Start-ups need advisors who believe in the start-up and are not rigid in their outlook or working, a certain amount of flexibility is key.

A vast knowledge base spread out over various fields is a necessity. The lawyer/law firm should be able to make time for you and your queries and have a quick turnaround time. An added advantage would be an advisor who is part of the ecosystem and familiar with the ins and outs.

In order for one to establish a successful practice in startup laws, do you think it is essential; or if not essential, advisable for one to have some experience of working at a corporate law firm or working in-house with a company?

I think the most important factor is gaining experience and insight into the working of the ecosystem. You need to be a part of it, breathe it and live it. Your passion is what will set you apart and poise you for success. I spend at least an hour and a half daily just reading up on routine developments in the ecosystem.

No matter where you work you will gain experience, of course working at a corporate law firm or working in house will accelerate your integration into the industry, but the lack of the same should not act as a deterrent.

It is imperative to go for events, conferences and generally ensure that you meet people working in various fields, find out what their thoughts and opinions are and pick their brains.

How difficult do you think is starting one’s own law firm in India? Do you mind sharing some of your own experiences?

It has not been easy, but it has been an immensely rewarding journey. We have made mistakes, but I would like to think that we have learnt from them.

We have had successes, but I would like to think that we have not let it go to our heads.

I am humbled by the faith our clients, peers and our team has shown in us and allowed us to perform to the best of our abilities. Pratyush, my cofounding partner, and I consider ourselves lucky to be surrounded by the young, dynamic, and vibrant members of our team who have a never say die attitude and do not falter in the face of adversity.

We started our firm out with a common vision and along the way the team grew bigger and the determination to reach the goal got stronger.

We thought of ourselves as a legal start up, our product was legal services, the first step was to identify the market, the second step was to gather advice and experience from our mentors and the final step was to put our heads down and get to work.

What has guided us is our passion for our work and the unbridled joy at succeeding for our client. What drives us further is seeing how driven our clients are and the glimpses of ourselves that we often see in them.

All in all, starting a firm in India is not the difficult part, the difficulty is in sustaining the firm and remaining consistent.

What advice would you like to give to law students and young lawyers who want to venture into startup laws?

First and foremost, I would like to tell all the students out there that there is no one mould that fits all. Often, we ask students what field of law they want to practice in, pressurizing them to actively limit themselves to a particular branch.

I believe they need to experience all that there is on offer before making up their minds.

When it comes to start up law, it is vastly different from what we imagine the practice of law is, when we are in law school. Instead of going to court or working on an agreement, here you are trying to figure out how to set up an entire project and further strategizing the entire timeline for said projects.

There are a million working parts all interacting with each other and it is your job to think of countless possibilities that could arise from these interactions. Stepping into the ecosystem is an education in itself, it is akin to an accelerated program.

The most crucial lesson we learn from start-up law is to not be let down by failure. It is a part and parcel of life; we do not need to be defined by it. We need to be defined by our resilient spirit to keep trying instead.

I personally recommend that all law students should try to interact with start-ups, founders, advisors, and mentors and get a holistic view of the ecosystem.

(Ramey Rana is a Bar & Bench Campus Ambassador)

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