Krishnava Dutt set up Argus Partners in 2009. The full-service law firm with offices in Mumbai, Delhi, Bengaluru and Kolkata recently adopted a modified lock-step model, with a view to bringing in transparency, fairness and clarity in its progression.
In this interview with Bar & Bench's Pallavi Saluja, Dutt talks about the firm's new equity structure and how it would help the firm grow. He also talks about the future of the firm, legal trends and much more.
Below is the video and edited excerpts.
In Conversation with Argus Managing Partner Krishnava Dutt - YouTube
Pallavi Saluja: What prompted you to change the equity structure of the firm?
Krishnava Dutt: If you look at the legal industry for the last ten years, you’ll see this gradual chipping away - from one partner joining, starting up with a team. Last year, we’ve seen some massive movements in three or four firms, including ours. Now, we need to understand the evolution of the Indian economy. The Indian economy is in a boom, and so is entrepreneurship. We’ve had 100+ unicorns.
The last generation, when they looked at jobs, they were looking at stability, security and all of that. But this is the age of entrepreneurs. They are looking at creation, they are looking at the ability to build. That structure, which is there in the Indian economic landscape, is also being mirrored in the Indian legal system.
So when we opened up, it was one or two or three individuals running the firm, and that worked then. But, today it’s different. Today, can you have a firm which does not give creative support or have the ability to build and actually ensure that there is a platform where the governance structure is transparent? Where there is no one person who is controlling and calling the shots? It's about giving a platform to these entrepreneurs.
I knew we had to get to this structure, so we discussed it for a long time. The current, very focused discussion started about a year ago. We engaged experts, we spoke to various law firms and then wanted to create a structure which gives exactly what I said - that there will be a whole platform created where the firm will support entrepreneurs. We’d be supporting and incubating entrepreneurs and that’s how the firm has been growing. Hopefully, with this structure, we will be attracting a lot more people who want that independence and genuinely feel a sense of ownership. Who will not just be working for a firm or in a firm, but working as a part of the ownership of the firm. That’s what we are trying to create.
PS: You said there are five levels in the modified lock-step. Can you explain that a bit?
KD: The modified lockstep concept is that you’re not on a treadmill. At every level, you’re automatically going up to the next step. There are five levels and each level has a number of steps.
What we’ve done is we’ve made the model transparent. So you’re very clear, there’s absolute clarity of what you’ll do and where you’ll be. It’s aspirational, and yet achievable. It’s not like the numbers we’re putting are so high that you can’t. So it’s something that is, I won’t say easily achievable at the higher level, but not unrealistic.
Each level has these gateways. And you cross the gateway and then you go to the next level. However, we had maybe 10-12 meetings with all the equity partners. We’ve decided that sometimes, even the gateway conditions sometimes need to be relaxed, for some exigencies. So it can’t be so straight-jacketed. The Executive Committee (EC) is the governance body which runs it and governs it. Effectively, the EC has the power to waive or defer certain conditions. Every level you go up, it becomes that much more difficult to come down. So you won’t be able to come down so easily, because the firm recognizes the contributions you’ve already made.
So it recognises your contribution and makes the coming down almost impossible. This gives a comfort that just because you’re here (the upper level), you’re not jumping all over the place.
PS: Does that make it harder to go to the next level?
KD: No, actually not. There are a few factors, financial being one of them. There are no subjective factors. As a firm, as a partnership, we’re looking at three things. One is quality of a lawyer. The second circle is the business acumen, in terms of their ability to hunt and farm or mine clients. Three is leadership, because if you want to grow, you have to build a team.
All these three are linked. All the partners agree that none of it is unachievable. If more people are able to achieve this, the equity pool actually grows. We did the math and decided to make the gateways far more achievable.
PS: The press release mentioned that the new structure also aims to be empathetic towards situations beyond partners’ control and other circumstances like maternity and child care.
KD: That’s something which is very, very close to my heart and I see we have missed out almost 50% of the talent because there is no system which recognizes that when a woman becomes a mother, there has to be a system. So, one is infrastructure. We created a creche in the Bangalore office to ensure that the kids of some of the partners can be there.
Just imagine – someone who’s brilliant, hardworking, is pregnant, has child care; just because of that should she be penalized since she could not achieve the target and you will not go to the next level? That just can’t be! That’s just grossly unfair.
We want to tell people, 'You won’t be penalized just because of something that is not within your control. If you become a mother, if you need child care, if you have an ailing parent who you have to go out to, don’t worry! The firm recognizes your earlier contribution and will waive those conditions to go to the next level.'
