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Shardul Shroff, Managing Partner, Amarchand Mangaldas, comes from a family of lawyers and the 93 year Shardul Shroff old firm is the most sought after firm today. In this interview with Bar & Bench, he talks about his transition from Mumbai to Delhi, completing three decades in Delhi, and his interests in astrology and art.
Bar & Bench: The Early Years
Shardul Shroff: When I look back to 1980, I had registered as a lawyer only on July 1st. Barely a month later, on 6th August, 1980 Mr. Indravadan Shroff, the sole proprietor of Shroff & Co. died in Delhi. We had a lot of common clients in the banking sector and financial institutions. He had some prestigious clients like RBI and SBI. Since he was a sole proprietor there was no succession and my parents therefore, proposed an asset acquisition of Shroff & Co. together with its staff on a continuity of employment basis.
At that time we were a small firm in Mumbai comprised of about 30 lawyers. Pallavi my wife and my brother Cyril were not qualified as lawyers at that time. They were both studying the law. Pallavi passed out in 1981and Cyril passed out from the law college in 1984. My father was running the firm as a sole proprietary and my mother was assisting him.
It was a big leap of faith for my father to say, “Go run a branch,” when I was just 2 months old at the Bar. My father had the vision to look at this, as a Blue Ocean Strategy. He felt this was an unexplored territory and that I needed to go out and experiment. Since there were a lot of common clients, my father felt it was an opportunity where we could benefit from servicing them at two locations, instead of one and further strengthening our relationship with them.
The practice in Delhi was essentially focused on litigation in the Supreme Court, High Court, Tribunals, which was different from the practice in Mumbai. Mumbai’s practice was predominantly corporate contracts, documentation and finance as we were a boutique financial service firm. At that point of time, I was more attuned to general corporate work, transactional work and banking transactions, and I had never appeared as an arguing counsel in any Court. For me Court practice was a totally different experience from what I was used to in Mumbai.
My office experience in the firm was unlike any other lawyers of today’s times, I had started attending work right out of school, as a 15 year old and was trained to do every aspect of the firm’s functioning, whether it was billing, being cahier, library management, telephone operatorship, file management or any job required in a law firm. By the time I was a lawyer at 23, I had already put in 8 years work in my office. I used to finish Sydenham College of Commerce at 1.30 p.m. and head straight to the office for working with my parents. This continued even in Government Law College, where I attended morning college and used to be free by 10.15 a.m. I used to work on various aspects and was apprenticing with my father, watching his approach towards clients meetings, his counselling style, his administrative style and the way he dealt with people. I was trained on administration from being a telephone operator to library maintenance as I mentioned above, and I used to go to court with other lawyers of the firm for watching how court matters were conducted.
So I had received 7 to 8 years of grounding in office administration, management and law practice, before I came to Delhi. I think that was the real strength for me, otherwise I don’t think even with all the bravado I came up with, I doubt I would have come to Delhi on my own without that background. Also, without that experience I don’t think my father would have ever ventured to send a 2 month old lawyer to Delhi.
It was an opportunistic and visionary shift. It was both the Blue Ocean story and the defensive strategy at the same time. That’s the real thought behind coming to Delhi and this gave us 15 years head start ahead of the pack. There was no firm from Delhi or Mumbai, which created the Mumbai-Delhi axis in 1980. Everybody who started thinking of Delhi was doing referrals, and no law firm had a branch in Delhi. It was tough baptism for the initial 3-4 years. Youngster today rarely witnesses all of this. They walk into established practices, whereas we had to create one.
Bar & Bench: On Amarchand Mangaldas – Transformation from family firm to family controlled firm
Shardul Shroff: My father passed away on October 13, 1994. Since he died suddenly, we were in a state of shock but all three of us i.e. my mother, brother and I had been instructed by him at all times “you will not stop work even for a day”. My mother as a young widow, attended the office on Monday, the 16th of October, 1994 notwithstanding our recent bereavement. She attended work, dealt with clients and faced it all, she didn’t sit at home and cry. That is the culture and strength on which we stand. My father was a huge personality in the field of law and he was a great lawyer. My mother emulated his greatness by going to work on 16thof October. She stood by us in every single decision we took after my father’s death and during those difficult times. Both my mother and father are great people, the second generation of the firm, who defined the firm as it is today. They are certainly not ordinary people and persons who know them recognise this.
