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Bar & Bench caught up with Richard A. Walawender and Brad B. Arbuckle, Partners at Miller Canfield to talk about the firm’s India practice.
Joining them were, Co-Director of Global Business Practice India, Gurinder J. Singh and Attorney Amita Gopinath.
Richard A. Walawender heads the firm’s Corporate Group. He is also the Director of the firm’s International Practice and Automotive Practice. Richard A. Walawender coordinates the attorneys specializing in the full range of legal issues affecting clients involved in the automotive industry. He has a wealth of experience in representing both strategic (OEM and tier suppliers) as well as private equity clients on automotive industry transactions.
Brad B. Arbuckle focuses his practice on structuring and executing business transactions and on corporate and securities matters, bringing value to a wide array of commercial transactions. His extensive experience in securities regulation, corporate financing, M&A, corporate governance, entity structuring and formation and general corporate matters, enables him to effectively advise clients on business strategies for their business affairs and operations.
Bar & Bench: Talk us through your experience in assisting Indian companies in cross border transactions?
Richard A. Walawender: In terms of working with Indian companies in the United States, we have found that it’s very useful for us to work with Indian counsel as it helps to smooth over some of the different styles that American businesses and American lawyers are used to, but maybe Indian companies are not so used to. I think that Indian companies are sort of at that exciting stage of now starting to understand in a much more sophisticated way of how businesses and how acquisitions are done in the United States, which is admittedly different than the rest of the world.
Specifically for example, if we take the concept of use of lawyers, in the US the clients look at their lawyers for not just drafting technical deals, but as advocates, advisors and counsels and as being the clients’ champion by winning the best deal they can get. Generally speaking, US companies are not afraid to use their lawyers for all these purposes and expect that from their lawyers.
A lot of times, and it’s not just the Indian companies, but when companies from emerging markets come to the US to do deals and acquisitions, they might be a little surprised that who they are talking to on the other side as it’s not necessarily the CEO or the Director of Business, but they are talking to their lawyer. So as Indian companies become more involved in the US market, they are going to understand this more, and appreciate that American lawyers are there to help them.
B&B: How big is the India legal team and do you plan to increase hiring?
Gurinder J. Singh: Presently, our India team is comprised of 6 dedicated individuals. These core members are responsible for keeping abreast of the latest legal, economic and political issues affecting our clients engaged in India related work. The India team handles referrals to local Indian law firms and also monitors the intake and staffing of work from Indian clients on a matter by matter basis. Most of the attorneys in the India team are transactional attorneys who specialize in cross-border transactions involving India; however, the India team is supported by specialized attorneys from multiple areas like litigation, tax, product liability, employment, environmental and real estate.
As far as growth is concerned, India is high on the priority list for us. Almost every deal we have handled in the past 5 years or so has had an India component. So, yes, we are planning on hiring, but not for the sake of hiring, but to supplement our team with talented individuals who will add value.
B&B: How has your experience been working alongside Indian law firms?
Richard A. Walawender: The firms that we work with or we choose to work with alongside have been spectacular. Sometimes when we are dealing with an Indian law firm on the other side of the table, we encounter varying degrees of understanding of how again the US business is being done and how it is conducted along with the role of lawyers. Sometimes it is a little more difficult, but generally speaking, we have been very happy with the firms that we have worked with.
B&B: What is your take on the Legal Process Outsourcing sector in India, with regard to outsourcing services from the US to India?
Gurinder J. Singh: With an increased pressure to reduce legal fees, I do see an opportunity for the legal process outsourcing sector in India, especially in the area of basic legal research. However, the LPOs must overcome the challenge of attracting talented attorneys and delivering a quality work product – consistently. I am personally not comfortable with outsourcing legal services to LPOs in India, because I have not yet received 100 percent comfort that the attorney-client privilege will be maintained. Our firm has not utilized LPO services to date for these reasons – we are biased to using Indian law firms. Working with law firms gives us a better chance to control the quality and really make certain that our expectations and the client’s expectations are met. I know of some companies and law firms that have started outsourcing services from the US to India and I have heard mixed reviews.
Bar & Bench: With the boom in the infrastructure sector in India, do you see more multinational companies investing in India?