So you won’t get stagnated because of certain special conditions. That’s something I believe is going to be very unique for us.
PS: Where do you see Argus in the next five years?
KD: It has been an exhilarating journey for thirteen years. We thought of taking it one step at a time and started with a few people. Today, we’re almost reaching two hundred people. The last three years for us has been a good journey. We are fortunate enough to do some of the biggest transactions. And they weren’t one off, but consistently, from different clients.
So, I see that growth in terms of operations, in terms of work and practice. We all believe that this equity model will attract a lot more people. And if that happens, our growth journey will continue, and in the next five years, I hope that we will be growing significantly.
As a firm, we always say, “Let’s be Human”. Keep the human part alive. We don’t want to be just a business platform. People, to me, is the most important thing. If you get that right, the money will happen, the business will grow. Everything else is the by-product of how happy people are in the organization. I think that’s the most important thing. So, I think we should be able to grow.
PS: How do you think big law firms perceive firms like yours that are rising at such a good pace?
KD: Why don’t you ask the big law firms that question?
So, in terms of big law firms, as I said, the landscape is changing. During COVID-19, the big law firms became bigger. I think there is enough work in the market today where they won’t feel threatened in any way. Earlier, there were the Top 3, Top 5...Now you have larger law firms that may not be in the Top 5, but the sixth and seventh, and are very large. This is very similar to the international market. You have massive firms who are not even in the Top 10. You could be ranked 15th, but still have three thousand people and five hundred partners.
I think there is enough that India has to offer. The next decade belongs to this country, without doubt. You see it happening in our industry, the law firm industry, the way it’s going.
So, I would probably see a lot more law firms becoming bigger. The challenge would obviously be for the smaller firms, whether they would merge or how they can ensure their survival. We’ve been lucky because we came in just 2009, and then we caught on to that growth.
One thing’s for sure, in terms of partner movements like we see in the Big Four (accounting companies), we’ve started seeing those in law firms.
PS: What do you think will be the top three legal trends for the next two years?
KD: First, I think salaries will keep on being pushed because of how the economy is growing, the regulations coming in and law being a necessary advice in almost all spheres of life. So good news for all the youngsters who will join.
Subject to correction, I don’t think Artificial Intelligence (AI) will become a substitute in the next two or three years.
Everyone will look at talent, and talent not only at Partner level, but talent right at the fresher level. For a firm to actually deliver, you don’t only need the Partner to be good. You need the Partner, the Principal Associate, the Senior Associate, even the fresher to be good. Even the fresher needs to be able to impress the people they’re working with. That means the demand for good, intelligent talent will be more.
Secondly, I think there will be a lot more big Partner and team movements. We set the trend this year. We’ve never seen such big movements together in a span of one year. I believe this is going to happen a lot more. For two reasons - one is the entrepreneurship platform. Money is going to be a big factor driving that. And the second is the ability to create and build more.
Third, you will probably see some more consolidation. You will see bigger firms emerging out of consolidation.
PS: Before entering the law firm space, you were a litigating lawyer and an in-house counsel. Which role was your least favourite?
KD: I know if I say “none”, that’s an answer you don’t want to hear. Because I genuinely love all. I am passionate about litigation, so if I get a chance, I would like to go and argue in court. It’s unfair to say that any one of the roles was my least favourite. I’ll share an anecdote.
There was a time when I was in ICICI Limited. To me, that was a phenomenal learning experience. But there was a time when I was running around with liquidators and court receivers, enforcing assets all over the country - somewhere in Haryana, somewhere in Tamil Nadu. I hated that. I asked my senior, “What am I doing? I am here as a lawyer. What are you making me do?”
He told me, “One day, what you’re learning with this, will come to use.”
In today’s world of Insolvency and Bankruptcy Code (IBC) and restructuring - this is one practice area where we’ve actually been right up there - it has come to use.
I love law as a whole, but sometimes you do get bogged down when managing a firm.
PS: To end on a lighter note, if you could pick one Indian lawyer - past or present - to work with you at Argus, who would it be?
KD: I would say, 'Hey listen! All the partners in the other law firms, come back and join here. We’re creating something which is going to be interesting, we’re creating something in which you’ll be an owner and all of us will take this to the next level.'
I have worked with a lot of seniors, and I would like them to come in. There are some brilliant people in the industry.
But I’ve had a lot of academic discussions on governance with Umakanth Varottil. It’s such a blissful break, speaking with him. Sometimes, when I go to Singapore, we discuss governance. It’s so academic, so enriching. Sometimes, I would just hear his viewpoints. He is someone that I would love to have worked with on some project because it’s just extremely interesting to work with him.