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In the second part of the exclusive interview with Bar & Bench, Shardul Shroff talks about how Shardul Amarchand Mangaldas & Co is different from the erstwhile Amarchand Mangaldas. Shroff also shares specific details on the governance structure of the new firm.
We also get Pallavi Shroff, the firm’s Managing Partner to talk about how the new firm is going to work.
Part II – Structure of the firm and growth strategy
Bar & Bench: How is the new firm similar to or different from Amarchand Mangaldas Suresh A Shroff?
Shardul Shroff: We have carefully evolved our business mission statement, which is based on the values we stood for and the things that are core to us. We summed it up in a single sentence by saying,
“Enabling business by providing solutions on a trusted advisory basis with four principles in place – quality, responsiveness, innovation and collaboration.”
This was the core with which we wanted to move on. Everything is structured around that.
We have modified our structure because there were weaknesses in the governance.
The first thing I have done is stepped down from the Managing Partner’s role to the Executive Chairman’s role, which is a broader role – dealing with client relations, quality, culture etc. Pallavi has moved into the Managing Partner’s role and there are many reasons for this.
Most importantly, I wanted to emphasise that there is women empowerment [in this firm]. We are one of the few firms where there has been an equal proportion of men and women, for the last 17 years. Despite that, we have never had a woman Managing Partner. So that was a statement I wanted to make.
Bar & Bench: How is the firm structured?
Shardul Shroff: So it is a two-tier management structure with a Managing Board and an Operations Committee.
The Managing Board will be the policy-making body and it will meet once a quarter. The Board will include the Executive Chairman, three Regional Managing Partners, two non-Shroff Independent Executives, and Equity Partners Gunjan Shah and Jatin Aneja. One third of the Board will be totally independent and non-lawyers who will give us perspective on how the outside world is looking at us and will help us stay focused.
Pallavi Shroff will be the Regional Managing Partner for Delhi and Gurgaon, and we will have two other Regional Managing Partners for the Mumbai-Ahmedabad and the Bangalore-Kolkata regions.
The Operations Committee will be headed by the COO Jennifer Milford, and will also have the CFO, and the three Regional Managing Partners as constant members. We will then have the group heads of nine main practice groups. The Operations Committee will meet on a monthly basis and that’s an intense process for a firm.
Bar & Bench: What is your succession plan?
Shardul Shroff: So, we are putting our succession plan in place right away rather than waiting ten years. There will be two Managing Partners who are non-Shroffs and one who is a Shroff.
These are huge changes from the past and it is an on-going process. If we get the backbone right and the people right, then quality flows. The focus is to create a quality back-end structure so that the front-end can deliver.
Bar & Bench: What is the Partnership model?
Shardul Shroff: That’s one thing we have kept similar from the past. We used to have two categories – Equity and Fixed partnership. Now we have three tier partnership – Equity Partner, Senior Partners in the Fixed class and Junior Partners in the Fixed class.
Bar & Bench: What is the growth strategy for Mumbai and Bangalore?
Shardul Shroff: Mumbai is not a new jurisdiction for me. All through these 35 years, I’ve been doing a lot of Mumbai work. It was the place where I began and put in my initial nine years before moving to Delhi. It wasn’t like I was cut off from the Mumbai market.
We will have a new Managing Partner in that space, and until then, I am putting in more effort on the Mumbai market. In Mumbai, we already have 7 partners and we will have 30-40 lawyers in the beginning but by the end of the year, I hope to hit the 100-lawyer mark. In Bangalore, we plan to have 25-40 lawyers. By the end of year, the firm should have 400-450 lawyers and move from 60 to 90 partners.
Every year, I want to add 100 people. By 2017, the centenary year of Amarchand Mangaldas, I want to be in the range of 600-700 lawyers with 125 Partners. When we split, we were 43 partners each.
Pallavi Shroff: I think the general plan for the whole firm’s growth is aggressive, but calculated. Our focus will be on quality and we’ll do everything necessary for the sake of quality.
Bar & Bench: Will the Mumbai market be difficult to break?
Shardul Shroff: We have understood how Delhi runs and what are the key issues in operating in Delhi and they are vastly different from Mumbai. We are fortunate in the sense that we know both of Mumbai and Delhi. There are very few people who know Delhi. Delhi is far more difficult territory than Mumbai. And it is a low-paying territory. If I do three matters here, they are equivalent to one matter in Mumbai. So it is a 3:1 ratio.