In 1995 we reconstituted the firm and for the first time we had third party Partners. The Bharuchas came in as Partners of the firm. Ritu Bhalla, Sharad Mathkar and subsequently Ajoy Roy were made partners of the firm as fixed share partners, as they were the oldest serving lawyers in the firm. So we had five Shroff’s, two Bharuchas and three others, comprising the firm’s partnership from 1995 – 1999. We ceased to be a family firm in 1995 with the induction of outsiders.
Today there are the five senior Shroffs in the partnership out of 50 partners and there are 9 Shroffs in the total of 470 lawyers that the firm engages in.
The family firm transformed into a family controlled firm where third party members had a say and this transformation is continuing even today. When we look at the history as to who helped create the capital for the firm, we can proudly say that the family reinvested its savings and ploughed back its profits into the firm to aid the growth of the firm. Timely investments into expansions and new premises by the Shroff family aided its growth from 30 people to 65 people and so on and so forth to its current strength of 470 lawyers. This is the vision and entrepreneurship that the family contributed.
Today, we are what we are because of our continuous investments in infrastructure and equipment and technology. We have created every single ingredient for growth ahead of time. We have not built up our personal wealth. We have sacrificed it to the growth of the firm. We see ourselves as trustees for the future generation. We believe in the Tata Sons and the Readers’ Digest model “that each one of us is here for a limited time. We contribute money, we act as trustees for the future and we exit at our historical costs”.
We have therefore, never bothered to value our true networth. I would not be surprised if it is in the region of Rs.1,000 to Rs.1,500 crores concerning the real estate alone. When we induct a partner, we do not charge a percentage of our networth or our current value. This is unique.
We have done this as an entry strategy for younger partners as we feel that it is right and in the interest of young talent to encourage people and to create sound management rules. We know that in the current legal market there are very few Indian firms which have invested in fixed capital of the firm. They are only operating on working capital or current capital. Unlike them, as true professional entrepreneurs we credit 10% of our annual earnings into the capital of the firm. This is what distinguishes us from ordinary families, which would take their wealth home. Quite to the contrary we have believed in institution building and we have given the vision, dimension and direction of what we want to do. We have demonstrated this vision since the last 15 years and our growth from 60 – 65 lawyers in 1999, our transformational exercise in 1999- 2000 with Boston Consulting Group for transformational change and our implementation thereof over one decade has shown us to be professional entrepreneurs considering that we are now 470 lawyers and we employ another 200 – 300 persons. It is not easy to be responsible for 800 people as an entrepreneurial family in a professional services sector. If we would have behaved like a family concern only, we would have been small in content and with a small size and not become the kind of institution that we have created and nurtured.
Bar & Bench: Keeping yourself motivated
Shardul Shroff: Motivation is a delicate issue. Sometimes you do run out of the zest to carry on. You do ask yourself the reason why you are at it. I ask myself this question every two months to recalibrate my response and to find the answers as to why I am doing this and for whom and what am I doing this. I do find my answers and that is why I continue applying myself to the growth story of Amarchand Mangaldas. The day I don’t find satisfactory answers, the day my colleagues stop sufficiently incentivising me and motivating me to something bigger and better, I will stop. So far I have always found a positive answer and a continuous change required of me. There is always something which inspires me, something in the people, something in the technology, something in the law, something in the growth phenomenon, something in the planning, which has challenged me, that is why I have been at it for 30 years and will probably do it for another 10 – 15 years. Then the next generation of leaders in the firm will take care of the future direction and growth. I will keep at it till I enjoy it.
Growing is a function dependent upon the enjoyment of the aspiration of growth. There is an always a challenge to growth. It is never easy to manage a firm with 470 lawyers and which employs in the aggregate 800 + people. It means the firm’s two regional managing partners are responsible for 800 families and their livelihood and their continued employment. It is a tremendous responsibility which humbles us and simultaneous keeps us going.
