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“We had a few meetings between Zia, Bahram and me……and we did it!” – In Conversation with AZB & Partners’ co-founder, Ajay Bahl

“We had a few meetings between Zia, Bahram and me……and we did it!” – In Conversation with AZB & Partners’ co-founder, Ajay Bahl

Pallavi Saluja

Ajay Bahl started his career as a Chartered Accountant, making the switch to law seven years later by setting up Ajay Bahl & Co. He eventually merged his practice with Zia Mody and Bahram Vakil to form AZB & Partners. In this candid interview with Bar & Bench, Ajay Bahl talks about his decision to join the legal profession, establishing Ajay Bahl & Co, the Clifford Chance-AZB best friend relationship, and what he thinks of the rumours of the firm breaking up.

Bar & Bench: Your thoughts on Indian legal industry and how the legal profession has evolved over the years?

Ajay Bahl: I have seen the legal profession evolve from the time I was an accountant. I spent about seven years as an accountant, observing the legal profession from the outside. I think it has been fantastic to see how the profession has evolved over the years, particularly in northern India. For many years, it was dominated by litigation alone. The whole advisory practice was almost non-existent, except in specific areas, which were more non-corporate. The corporate advisory was very nascent possibly because the Indian corporate sector was still growing at that time and liberalization hadn’t occurred. But I think the evolution has been fantastic….much beyond my expectation in terms of growth, opportunities, diverse practice areas, clients’ service etc. It has opened up phenomenal opportunities for young, legal professionals.

Bar & Bench: You were an accountant for 7 years? How did law happen?

Ajay Bahl: I was very privileged to have met Harish Salve and his father N.K.P. Salve very early in my career. They were my two mentors. Mr. Salve was of course like a father figure. It was very kind of Harish to have introduced me to his father. Between Harish and Mr. Salve (I called him “Uncle”) they were anxious that I do law. I basically used to do tax work with them and learnt a lot about law. In those days, Mr. Salve and Harish’s tax practice was very focused on huge clients with high level tax issues where you needed to understand corporate law, Sale of Goods Act, Contract Act, Companies Act etc. Mr. Salve used to say that one couldn’t practice tax unless one was well informed of these core areas. So I learnt a lot about law but he always insisted I should practice law. By then I had started doing my own work as well. About 6 or 7 years later, I decided to change my profession. I went back to him and told him I want to be a lawyer; so he said, “I will call Soli Sorabjee, that’s where Harish had started his initial days and you can also begin there”. But I told him I want to do corporate law, and I still remember Uncle saying, “What is corporate law? There is no such thing as corporate law”. Anyway, he gave me a letter of recommendation at my insistence to work with Shailender Swarup, who had recently left JB Dadachandji and set up his own practice. But he didn’t have a vacancy, so I started from my garage where I was already doing my tax practice.

Bar & Bench: What made you change your mind and change your profession?

Ajay Bahl: I used to attend evening classes [in law]. After about six and a half years of a serious tax practice, I decided to move to law. The tax department was remarkable at that time. The moment they saw somebody trying to work hard they would be very indulgent, and I had, by God’s grace, a pretty active tax practice considering where I had started. Having the background of being trained under Mr. Salve and with Harish, it was a phenomenal opportunity as well. But I felt I was getting very pigeon-holed into one specific field and my desire, even then, was to advise clients on corporate matters, company law, structuring etc. which I was doing but I was getting bogged down, particularly by audit. It was literally a week’s decision between me and my wife. I decided I need to do something more. So I surrendered my certificate of practice about 5 days before I was slated to sign my first tax audit report and that’s how I joined the legal profession and went to Mr. Salve for recommendation.

Bar & Bench: So you started Ajay Bahl and Co from your house garage? How were the initial years?

Ajay Bahl: Ajay Bahl & Co was just an extension of my accounting practice. By the time I joined the legal profession, I had moved to an office in South Extension [in Delhi]. We were already doing work for clients where I was doing tax, some advisory work and some audit work. So a lot of my existing clients continued to support my legal practice and gave us their legal matters and took more and more legal advice from us. And then we had couple of lawyers join in and one of my partners, Raman Sharma, has been with me since the beginning. He came to me to do his articleship in my CA firm, and I said, “Why don’t you stay as a lawyer?”. He is still a Partner of the firm and a very important part of the firm. In fact we used to have his name on the masthead and my wife’s maiden name so that we could show we had more lawyers who were not related to Ajay Bahl! Then, Sanjeev Puri and Nanju Ganpathy joined the firm. Nanju is very much associated with the firm. Sanjeev Puri is now a designated Senior Counsel but we try to work together as far as possible.

Bar & Bench: How did Ajay Bahl & Co become AZB & Partners?

