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Bar & Bench speaks with Talwar, Thakore & Associates Partners Feroz Dubash, Kunal Thakore and Sonali Mahapatra. In this interview, the three talk about the initial years of the firm, the existing relationship with Linklaters, the firm’s structure, successions plan and their thoughts on the opening up of Indian legal market.
Bar & Bench: Feroz, you have been with firm the since its inception. Tell us about the initial years of the firm.
Feroz Dubash: Both Suresh Talwar and Shobhan Thakore were coincidently retiring from their existing firms and looking to set up something new. They had worked extensively with international firms, including with Linklaters and there was a sense that both of them wanted to set up something that offered a different style of working in the Indian market. So, with that in mind we set up Talwar Thakore & Associates in 2007 with a very small team of six lawyers in total and gradually grew over the next couple of years. The very first deal on the very first day was the Vodafone-Hutch acquisition!
Since then the focus has been on building our reputation for quality across our practice areas and slow but steady growth (we are now at three partners and 23 lawyers across Bombay and Delhi including our joint competition practice with Vinod Dhall) despite the markets’ ups and downs.
B&B: All three of you are from Linklaters. Both Shobhan and Suresh have previously worked extensively with Linklaters. Would you call TT&A an offshoot of Linklaters? What is the relationship between the two?
Kunal Thakore: I think it is a unique relationship. Easy to describe but at some levels quite hard to explain. As its simplest, it is a best friends relationship in terms of the fact that we work with each other as much as possible. We refer work to each other unless we know there is a conflict and share best practices and know-how. But it is harder to explain the shared culture, mindset and ethos in terms of our internal organization and approach to clients and work.
Feroz: One of the big selling points for us with associates and clients is we operate with the same emphasis on transparent management, training, the same thought process and focus on quality as at Linklaters. This is something that both our associates and our clients see and appreciate.
B&B: The majority of best friends relationships haven’t worked out. This one, though, does not seem to be facing any problems. How do you sustain such a relationship?
Kunal: On the contrary, the relationship is stronger than ever. Both Linklaters and TT&A have expectations from each other and these expectations are pretty much aligned. Other relationships involved the coming together of two firms with their own (long) histories and cultures, with their own expectations in terms of profitability and their own historic management structures. So you can see where tension may have occurred. Here, we don’t have those problems simply because of the way the firm was conceived, and has grown. We are a small operation and quite deliberately so. So those kinds of aspects make it much easier.
B&B: Don’t your clients see you as a Linklaters offshoot and because of the exclusive arrangement, don’t you lose out on deals or clients?
Sonali: I would say it has worked out in the reverse on the finance side possibly because these other relationships have ended. We are getting a lot of references from other foreign law firms. Whoever is on the deal would refer to us mainly for two reasons; since they have worked with us and there is a level of comfort and they feel that we are the right guys for the job; and secondly, they don’t have the existing relationship continuing, so they don’t feel that pressure that they can’t come to TT&A. That has been our experience with the finance practice for the last one and a half to two years.
We are purely client driven. If the client wants us and “X” law firm, we are fine and if the client wants Linklaters and another Indian law firm that is fine too. Ultimately, it is the client who we are looking at.
B&B: Is there any policy to have only former Linklaters lawyers as Partners?
Kunal: No. It is just where we are in the cycle of our evolution. The senior people at the firm currently happen to have that background. There are people coming through the ranks who we think have a real shot at partnership and hopefully in a few years time, it will be different. Of course, our founders Suresh Talwar and Shobhan Thakore did not have that background.
B&B: We have not seen your firm making any lateral hires. Any particular reason?
Kunal: It is not that we have not had discussions. I think this operation is a little bit difficult for people to understand. Somebody asked – “Who takes the decisions?” and the reply was, “We take the decisions.” To which, we were asked “No, who takes the decision if you all disagree?” The concepts of “building consensus” and “agreeing to disagree” have been difficult for people to understand.
We don’t have teams at all amongst the Associates. At the junior level we encourage the Associates to do all kinds of work and with all the partners. One, because we are a small firm and second it is a useful thing that people need to do.
This is something quite alien to the way firms have grown in India where you have rigid teams and where people work only within those teams. It has been difficult for people to understand how this operates which obviously makes people nervous. It is not an issue for people who are growing up in the system or who have worked at international firms before because they know exactly what they are getting into.
Feroz: It happens regularly with associates, but partner level lateral hires are more challenging. It will almost certainly happen at some point. We just need to ensure that the culture of the firm is complemented.
B&B: How is the firm structured?
Kunal: At the Partner level, we have a basic lockstep system. There is no bonus system or additional remuneration for other things a Partner might do. In terms of decisions, we take decisions collectively. We disagree often but we get to a consensus before we do something. We build consensus in terms of how we work. We divide administrative functions like finance and marketing and HR amongst ourselves.
As far as the Associates are concerned, there are no formal teams. We have two broad practice areas: corporate and finance. Now we have the collaboration with Vinod Dhall on the competition side but the Associates will work across all practice areas. I think because of our size, every Associate does two things (like corporate and banking) even when they become senior.
Feroz: We have a very transparent Associate salary structure and assessment process. There are no hidden deals or differential payments within a band of Associates and we have a very transparent assessment process as well. We do assessments every year based on certain criteria, and we do half year follow ups.
B&B: Does a Partner enter into the lockstep straight away or is there a non-equity partnership as well?
