Nishant Parikh and Sridhar Gorthi on 25 years of Trilegal: Growth, entrepreneurial partners and international plans

Trilegal recently celebrated its 25th anniversary. Set up in 2000 by six founders, the firm has grown to 150 Partners and 1,100+ lawyers.

Recently, one of the founders Akshay Jaitly also released a book on the firm called Trilegal - The Making of a Modern Indian Law Firm, disclosing how the firm quadrupled its revenue in the last five years.

In this interview with Bar & Bench's Pallavi Saluja, Trilegal Partners Sridhar Gorthi and Nishant Parikh speak about the early years of the firm, how it grew, aggressive lateral hiring, entry of foreign law firms and much more.

[Watch Interview]

Edited excerpts follow.

Pallavi Saluja (PS): Trilegal is celebrating its 25th anniversary. What would you say have been the main factors responsible for its rise among the top 6 firms in India?

Nishant Parikh: One is just the values that we live every day...These are the values of professionalism, of respect, of keeping the firm before self and integrity...it puts you on a path; a slightly narrow path but a straight path to progress.

Two, I think it is just what we are, what's in our DNA. We are a firm of 150 partners today and we say it is a firm of 150 entrepreneurs. The firm has provided a great environment for professionals to become the best versions of themselves and when you give professionals that space, you turn them into great entrepreneurs as well. It is not a firm where client relationships are concentrated in a few hands; it's a firm where we all collaborate and do the best that we can for clients.

Sridhar Gorthi: Essentially, we did what we said we were going to do. We said we are going to build a modern, progressive, international organisation - a meritocratic, transparent, partner-owned, partner-led organisation - and we did that and we continue to do that even as the scale has magnified beyond everybody's imagination. Just standing by the original idea and continuing to invest in that original idea is what has brought the firm here.

PS: What were the challenges you faced initially? All six of you come from different law firms and cities. How would you resolve conflict in the early years, before the formation of a Board and Management Committee?

Gorthi: In the initial days, when we were building trust, all decisions were taken by all of us talking together all the time. What helped was that we all had similar backgrounds: we were not coming from long-pedigreed legal backgrounds as such, but rather from similar experiences and, most importantly, a similar vision. We all had the same vision that we are going to create something different, something that does not exist in the Indian legal profession, which is the Trilegal you see today.

That vision was there from day one. We came upon the ways of doing this, like our all-equity lockstep...And like attracts like; we attracted professionals like Nishant and various other legal professionals who at that time obviously had choices of going to much bigger firms. But they came to us because they were attracted by this vision.

In the early days, the key thing was we had to keep channels of communication open at all times. We agreed that whether it is accounting or taxation, we will be whiter than white so that we can at all times freely share our numbers and information with anybody who asks. So this was again at the heart of it, because from three cities, we all had to trust each other and the only way that happens is through complete transparency.

I am not going to say that there were no hiccups; obviously there were. There were fights, there were tantrums, but through that, our common values kind of held us together and, very importantly, we started seeing the success of what we had started to do. When really good quality professionals from the top law schools of the country start choosing a small 4-5 year old firm to call their home to build their careers, you realise that you owe all of these people, you have an obligation to them, to make this dream come true.

PS: Any major setback that you want to talk about?

Gorthi: Three of our initial partners from our first set of partners left and, of course, did very well. Phoenix Legal are doing extremely well and they were close friends. That was a big setback for us when they left - both emotionally and professionally. We hadn't got our model absolutely right and perhaps that incident was the catalyst for us to think of creating this all-equity lockstep that we have today. In a way, we look back and say that was cathartic for the organisation to grow to the next level...

PS: Was there a turning point for the firm?

Parikh: Fundamentally, there are three or four aspects that stand out when you compare us to others in the Indian landscape. One is democracy, the second one is transparency and the third one is wide ownership. As we went along, we found the right opportunities at the right time to build these ideas into our structure and the way we do things.

When you look at democracy and the fact that the management in this firm is elected, that was an idea that was put in place 15 years ago, when the first management committee was put in place...We wanted to build an institution that outlasts all of us...

Gorthi: To add to that, getting into the relationship with Allen & Overy for that brief period allowed us access to international best practices, to systems and processes that had been thought through and built by a much larger organisation - that was extremely helpful. Getting out of that relationship at the right time was also a turning point for the firm, because we chose independence at that time as we kept growing and our aspirations did not match theirs anymore.

The pandemic was a turning point because right before that, we had our election and again proof of what we said we would do when Nishant came into management...

...we were able to unleash the compounding effect of all the things that we had done for 20 years. And from 20 to 25, you have seen the kind of growth that we have enjoyed...

PS: Lateral hiring has grown exponentially in the last 10 years. What do you think attracts partners from other law firms to Trilegal?