Ajay Bahl: I had met Bahram Vakil when the energy sector opened up. He was a Partner at Little & Co then. We were also just acquainting ourselves with the developments in this field through a US law firm I used to do a lot of work with. In fact, I had met him when one of the clients of Little & Co was migrating to us because the client was in Delhi and it was much more convenient for them. We ended up becoming very good friends and continued referring work to each other and stayed in touch. Zia Mody and I met professionally on the opposite sides for almost 3 or 4 transactions one after the other. We just completely hit it off, as opposite side counsels and just continued our connection.

They were looking to expand in Delhi and we were looking to expand in Bombay. We already had a Partner at that time who was living in Bombay, Alka Nalavadi. So it made sense since both were looking to expand. We all had a meeting where Bahram, Zia, Percy Billimoria, another Partner from Delhi who is dual qualified like me got together and we all thought it all made sense. We had very few meetings between Zia, Bahram and me. People don’t believe it but it was as simple as that. We just met 3 or 4 times for generalities and we just decided that it seemed to be good idea to get together and we did it!

Of course, the good thing was that a number of our Partners in both the offices had been colleagues in college or in prior firms and they all knew each other and were good friends. So integration and building rapport was not a problem and one thing followed another.

Bar & Bench: There are rumours that you and Zia will split. Why do you think this is the case and does it bother you?

Ajay Bahl:  You can’t stop people. I don’t think anybody gave [AZB] any chance of success because (a) such mergers had not happened, (b) we had no common relationships; we were not friends as it was purely a professional contact. We are different personalities with often different styles of working. So it was not unusual for people to have looked at the partnership with some skepticism. But our basic ethos is the same; our commitment to what we believe in is the same.

But rumours go on. There are times when Partners have walked into my office when I am speaking to Zia [over the phone]; and the Partners sit there and wait and once the call got over, they would tell me, “We heard that the firm is going to be over but you were just now talking normally to Zia”. Whenever this used to happen, we would have a call, put it on a speaker and anybody could walk in and see that we are talking to each other and everything is fine. There are often things that you have to discuss at our level but there has never been a reason for us to think that we can’t work together. People want to speculate, that’s fine.

Bar & Bench: The perception that most people have is that the two offices function independently and not as one. What do you have to say?

Ajay Bahl: We are one firm; we are one office across the country and one balance sheet. We have different styles of operating; that is not a secret. We decided that we are not necessarily going to make every office a replica of the other because every office has been used to working with a particular person for a long period of time and there is no need to re–invent the wheel. So when you say we work “independently”, each office works independently but each office is completely wedded with the other. We exchange information at all times, Partners talk to each other all the time, and we have an exchange of documents, data, and information across offices.

We can’t stop people from making their judgment on how people operate in one office versus another. Within the same office, I have 17 – 18 core people who think differently and I can’t treat everybody the same way, that’s not my style. I feel that you have to learn to accept people for what they are; each person changes, matures, mellows, over the years. You can’t be fixated.

Stylistically people see things differently but in terms of our work ethic, what we believe in, our core values are same across every office. Our client commitment and approach to clients and, our client practices, quality and ethical standards  are absolutely the same.

Bar & Bench: Can you tell us a bit about the decision-making process at the firm?                                                                                    

Ajay Bahl: It has always been a unanimous decision amongst three of us. We never had to over rule. We have had initial differences of views when considering [of opinion] certain decisions, but ultimately we have taken unanimous decisions.

Many people have speculated on this Clifford Chance – AZB issue [and said] that I was against it. That was not true and, as I said, it doesn’t matter anyway; it was ultimately a joint and unanimous decision. Simple! No regrets. In all these meetings, all three of us were together; even when we started the relationship and also when we ended it. That is what a partnership is all about!

Bar & Bench: One of the reasons that the foreign firms entered into this best friend relation was that the market would eventually open up. Did you have the same thoughts when you decided to partner with Clifford Chance?

Ajay Bahl: Our arrangement with Clifford Chance was one of mutual cooperation and not any kind of partnership. It was very clear when we made this happen that we have lots to learn from them but at the same time we had built a reasonably decent practice in India. Therefore, we had certain knowledge about what happens here.

Yes, it was in the back of our mind the fact that the market may open up but I want to be clear that it was never that the moment the market will open up, Clifford Chance will take over [AZB] or the firms will merge or anything like that. It was just about being good friends and trying to approach work jointly wherever possible and yet being able to work with other law firms.

Other international law firms found it difficult to accept that [our relationship with Clifford Chance] was this sort of loosely based relationship. I remember people used to come here and I would take them around the firm. They would keep looking around and I would ask them, “Are you looking for Clifford Chance brochures?” “Ajay”, they would reply, “we truly are!” I would say that this was never meant to be a Clifford Chance office and now they could see it for themselves.

So, there was a thought that perhaps the market would open but what would happen, what would not happen was not on the table. May be nothing would have happened from our standpoint. We were very clear that we didn’t want any interference in the management, or decision-making, but we were sharing knowledge.

Bar & Bench: So what was the reason for ending the relation with Clifford Chance?