As an Indian firm we have our own culture and it is not so much personal goals or personal growth alone which motivates us. It is the collective goal and institutional building, which has motivated us so far. Firms face challenges everywhere. I am energised by the example of Dilhan Sandrasegra, Managing Partner of Wong Partnership, one of the best firms in Singapore, who has left them and joined Temasek. It is an outstanding achievement that Rachel Eng has stepped into his shoes and the firm keeps on. This is every managing partner’s dream. These are rare virtues of partnerships and the pluses that one looks for when one keeps going. I care for our people as if they are my extended family. Therefore, I believe in the credo “we run the firm as if it were a family”. I don’t need to that as I can be very professional, cut, dry and curt, but I get involved in people’s life whenever they fall sick or need medical attention or need financial loans or when it’s their birthday. I extend myself and engage in all that. No professional service firm does that. These are things beyond the call of professional duty. The firm has never lost its heart or its ability to care and that defines the firm.
Bar & Bench: Decision making and delegation of responsibilities
Shardul Shroff: As mentioned above, the firm Amarchand Mangaldas is professional in its decision making and execution. Since the inception of my practice, I have always believed in giving people their space to function. I have, since 1991 chosen the area of transactional lawyering and M&A. I do not micro manage my departments or heads of departments, who are entrusted leadership and the ability to define their departmental functioning. We have 35 leaders, as of date, in the Delhi Region and they are running different departments, which have different dates of birth, growth or inception at the firm. Such persons may be senior people, who run the department at the age of 40 or 50 years and there are others who are running these departments at the age of between 30 and 35. The core management and entrepreneurs of the firm have left this team management to such leaders and they are the masters of their teams. They take decision on a business plan, they prepare their agendas and schedules and run their departments professionally. I am responsible for the overall business plan and to keep the larger picture in focus.
That is why we are very comfortable and professional because once you have given the freedom, they are responsible enough to respect their freedom and grow it. The culture is well spread. This is how the firm has grown. The firm has not grown because Mr. Shardul Shroff, Mrs. Pallavi Shroff, Mr. Cyril Shroff or Mrs. Vandana Shroff micro-manage the day to day affairs of the firm. Sorry, we can’t manage 470 people in a day. You can’t see more than 15 people in a day, how will you run a firm of 470 lawyers! Some decisions are purely managerial in nature and some are practice related. The practice decisions are left to the practice leaders. I do not interfere in every practice decision, its humanly impossible. The answer lies in giving autonomy to people, their space, the ability to be leaders and in empowering them.
Bar & Bench: Integration of different offices
Shardul Shroff: Amarchand is an integrated practice and each Amarchand firm is co-dependent on each other. That’s where my and Cyril’s role comes in as Managing Partners. We are binding all the teams and we are keeping them sewn and growing and giving them the resources when they need. We are giving them the people they need, if somebody leaves we give them a replacement.
The management of the firm is not only run by lawyers, the firm is run by very highly qualified professional people. That’s why the total number of people is 800 and not just 470 lawyers. The rest of the 330 are the administrators, the staff, the secretaries, peons. These 330 people are also the backbone of the firm. You can’t run a firm purely on lawyers, you surely need a support system. This is an element of professionalism, in pursuit of excellence. We do not pursue excellence only in the practice of law, but we have also followed it in the excellence of the service of law. So ours is a holistic program.
Bar & Bench: Entry of foreign firms and the road ahead
Shardul Shroff: There are many more challenges which we will face, challenges of technology, challenges of commoditising the law, etc. Challenges in relation to a shrinking world, a world where the client is very cost-conscious and sees the hourly billing concept as anathema. We keep innovating and keep thinking our strategies. It’s an evolutionary process.
Whether the foreign law firms come to India or not, we are not going to stop our thinking, we are not going to stop growing. Regarding foreign law firms, let them come, but in a regulated manner. Today you do not have any rules of the game, you do not have a level playing field.