Parikh: Back in 2020, there was a desire to become a truly full-service firm and to serve clients in many different ways. There was also a desire to grow at a faster pace than we had grown in the past. When we looked around the competitive landscape, we felt that there were a few things that we could do differently. Much of this perhaps led to us taking strategic calls on laterals...what attracted them to us in those initial days was just the fact that we were offering a platform which could give them the freedom to build the practices that they wanted to build. When I say freedom, it's the right amount of autonomy with the right amount of accountability. It basically meant that professionals who joined us had the ability to go out and to market themselves and promote themselves in the way that they wanted. They had the ability to even take strategic calls on pricing for instance...

Gorthi: We know we have autonomy, we know we have transparency but once you had a few laterals coming in and they became brand ambassadors - going out there in the market and saying this is actually how things work over here - that added a lot to the credibility of our model...

PS: How do you manage cultural assimilation within the firm?

Gorthi: ...Not to say that this cultural assimilation happens seamlessly all the time. There are some people who have had expectation mismatches. It's going to happen, but we get it right much more often than we don't.

Every lateral partner goes through a vote. The partnership has been very generous in its support to the management and the board in terms of bringing in new partners. We know that on the odd occasion, it may not happen. But the fact is that universally people prefer this trust-autonomy-accountability model rather than the command-and-control-oversight model that other firms seem to prefer. Who would not like to, as a senior professional, have the dignity of having their autonomy? Not having to ask anybody what your next move should be or whether you can spend this money or not, but being trusted to do the right thing...

...Even the financial model is aligned for collective success. It's one balance sheet - everybody shares from the same balance sheet. If my fellow partner is doing very well, that benefits me as well.

PS: Considering the aggressive lateral hiring, has organic promotion to the partner level kept pace? This year, there have only been two partner promotions.

Parikh: If you were to look at the numbers, we were roughly 50 partners in 2020. In the last five-and-a-half years, we've added 100 partners. Out of these 100 partners, around 55 are lateral, but 45 are homegrown. They've been promoted in this firm. So, if you compare organic and inorganic growth, the growth is pretty much balanced...But let's remember that we're a full equity model in a market where I think most of our competitors have a two-tiered partnership. We want to make sure that only the best make it. So the standards and the expectations are perhaps higher.

There's absolutely no capacity constraints. If we had a cohort of 15 great partners, we'd be very happy to have them join the partnership.

Gorthi: In fact, the lateral partners, by increasing the size of the business, increase the opportunity set even for our internal promotions. This is a fact now well understood - that laterals are not taking the place of organic. In fact, it's the opposite, because you have a larger opportunity set, you have a larger set of clients that you could potentially mine from those new sets of clients, and that creates more space for young partners to come up.

PS: On the other side of the coin, how does a firm like Trilegal deal with attrition?

Parikh: So I think at the partner level, we've had very, very few exits. I would say in the last five to six years, while we have added 100 partners, we would have lost 4-5 partners. We do see higher levels of attrition at the associate levels, but in recent years, through some concerted effort, the attrition levels have come down. We would like them to come down even further. I would say that we've made a few efforts towards making sure that we're a more accommodating firm, that we're flexible in terms of working from home or work from office.

Even a few progressive steps that we've taken on mental wellness and making sure that people feel supported through all the stress that they take as lawyers have helped us a great deal to bring down the attrition numbers. It's always a work in progress.

Gorthi: Right after the pandemic, as with everybody else, there was the great resignation. So, the attrition numbers did shoot up. But right now, with all these initiatives that Nishant is mentioning, we are well below international standards for attrition in law firms. In a high-quality, high-performance organisation, some amount of attrition is going to happen as people realise that this perhaps is not for them, or maybe we feel that they're better suited elsewhere. Some amount will always be there, but as long as we are below international standards, we're happy with that.

PS: We have seen quite a few Counsel leave the firm since they didn't make partner at the firm.

Gorthi: We don't have a salary partner model. So our Counsel are salaried partners in any other organisation. Maybe some of them, I wouldn't say all of them, don't make it; that's not entirely correct. But some people feel that perhaps it's too much of a bar for them, or perhaps these expectations that we have from equity partners to be entrepreneurs from day one. There are some Counsel who honestly tell us that they prefer to execute and don't want administrative or business responsibilities that come with equity partnership.

Parikh: I feel happy that our Counsel are so good that they can become partners in our competitor firms. Again, I'd like to say it's not due to any incapacity on our end. It's just that the bar is high. As Sridhar mentioned, it's really not about people being unable to make it. Sometimes it's really about what they want out of their careers. The path we offer is that of an equity partner with a great deal of responsibility.

PS: What are your thoughts on the opening up of the Indian legal market and the Bar Council of India Rules governing the same?

Parikh: The market is large enough to accommodate more competitors. Our only wish is that law firms stop competing on price and start competing on quality and the things that matter. Having said that, I feel we are extremely well-poised as a firm to take on any amount of competition that comes in...

Gorthi: This is not a static regulatory market. You need nuanced expertise in a wide variety of practice areas. So any of our competitors that either don't have them - or as foreign law firms are concerned, are not allowed to have them - will not be able to do that full spectrum of work that the top end of the deal market requires. The only thing we ask for is clarity. What are foreign law firms allowed to do? What are they not allowed to do? What is the phased periodicity of when they will be allowed to do? We just need to understand what is the playing field.

