Is L&L Partners heading towards a split? Mohit Saraf apologizes to firm's lawyers after ugly spat with Rajiv Luthra on Zoom call

L&L Partners Founder Rajiv Luthra and Senior Partner Mohit Saraf have reached a deadlock on the issue of opening up the equity to add new partners to the firm.

The tussle over the question of dilution of equity recently led to an altercation between the two on a Zoom call.

As per the partnership deed (corporate), Rajiv Luthra has a stake of 66.6% and Mohit Saraf has a stake of 33.4%.

On September 24, a firm-wide Zoom conference turned a bit ugly, with Luthra and Saraf both making allegations against each other. Luthra openly spoke against Saraf and his future plans with regard to the firm, while Saraf retaliated and made some nasty remarks against Luthra.

During the zoom call, equity partners from the Litigation Practice at L&L (Litigation Partnership) showed their support towards Luthra.

The call ended with Rajiv Luthra telling the firm that he would work towards a solution.

Today, Saraf sent out an email to the entire firm clarifying that the call was not organized by him. The email reads,

"In fact, upon receipt of the call invite, I had written to Mr. Luthra (marking the partners’ group) to not convene this call to agitate personal issues amongst us, since projecting such acrimony to the young associates will only unnecessarily add to the nervousness. Mr. Luthra however denied my request."

He has stated that as a Senior Partner and founding member of the firm, he cannot absolve himself from all that transpired over the call on Thursday.

Saraf also apologised to the members of the firm, stating,

In his email, Saraf also regrets saddling the firm's members with the interpersonal issues of the duo and creating fear and uncertainty in their minds about the future of the firm.

Saraf goes on to reassure every employee and retainer at the firm that they are his "topmost priority".

With a view to coming clean about the partnership to the lawyers at L&L, Saraf has disclosed in his email the partnership deed of the firm dated March 31, 1999, the key provisions of which are as follows:

a. Under the Partnership Deed, Mr. Luthra and I agreed that all new mandates, new hires or new assets that we create shall vest with Firm and neither of us can engage in legal practice outside of the Firm/a new division set up by the Firm. Till October 1, 2003, Mr. Luthra had limited ability to carry out legal work through his erstwhile sole proprietorship (i.e. Luthra & Luthra Law Offices), after which date all such operations (including employees, if any) also stand assigned to the Firm. (Please see Clause 4).

b. Till 2010, Mr. Luthra had a casting vote on all material decisions of the Firm. Post 2010, the casting vote fell away (barring with respect to very limited matters such as amalgamation with a foreign firm, addition or removal of an equity partner that may have joined the Firm post its formation) and therefore all material decisions in relation to the Firm has to be unanimously agreed between Mr. Luthra and myself. Neither Mr. Luthra nor I can therefore unilaterally decide on matters such as hiring and firing of retainers/salaried partners/employees of the Firm, remuneration of lawyers etc. (Please see Clause 7A). Therefore, be rest assured, that neither of us have disproportionate powers to tinker around with your careers in the Firm and you should go about business within the Firm without having any fear on this count.

c. I am certain, each one of you were nervous at the prospects of dissolution of the Firm by Mr. Luthra. Please note that, as per our Partnership Deed, this is not a partnership at will and hence, no such dissolution will be permissible without my concurrence. (Please see Clause 8 (a)). I can assure you that I have not accepted any of his dissolution threats and will not agree to the same, since this will impact the lives and careers of each one of you.

d. Mr. Luthra does not have the right to ask me to leave the Firm. Furthermore, with effect from October 2003, I am entitled to retain all existing clients of the Firm. (Please see Clause 5A)

e. On the other hand, if Mr. Luthra decides to leave the Firm, the Partnership Deed states as follows:

i. Mr. Luthra will have no right to the name of the Firm and the same along with associated goodwill shall vest with me/the Firm being run by me. (Please see Clause 5A, the paragraph under sub-Clause 1 read with Clause 9A (b)).

ii. All assets, offices, employees, counsel, clients etc. shall vest in me. (Please see Clause 9A (a)).

iii. Mr. Luthra will not be able to work with or engage the services of any employees, counsel, member of the Firm. (Please see Clause 10A (i))

Saraf also clarifies that it is not his intention to pre-judge the outcome of the partnership's discussions or to impose his interpretation of the partnership deed. The email goes on to state,

Saraf concludes his email by saying that he remains committed to securing the future of the firm and its lawyers and will exercise his powers under the partnership deed to this end.

Bar & Bench has reached out to Rajiv Luthra and Mohit Saraf for comment.