Bar & Bench: There have been rumours regarding you acquiring a Mumbai law firm?
Shardul Shroff: They are just rumours and speculations. Let’s leave it at that!
Bar & Bench: How do you determine if lateral hires will fit into your firm’s culture?
Shardul Shroff: Before hiring, I don’t just look at brilliant academics. For me, it’s the cultural fit that matters. Maintaining a sensitive balance within the firm is more important than going out in the market and disrupting the market and throwing money. That’s not my idea. I want to do it systematically.
Pallavi Shroff: It’s not like there aren’t a lot of people in the market we can’t pick up. Its not about numbers. Culture and quality are the two most important characteristics.
Shardul Shroff: Today I’m worried that the business card all employees carry has my name and that shouldn’t be spoiled!
Bar & Bench: Most people feel the break up has created a talent war and people are joining because of the hike in salaries. Do you think people are shifting mainly due to higher pay?
Shardul Shroff: Money is not the criteria. I must get the feel that this person is one of excellence and will be a good fit. He needs to be empathetic to the client. Money is a function of these abilities. I don’t have money to throw. It took a lot of hard work to create whatever wealth we’ve created. Talent is very important. I’ve never gone on pedigree, I’ve always gone on merit. My firm is a true meritocracy, right from the beginning. Sometimes, you get talent individually, sometimes as a team and sometimes as a firm. So whichever way I get the best talent, as long as it fits with the culture of my firm, I will take it.
Bar & Bench: What are the short term and long term challenges you see?
Shardul Shroff: First and foremost, it’s about having the right number of people in terms of diversity and the ability to service all the practice ranges. Culture assimilation is important and that is the biggest challenge. To ingrain your culture in new people coming from different firms. I want to mentor them so they come about the same. If you have too many numbers, it’s difficult to mentor people.
Bar & Bench: Do you have any kind of family framework arrangement?
Shardul Shroff: We don’t have any family arrangement now. We only have a partnership deed. We look at ourselves as entrepreneurs and not so much as a family in the firm. What would any entrepreneur want as a sense of minimal rights? So we’ve put down five or six minimal rights of the entrepreneur which include – change of name, issues of merger/alliances, dissolution etc. Basically the issues where the character of the firm changes, those are the minimal rights that we have kept as an entrepreneur.
Bar & Bench: What would you say is your vision for the firm for the next 10 years?
Shardul Shroff: Growth with quality. I think we have a three-year rolling plan. The market is so swiftly changing that I don’t think we should be thinking of the next five years or ten years. The market changes every 3 years dramatically. With that in mind, we have a structure for three years – 600 lawyers with 125 partners and full service organisation throughout India is the vision.
Bar & Bench: AMSS was always known as a family-run firm. Do you plan to transition to a robust professional firm?
Shardul Shroff: Look at the structure of the new firm. We have two non-Shroff Managing Partners and we have only two Shroffs on Managing Board out of nine. We have decentralized the entire backbone of the firm into operational people who are certainly not Shroffs. It is already a professional firm.
Of course there is a sense of entrepreneurship that you bring. You need to take risks. Not everyone can take decisions and dare to do things. But as I see it today for whatever it takes to build the firm – I have put my time, money and effort. It requires four Ds – drive, desire, dedication and discipline to build a firm.
Bar & Bench: You came to Delhi in 1980 to set up the Delhi office. Now, 35 laters, you are going back to Mumbai.
Shardul Shroff: When we came to Delhi in 1980, we were just two people with no support. We created all of this. At least now, we have the satisfaction of having done this before, so we’re not novices. We’ve done it in Delhi, there’s no reason why we won’t do it in Mumbai. We have the experience of setting up. We know what the pitfalls and the advantages are, so we know what we’re doing.
Bar & Bench: How has the split affected the Indian legal market?
Shardul Shroff: I think they’re all running scared! We’ve stirred the market clearly because it’s a disruptive event in the market. There’s a hunt for talent and firms believe they are losing people, and that’s always a threat.
In fact, it’s a double whammy for the rest of the market. Now there are two Amarchand Mangaldas(es)!(laughs)
You can read Part I here. In Part I, Shardul Shroff shares his thoughts on the division of Amarchand Mangaldas Suresh A Shroff.