Number two, we do ask for some amount of leveling of the field as well. Whether it is LLPs, whether it is clarity on what can and cannot be on the website, who can and cannot be a partner. International law firms have much more flexibility on this. So if we are competing with them, we would need similar kinds of flexibility. This is, I think, quite rational and a straightforward ask. Other than that, we personally feel that the entrant of more sophisticated players in our market will raise the maturity of the market overall. If you look at any international jurisdiction which has a strong domestic consumption story - the top law firms are local firms. We are well positioned to be that firm. I think the market will grow. It will be for the benefit of everybody.

PS: Trilegal had a relationship with A&O for a few years in the hope that the legal market would open up and then the relationship was ended. Now that the market is open, are there any plans to tie up with foreign law firms?

Parikh: We would like to keep all our options open. Having said that, we are a very large firm today and there is a great deal of confidence that we can do this by ourselves without aligning with anybody. Even if you look at the international experience, there are so many markets which were opened up for international firms, which still have international firms doing very well. But it is the local firms who are the largest firms in those markets and who are doing exceedingly well...this is really not the time to decide.

Gorthi: Having said that, we cannot think of an international firm that will want 1,100 lawyers in India. The other thing is, how are we gearing ourselves for that? It is the same thing. We just make ourselves stronger, more relevant to clients, more full service, have depth and width of practices, because we know there will be areas where they cannot compete with us. So we have to be very strong in regulatory litigation - that is good for the firm regardless of whether the market opens or not.

PS: The Cyril Shroff Committee report to BCI recommends allowing private equity investment in Indian law firms. What are your thoughts on that?

Parikh: I think it is very progressive. To be honest, we do not fully understand what having an external shareholder does to a professional services firm. Even the experience on this globally will not give you too much information or insight. Having said that, I feel it is extremely progressive and it is certainly an idea worth exploring.

Gorthi: We like the recommendations in the report. I think they are quite aligned with what we also want to see happen. The private equity idea was definitely a new one. We did not see that coming. I do not know how the regulatory environment in India, which is very far away from even allowing us to sort of have proper websites, is going to look at this kind of an idea.

PS: How will AI change the way law firms work? How are you preparing for it?

Parikh: We feel that the entire industry is very much at a nascent stage when it comes to using AI and getting the best out of it. We're at a stage of evolution where AI is helping lawyers become more efficient at certain things, especially certain kinds of due diligence. So, it is definitely bringing some efficiency to the table. AI itself is so powerful and if we keep working on it, it can at some stage of its evolution add value to clients, but that's still some time away. It will require lawyers and law firms to continuously work with AI. As you know, AI is as good as you train it to be. Early results show that it's taking the drudgery out of lawyers' lives, and that's what we're focused on.

Gorthi: Our lawyers receive regular training, whether it is prompt training or use case familiarisation. So, we have a strong AI training program as well for our lawyers.

PS: Do you see any demand from clients in terms of costing/billing with the use of AI?

Parikh: Clients are definitely interested in how we are using the technology today. We've been able to give them a great deal of comfort on 100% confidentiality. We've put all the right barriers in place to make sure that client confidential information does not move out of our servers. The second thing is we've put in place an AI use policy, which ensures that any AI output is checked and verified by the lawyer using it.

Not a single client has asked us to become more efficient on fees, honestly, because they know that the use cases for AI today are to help us become efficient in areas where we don't get paid that much to start with. Clients are not fussed about how we are delivering that value and whether we're reducing our losses or increasing our profits.

PS: Do you plan to go international?

Gorthi: Certainly. I guess for us, that is the next stage of evolution. Having said that, when we go international and when we set up a presence in another country, we would like it to be an extremely meaningful presence...If we set up an office at a location, we would like to serve local clients...Therefore, that is certainly an idea that we are considering quite actively...We would really need a strong strategic reason to be in a particular geography where we feel we can add value without necessarily competing with the local firms there. We keep ideating on this, but as Nishant earlier said, there is so much left to do in our country. It is still an underserved market, we feel. So right now, our primary focus continues to be just doing what we do, doing it better every day.

PS: Where would you like to see Trilegal in the next 10-15 years?

Parikh: We discuss that quite often. I feel given where we are today, the possibilities are immense. We would definitely like to be a firm which is in one or two international markets. We would like to be seen more as an Asian player rather than being just an Indian player. There's also a desire to be in the top 10 in Asia, and not just in India. I do feel that we have what I call the best team of partners who can help us get there.

Gorthi: Right now, one thing is for sure - we have our hands full, we have to consolidate from where we are. India remains a very underserved market. If you look at any of our Asian competitors, the size of law firms over there, we are not comparable. In a country that has such complex regulatory environment and rule of law, typically there should have been a much larger base of big law firms. So we think there's a lot of headroom to grow. In the short term, that's where our focus is going to be for sure.