Ajay Bahl: As I said, we underestimated the reaction from the other law firms and we realized that from becoming a “must refer” law firm, we were becoming “refer only if absolutely necessary”. That was beginning to create some stress; not that it mattered to our clients but still it is awkward if a client is working with you and is also thinking that if he talks to AZB then he certainly has to talk to Clifford Chance, even though we may not have said so. It was beginning to create that doubt in their minds, and our teams were asking that question at the end of the day.

I think we were very responsive to these issues. One of the things the three of us thought through at that time was if we don’t take a decision, people would feel that we are incapable of questioning our own decision. We needed to let people know that we were willing to reflect on our decisions and we did.

I also think that at that point in time, the economy was such that things were not happening and there was not enough capacity in the market to work together. Despite best efforts on both sides, I don’t think we got the proper opportunity to actually get our teams to roll up their sleeves and get to know each other better at work. So all that and the general feeling that we should move on and go back to what we already were, led us to end the relation.

Bar & Bench: What are your thoughts on the entry of foreign law firms?

Ajay Bahl:  I don’t know if you are aware, the first ever approval given to a foreign law firm to open up an office in India was obtained by my office for Chadbourne & Parke. My view even at that time was that at the end of the day you cannot stop a client from seeking advice from a firm of choice. I respect the fact that our association SILF (Society of Indian Law Firms) and Mr. Bhasin are doing something they believe is important for the professional community. I somehow feel that it’s not the easiest thing when you talk about entry of foreign law firms and I asked a lot of those firms that what is the model that you will have? The fact is that the profession has evolved in India; the clients have evolved. Is the client suddenly going to change his fee structure because he feels that he is now working with a foreign law firm? I am not so sure. Personally, while I don’t think it’s the end of the world if they open up [the legal market] and allow foreign firms, the devil will be in the details as to how they operate in India. I think India is a challenging environment for anybody.

Bar & Bench: Talking about clients, do you see different kind of demands with specific reference to cost cutting, reducing the number of lawyers on a project or moving from billing hours to a lump sum payment?

Ajay Bahl: Some. I think they expect us to show some sensitivity, which we do. To be honest with you, I never had a client telling me that my team is too big; reduce the team. Maybe it is the background. I come from a much wider ‘scope background’; I think that in India over-specialization not always the best for a client because our market environment is so challenging that over-specialized advice sometimes misses the holistic picture. So we have built a model where we have tried to give a much more balanced service to the clients. Of course, we have specialized skill sets, and some people with more experience in certain areas than others.

We will have one Partner, who will invariably have a very strong relationship with the client and will populate it slowly among the smaller group (but you won’t suddenly have a team of 7 guys sitting there). He is expected to have a lot of knowledge about his or her client, in terms of their domain, in terms of their needs; so this partner becomes a very – very important resource for them intellectually and also from a cost point of view because he doesn’t need to split himself to 7 different people to be able to give advice.

Of course, there is bound to be some degree of cost sensitivity. We do get request for budgets, which is fair. I think our view is very simple: we have to be responsive to needs of the client. I think some of it is just part of the evolution and we have respected that over the years.

Bar & Bench: Do you have clear Partnership tracks for attorneys in the firm? How does the equity model work?

Ajay Bahl: We keep some of these things very confidential. We have good retention of lawyers who have been here for a long time. As you know, last year we did induct one youngster as a Partner and this year we have made five Partners across Delhi and Mumbai. We hope to continue reviewing that over a period of time. We don’t cast things in stone. That’s my style.  But we do have….I won’t say targets, but we do have expectations from people generally, and I think those expectations are articulated. We would like to think we are responsive. It’s peoples business at the end of the day.

Bar & Bench: What is your vision for the firm and where do you see AZB in 2020?

Ajay Bahl: I never look that far ahead. I look at life year to year so I am not one of those who plan too much ahead.

I think the engine of growth has to be way beyond just my vision. I think the vision and the growth will be driven by the combination of the wonderful people we have. My vision is to effectively keep a good team together, continue to re-invent yourself, keep looking over your shoulder because one thing in profession is, it is too easy to get taken in by the ‘buzzword’, by the “brand AZB”. I keep telling people to come down to earth, especially to the younger lot and a lot of that is bound to be from how their seniors conduct themselves. So we are very cautious of this and all my senior teams are phenomenally sensitive to this, their behavior with people is exemplary; their behavior with the Associates is exemplary.  When you are working so closely it is very easy to be swayed by your seniors.  So the core team here believes in that and it is being imparted in the right way. I think that’s the growth. As I said, when people are good, they take pride in their work and instill that desire to do well, to have that confidence, to have that respect from their client, that itself is the galvanizing engine to my mind.

I think the fundamental to the vision is, are you going to keep an organization which continues to create intellectual capacity, while retaining the humility and the ability to communicate well with the client, to satisfy him, anticipate the clients’ needs and think for the client, which automatically gets you the loyalty and the associations.