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In this interview with Bar & Bench, V Lakshmikumaran, Founder and Managing Partner of Lakshmikumaran & Sridharan talks about his decision to practice law, the L&S journey, the liberalisation of the legal market, tribunalisation, and dealing with litigation at the grassroots level.
Bar & Bench: Why did you take up law?
V Lakshmikumaran: I spent three years with the Indian Revenue Services at Madras. Then I came to the Ministry of Finance and spent five years there. Various legislations were drafted by us, some of which were challenged in courts of law. Though it was not my portfolio, I took an extra interest in defending those cases for the government because the stakes were really high. I had the fortune of briefing giants like K Parasaran, the then Attorney-General. That’s when I got interested in lawyering. We, as government officers took decisions on the files without open discussions or arguments. So seeing that in the courts fascinated me. One day, Mr. Parasaran said, “You will be a good lawyer, why don’t you join the Bar?” I thought about it for about three days and then resigned after spending around 10 years and 10 months working for the government. I started the firm in 1985 with my brother, Sridharan.
B&B: How has the journey of L&S been so far?
V Lakshmikumaran: The journey has been interesting, taxing and stressful, but at the end of the day, delightful. It started with two people – my brother and I. We built slowly; we didn’t have a client base, since we were first-generation lawyers. I was brought up in Chennai, and when I came to Delhi, I didn’t know the language.
Initially, the clients came in trickles, then in streams, and then in floods! The one thing we learnt is that there is a joy in sharing, therefore we took more juniors, trained them and taught them. Many have become senior partners with the firm today.
Later when we found out that there were a lot more clients in Mumbai, we set up an office in Mumbai. The same thing happened in Bangalore and Chennai.
B&B: What have been your successes and failures?
V Lakshmikumaran: I wasn’t a trained lawyer from a firm to know how to run a law firm. So, everything here was done on a trial and error basis. We made mistakes, learnt from them and corrected them.
I don’t know if I should call it as a success. We are on a journey which is continuing and I believe in doing things systematically, day in day out, with the hope that something big may come. Even if it doesn’t happen, the Tapasvi enjoys the journey which, many times, is more enjoyable than the destination. All I can do is work from morning to night.
B&B: How many people work for the firm presently?
V Lakshmikumaran: We have around 300 people working across all offices. I don’t get involved with recruitments as such but of course, for lateral hires I am involved.. There is a support staff of around 150 people comprising paralegals, IT staff, secretaries etc.
B&B: Did you ever think that the firm would reach this size and level when you first started off?
V Lakshmikumaran: Certainly not. I started the firm as a tax practice. I didn’t expect so many clients to come, but they did. We rose to the occasion and solved their problems. There was no plan, there was no vision, it just happened. I can say that I’m not solely responsible for the growth of this organization.
B&B: Where do you see the firm in the next 10 years?
V Lakshmikumaran: I would like to take the firm to a much higher level, maybe reach about 500-600 lawyers. The most important thing is that I should be able to go to sleep thinking that we were able to solve the problems of our clients today. I ask myself every day, ‘Am I a better lawyer today than I was yesterday?’, ‘Did I learn something today?’ There are times when I don’t have an answer, and I don’t sleep well.
B&B: You recently set up your first international office in Geneva.
V Lakshmikumaran: We work on a lot of matters concerning anti-dumping safeguards and interpreting WTO agreements. We have been arguing cases in India, EU, Canada, Thailand and other places. But the real disputes on WTO happen in Geneva. I have no regrets that it was delayed, but I’m happy that at least it has happened now. I have posted two youngsters to Geneva and have full confidence in them.
B&B: Are there any plans to open more domestic and international offices?
V Lakshmikumaran: I may open one or two more domestic offices. I don’t have any intention of opening international offices to practise the local laws there. Geneva is different, because it is everybody’s land. But if you go to other jurisdictions, you require expertise in the local laws.
B&B: Is there a succession plan in place?
V Lakshmikumaran: There are excellent people in line. I’m sure they will continue with the organization. A managing partner cannot last forever! The seat has to be filled at some time, the system will produce the rest.
B&B: What is the structure of the partnership model at the firm?
V Lakshmikumaran: We have around 10-11 equity partners who have signed the partnership deed and are entitled to a share of the profits. There are other partners called salaried partners. In India, we have a restriction of 20 partners. We still haven’t become an LLP, so there are some constraints regarding the number of people.
B&B: What are the criteria for making partner?
V Lakshmikumaran: Basically, salaried partners are the ones who have put in 10 years of service with our firm, or with other firms. The main criterion is their ability to manage and mentor a team of at least 10 people. Above them, executive partners are those that can manage at least two partners or roughly 20 people or so. The moment they are qualified to become executive partner, if there are vacancies in the equity partnership, they may be elevated.
B&B: What are your thoughts on the liberalisation of the legal market?
V Lakshmikumaran: I have no problem with it but the Bar Council should remove some of the restrictions they have put on us. They should allow us to become LLPs and allow us to make our websites more liberal. If not advertise, we should at least be allowed to tell people what we do.