Justice Raveendran of the Supreme Court of India, on Teachers’ Day spoke beautifully on this. He said,, “there is a need to relook into the Code of Ethics in 5 dimensions”. You need to look at it as a litigator, as a corporate law firm, as a KPO, as an LPO and from the perspective of an MNC law firm. These are all not in the same bracket. Each of them is a unique space of practice of the law and they need to have separate disciplinary rules and codes of conduct. They need to have controls and regulations and we don’t have anything. So when we speak of opening out, there is a lot of work we need to do. Today a KPO or an LPO can advertise, it can do a cold call, can do marketing, it can create capital, can create loans, whereas a law firm can’t and nor an individual practitioner. So are we all equal? We have a single code of ethics which is dealing with all these situations in the same breath, which is wrong.” That’s the kind of growth the Indian law needs today, comprising of innovation and new techniques. We can’t just be told to open our legal markets. There are several grey areas: 20 member partner limit is still continuing, whether LLP rules are applicable to Indian law firms are still not known, can a lawyer have limited liability, etc.
As an Indian lawyer, you cannot have a website, you cannot have a brochure, but as a foreign law firm sitting in Palo Alto or NYC one can say, “I’m outside your jurisdiction so I can do it”. Where is the framework and the enforcement for these?
It’s only the serious players, those who have a reputation to maintain and who are not fly by nighters who follow the rules. More than 50% do not follow the Codes applicable to them. So where is the level playing field? You need to set all these principles in place and have a strong regulatory framework. Let’s assume an MNC firm is allowed. Will it be governed by home jurisdiction where the lawyers are registered, or in India? Where is the reciprocity of judgments and enforceability with US, Japan, Europe? We have only 19 countries where there is reciprocity. Create a basis where you are not skewing the game for the home market. You can’t do this in their territory, they have been smart enough and have protected themselves. They have created their walls, and we don’t even have fences.
There is nothing preventing suitcase lawyering today by foreign lawyers. They have been doing it for 30 years. Now they want proximity to the market and that’s what’s being opposed.
Nobody is actually preventing foreign lawyers from coming into India. I know hundreds of foreign lawyers who come in and go out daily. It’s a canard which is being spread because our regulators and legislators have not learnt and implemented what it takes to protect a profession, in a valid way and not restrictive way, I’m not for restriction. I’m saying, make the rules right along with a level playing field. Let everybody get the same benefits.
A Clifford Chance has a GBP 100 million line credit, which is nearly 700 – 800 crores. Tell me of one firm in India which has a Rs.700 crore liquid cash credit facility available to it. Where is the level playing field, where is the treatment from bankers treating us at par with Clifford Chance? This is what needs to be debated, but unfortunately the debate has not progressed.
Bar & Bench: Managing high-profile clients
Shardul Shroff: The best clientele has been with the firm because of a multitude of factors, such as innovativeness, the sheer quality of the mind, our hard work and attention to detail and that we have, as leaders, been exceptional lawyers ourselves. We have built our practice on trust and ethical values. There is no shortcut to life. We have believed in our virtues and values and we have practiced them and that is what has made us, what we are today.
In one sentence I can say, it’s the way we have lived our life. All factors of hard work, trust, problem solving approach, our ethical values, have made the brand Amarchand Mangaldas. This brand is bigger than either Cyril Shroff or Shardul Shroff or Pallavi Shroff. The brand is much bigger than any individual in the firm and we realise it when we go out into the legal market. So the vision is to keep the value of the brand intact and flying high. This is a national brand and we have an image. We have a goal to be the national, independent law firm of India.
This is why we are growing. It’s not easy to grow from 300 to 400 or 500. It’s a huge stress factor on each of the family members, but we want to be that national, biggest, brightest, best independent firm which stands for quality and values. These are the things that are driving us and that’s why we are doing it because it’s our vision for the future.
Bar & Bench: How do you unwind?
Shardul Shroff: To unwind, I listen to music. I pray and listen to religious music at the beginning of my day. I love art. I go to art exhibitions. I buy art and also buy good jewellery. I am extremely fond of reading. I write poetry and have now a sizeable collection of my own poems, which I shall publish someday, may be in this 30th year. Jewellery is a hobby which I share with my wife and mother as all three of us are fond of good jewellery. Aesthetic items, whether they may be art, jewellery or sculpture, help me unwind. I like the appreciation of things, which are good and pleasing to one’s eyes or ears. I also enjoy watching movies (excluding horror or melodrama) as it is a good way to relax. That’s how I unwind and keep going.