Rajiv Luthra ready to kick-start dilution of his equity stake at L&L Partners, urges Mohit Saraf to follow suit

In line with his endeavour to build an inclusive institution based on shared success, L&L Partners Founder Rajiv Luthra has decided to go ahead with the dilution of his equity without any further delay.

The development comes at a time when Luthra and Senior Partner Mohit Saraf are at loggerheads over the issue of opening up the equity to add new partners to the firm.

As per the partnership deed (corporate), Luthra has a stake of 66.6% and Saraf has a stake of 33.4%. However, the two partners have not come to a consensus on the issue of proportionality.

In an email sent to all corporate partners of the firm on Sunday, Luthra has requested Saraf to dilute his equity proportionately. The email states,

"I have openly committed myself to immediate dilution of my equity and have further expressed my readiness to go beyond any discussed dilution threshold in order to suitably include a large number of deserving candidates. The only condition on which all of this is premised is that all the present equity holders shall dilute proportionately which is not only the mandate under our present Partnership Deed but also a generally accepted norm across the industry, apart from being perfectly fair..."

Luthra writes that his email also serves as an appeal to Saraf to dilute his own equity proportionately. He has also asked Saraf to express whether he chooses not to do so by 6 pm on Monday, failing which it would be understood that he has consented.

He also clarified that if Saraf doesn't agree, he will dilute his equity alone. In his email, he says,

"...as per terms of the Partnership Deed governing L&L Delhi, it is possible for me to give away equity out of my share even if Mr. Saraf refuses to give away his equity."

Luthra has further resolved to kick-start the dilution of his equity "to deserving candidates in the firm based on reasonable markers".

As per Luthra's email, the reasonable expectation from new equity partners will be their commitment to be with the firm and act in best interest of the firm. For immediate exercise, the following norms have been proposed by Luthra:

1. The person must be a lawyer eligible to practice law in India and must have submitted his credentials in this regard to L&L Delhi.

2. The person must have signed the latest version of the retainership agreement with L&L Delhi.

3. The person must be a professional with 16 years of standing at the Bar and on a fair assessment, would be seen as an important contributor to the firm.

These considerations may be relaxed to accommodate women as equity partners.

Luthra concludes by saying that persons who do not meet the criteria but have "compelling credentials" may write to him stating their reasons.