Feroz: We currently have no salaried partners. We retain the flexibility to make up non-equity partners, but the intention is that someone who gets made up will either move directly, or very shortly, into equity. From our perspective anyone who has the partner tag is a partner in the real sense that he or she takes ownership for the firm, is credible as a partner in the market and it is not just a designation on your card.
B&B: How is the career of an Associate planned at the firm?
Feroz: You join out of law school as a first year Associate and progress year on year automatically up until you reach 6 years, when you become eligible to be a Managing Associate. This is an assessment based promotion. Once you become a Managing Associate, your next step up moves you to Partnership and that can happen within a certain number of years. We look at all our Managing Associates as potential Partners and spend time with all associates at their annual assessment discussing the career plan ahead for them.
B&B: What can you tell us about the tie up with Vinod Dhall and the plans for Delhi office?
Feroz: We are excited about this. It is a great opportunity and Vinod’s reputation and knowledge of competition law is really unparalleled. His ability to give practical advice to clients is fantastic. In terms of plans, we have shifted to the new office last year and I think the intention in the short term is to carry on as we are and see how this practice develops. It is a great opportunity for us and Vinod.
Sonali: At the moment the Delhi office houses only the competition practice which is a collaboration with Vinod Dhall. There aren’t any other practices located out of Delhi for now. That is something we will keep considering and evaluating and see how it works in terms of client demands.
B&B: Talking about clients in today’s scenario, do you see different demands from your clients related to fee structure?
Kunal: It is safe to say that there is pressure on fees. Increasingly, we are being asking to give caps and fixed fees, certainly in the finance world, which is pretty much the norm. But there is a downward trend as well despite deals getting more complicated.
On the corporate side private equity clients and even corporates want to get some indication about what the fees would be. But then there are transactions where everybody recognizes that a fixed number just does not work.
B&B: Suresh Talwar and Shobhan Thakore serve more as consultants or mentors to the firm. Was this part of the succession plan?
Kunal: I think they have better things to do with their time than deal with transactional matters on day-to-day basis! I don’t think either of them was looking to work forever. They have done this for a few years and now are in position to transition.
Sonali: They are mentors for the firm as you put it, and have been since 2012. They are there for us to draw from their experience and consult them and get them involved if and when necessary. And they are happy to do so.
B&B: TT&A is perceived as another family firm. After all, look at the surnames of the senior Partners. What do you have to say?
Sonali: As someone sitting here, I can tell you it is not a family firm. There are currently only three partners, our relationship has been forged by us being colleagues, working together over a number of years and having the same mindset. Internally it is a non-issue. It is just an external perception and that too, only amongst those who don’t know us.
Kunal: You can’t really fight this perception. You just get on with it in the knowledge that clients and associates will see what the firm is really all about.
The only way that perception goes is over time.
B&B: What is your vision for the firm? Where do you see it in next 10 years?
Sonali: I think we are in a good place. I think the initial years of setting up and bringing the firm to where it is now with clients and with our people – this has gone really well. The aim is to grow the firm, strengthen the practices, and strengthen those relationships with clients we are not looking at growing in a massive way into a huge firm with huge number of Associates. The vision is to continue to focus on quality, which is number one for us and be the ‘go to firm’ in our chosen areas, be the ‘go to practitioners’ where people trust us and approach us and building that through working with clients and building those relationships. That is how I see it.
Feroz: My vision is very similar to Sonali’s. It is to be the ‘go to firm’ and to be really at the top of the market in terms of quality and in terms of how clients look at the firm and not to grow simply for growth’s sake.
B&B: The firm is 7 years old now. Do you think the firm has grown the way it was planned to grow? Are you happy with the trajectory of the firm?
Feroz: Very happy! When I look back at what we have achieved after only 7 years, having started with only six lawyers, it is quite an achievement and the whole team has worked very hard to achieve this. The market has constantly surprised us (both good and bad) and I am sure that won’t change! There is always a feeling that there is more that we should and can be doing.
Kunal: There is a lot that we should be doing and will be doing (both externally and internally). An example of that is our collaboration with Vinod Dhall for competition law. It feels really good when we look back on the transactions we have worked on and clients we have advised; and it makes us really proud when clients say, for example, that when it comes to critical matters, they would like to get our guidance, not just from a pure legal standpoint, but a more holistic perspective. I think we have worked hard to establish a solid platform, from which to develop and grow further.
B&B: What are your thoughts on liberalization?
Feroz: My sister qualified in 1991 and worked in London and liberalization was always 2 years away and it has been since 1991! Liberalization can only be a good thing. We should not get sidetracked into what it means for litigators, because law firms don’t want to appear in courts. It has actually been pushed forward by corporates and I think everyone gets (or at least, other lawyers get) very taken up with what it means for lawyers. We should be looking at liberalization from the perspective of clients and listening to them rather than lawyers. After all, global accounting firms operate in India and accountants and clients don’t seem to have suffered.
B&B: What happens to TT&A when the market opens up?
Kunal: It depends on what the Government decides to do. Liberalization has happened in different ways in different countries. I think as a general concept, it does need to happen. The legal industry has evolved or developed in the last 10 – 12 years because of liberalization, because of the free economy.
B&B: How has the Indian legal Industry evolved?
Kunal: The industry has changed significantly in the last 10-15 years – it has certainly grown and firms have become a lot more professional in terms of client service, delivering transactions and how they look at themselves – firms are now increasingly conscious about their brand and how they deliver service. It is a developing and maturing industry.
Sonali: In terms of the legal industry generally, I think the industry will go through challenges and will need to become more and more professional. I think there are lots of people in the market who are ready to do this and are in the process of doing this.