We should be given 3-4 years to come to a certain level, and then liberalisation can be allowed.
One more concern is that the strength of [international] law firms is also very big. We, on the other hand are just up and coming, we may not have that much financial clout. Of course, if your core strength is good, nobody can shake you. If that is weak, then one can find faults with the liberalisation. I am neutral about it. We don’t have to invite them today, but we don’t have to stop them forever.
B&B: What are your views on national law schools and the five-year course?
V Lakshmikumaran: The students coming out of them are excellent, energetic, and want to take responsibility. But the syllabus which is being taught in these law schools needs a lot of changes. For example, there is a big gap between what is being taught and what is required for working in a law firm or with a lawyer. Tax is a subject that is not being taught in most of the law schools, so for us it is a big challenge. We only take raw candidates with no knowledge and then conduct an induction course for about 3 months. I take classes, give them the subject matter, and then post them under different branches. I can avoid this induction course if the law schools actually have a good curriculum for tax.
B&B: Decision-making process at firm.
V Lakshmikumaran: There are different partners wholly responsible for HR, IT, infrastructure, publication etc. The more important thing is knowledge management and we have two partners exclusively for this. The challenge is to maintain the same quality of service across the country, in all the 9 offices. So, there is a constant interaction between the offices and among the lawyers at various levels. There is a continuous flow of information. Any time a lawyer is trying to argue a case anywhere in India, he is backed by the entire law firm. That’s the greatest confidence which a lawyer can have.
B&B: What is the hiring trend at the firm? Is there a particular system?
V Lakshmikumaran: We have a different model of recruitment. We have a good program for internships and lots of people apply to us; in fact we are not able to cope with their applications. The interns are attached to a particular partner, who gives them the subject matter to study along with the live cases. At the end of the internship, the intern has to make a presentation on the subject. Partners sit along with others and ask the most difficult questions. If we see that the intern handles at least 3 out of the 10 questions well, we ask him to come again and do a second internship. The same process happens again, and we get the feedback from the concerned department saying that this intern has done a good job. Then we send offer letters to these people and invariably they accept them.
We don’t go to the campus and recruit 10-15 students at a time. These internship programs help us to evaluate and then hire the people.
B&B: Recently, the Supreme Court declared the NTT Act as unconstitutional. What are your views on the judgment?
V Lakshmikumaran: It is an absolutely well-written judgment. They’ve covered the separation of powers in depth. Earlier, whenever a law had to be tested for constitutionality, they would see whether a particular article of the Constitution has been violated and whether that article is within the Basic Structure or not. For the first time, the court has said that separation of judicial, executive and legislative powers are fundamental and any law which goes against this is against the basic principle. The Indian Supreme Court has always been at the forefront of redefining and expanding the jurisprudence.
B&B: What are your views on tribunalisation, considering the state of the tribunals?
V Lakshmikumaran: Indian economy is slowly transforming from “being controlled” to “being regulated”. Thus, many sectors of the economy will come under the jurisdiction of “Regulators”. These Regulators will discharge their duties and responsibilities according to the quasi judicial procedures, i.e. following the principles of natural justice without trapping of the rigors of Civil Procedural Code, Evidence Act, etc.
– The Appeal against decisions of such Regulators should be heard by independent Tribunals.
– All the safeguards mentioned in various judgements of the Hon’ble Supreme Court need to be fully taken care of while constituting the Tribunals and appointing the Members.
– These Tribunals should be Autonomous and not under the control of concerned administrative Ministries.
These regulators and the respective Tribunals rendering orders/decisions/judgements in a transparent manner can reduce the burden on the higher Courts.
The interested parties should also know that the litigation will end in a time-bound manner. This will help increasing the investors’ confidence and India can thus become investor –friendly.
B&B: In the last 20 years you must have seen a complete change in litigation in terms of the kind of cases etc. What is your opinion on this trend?
V Lakshmikumaran: We can broadly divide the litigation that is presently going on into two groups. One is the litigation that private companies get into and the second is government litigation, which accounts for roughly 70-80% of all litigation.
The commercial dispute and public interest litigations have increased significantly over the years and the Courts are really burdened with heavy work load. To have a speedy disposal of the first kind of matters (private litigation), conciliation/arbitration and alternate dispute settlement methods need to be pursued vigorously in a professional manner.
In the other type of litigation where the Government is a party, even when the lower Courts decide the matter against the Revenue, many a times, appeals are filed routinely before the higher Courts. There has to be a check with regard to the filing of appeals before the higher Courts even on trivial matters.
In tax cases, in a recent survey, it was found that at the Commissioner’s level, 80% of the cases are decided against the assessees out of which about 80% cases are reversed by the Tribunals. If we can make the adjudicating authorities independent in deciding matters on merits without revenue bias, the workload of the Tribunal and higher Courts will come down drastically.
B&B: What are your interests outside of law?
V Lakshmikumaran: Classical music – both Hindustani and Carnatic. I’m also a marathon runner, I run for about 10-15 kilometres every other day and participate in half-marathons in India and abroad.