Richard A. Walawender: From the markets that we serve which includes the US, Canada, Mexico – North America, the wave of investment in India is just beginning. The answer is yes.
Gurinder J. Singh: We are seeing a lot of private equity firms showing an increased interest in investing in the infrastructure space in India. In the past, these firms were generally skeptical about investing in infrastructure projects because of their inherent long-term nature. However, since the Government of India is providing more support, we will probably see more investments into the infrastructure space.
Brad B. Arbuckle: For us India is a very large market and it’s growing. The success of the Indian market lies on India developing a robust infrastructure system. The boom in the infrastructure sector in India will definitely help the growth of a multitude of industries and we expect US companies to invest in these other industries as well.
Bar & Bench: What concerns do your clients express about India? And in your experience how do you mitigate these risks?
Richard A. Walawender: The two biggest concerns are corruption and bureaucracy. We have also represented clients in other emerging markets and our clients have similar concerns there. US companies are pretty much away from corruption, and so it is a big concern for those coming into India. But again working with more sophisticated law firms allows our clients greater assurance that they can do business in places around the world and without putting the companies’ integrity at risk along with the Foreign Corrupt Practices Act, and still be very successfully profitable. Dealing with a good local Indian law firm that understands the needs of our American clients, helps. Similarly, we help our clients mitigate their concern of bureaucracy by working with a law firm in India that understands how to manoeuvre through the various permitting and approval processes.
Brad B. Arbuckle: Because some of the processes in India can take a longer amount of time than our clients are used to in the US, it helps to have a good and dedicated law firm in India that is familiar with the processes and can get the processes completed efficiently.
Bar & Bench: With your vast experience, where do you see India in 2011 – 12?
Richard A. Walawender: From the US standpoint 2011-12 is the beginning of very positive things for a couple of reasons. One is that the political relationship and strategic relationship between the US and India have never been as good as they are now and are getting more important and better. Second is the euphoria with Americans investing in China is wearing off with the period of excitement, and reality has set in the business climate of China. India is looked at more and more and sometimes as an alternative to China and more of a necessary place to establish a footprint to global business opportunities. We all see this as just the beginning or a continuation of a very rapid growth.
Amita Gopinath: Economic growth in India has been rapid over the past few years and with that the number of cross-border transactions has also increased. We expect to see an increased number of international transactions, especially outbound investments from India, over the next few years.
Bar & Bench: Foreign law firms in India? This has been a topic of hot debate and extensive litigation? Your thoughts.
Richard A. Walawender: Unlike all the other countries we have gone into like Poland, China and Mexico, they didn’t have a sophisticated legal community or one with a long tradition and that’s certainly not the case with India. India has a lot of fine lawyers and many fine law firms. It would be pretty difficult to come from foreign, and compete with the business and that’s not our goal or plan. What we want to do is to help our clients do business in India and as far as the foreseeable future is concerned, Indian firms are much more capable of providing that kind of consultation than foreign firms. But I do think there’s going to be more and more pressure put on the Government to open up those opportunities for foreign firms – I have seen the same thing happening in Eastern Europe.
Brad B. Arbuckle: I agree that India has great law firms and very capable attorneys. It is no secret that there is a lot of political pressure to open the Indian legal market to foreign firms. It might turnout into a sort of a hybrid system like China and Brazil, where foreign firms are allowed a very limited role or maybe not. We are a bit indifferent to this, because we are focussed on giving our clients the best representation they can get and that’s using the great firms that are already in existence.
Bar & Bench: Indian legal market – How do you feel that the Bar Council should equip to maintain the quality?
Amita Gopinath: Establishing educational institutions (such as the national law schools) with an emphasis on quality education, has proven to be a successful method to maintain quality in the legal profession. Also, the All India Bar Examination is a step in the right direction.
Bar & Bench: Law School education – Your thoughts on new law schools emerging in India and alumni now being hired and represented globally.
Amita Gopinath: It is a positive development of course. It has led to the establishment of a global network of India lawyers, which has been useful in the successful completion of transactions. It has also brought a better understanding of the Indian legal system to foreign law firms.