India's Biggest In Law, Amarchand Mangaldas
f I hadn’t done law, I would have been a doctor,” says the quiet and diminutive man sitting on a plush chair at the Mumbai office of Amarchand & Mangaldas & Suresh A. Shroff & Co. (AMSS), the firm that advises the bluest of blue chips in corporate India. In many ways, Cyril Shroff brought medical precision to the practice of law at the family-run firm, one half of which he inherited.
It is Saturday and the ace corporate lawyer is relaxing in a bold red shirt. He talks about the new thing that has him excited. He is helping draft the new Unique Identification (UID) Bill for the government. “Cyril has such a sharp mind. He cuts through complex regulations and he has such a good understanding. He is like a brain surgeon,” says Nandan Nilekani, chairman of UIDAI and one of the co-founders of Infosys.
The firm, jointly run by Cyril in Mumbai and his brother Shardul in New Delhi isn’t just the largest, but is also the most influential law firm in the country. It is reported to be raking in annual revenues to the order of $100 million. It employs over 470 lawyers across five offices. The firm has grown rapidly over the last decade, and it plans to double its size in the next two or three years. It has changed the way Indian law firms operate by pioneering new models in recruitment and partnership. It is the firm of choice for many of India’s top business houses including Reliance Industries, Tata group and ICICI Bank. Amarchand’s lawyers are often present in the most influential boardrooms mapping out the most powerful deals. Its managing partners are regularly involved in framing government policy and regulation. You can see why the firm has a formidable reputation in India and abroad. “The Shroffs have briefed me on many matters, and I find them excellent to work with,” says lawyer-turned-politician P. Chidambaram, union home minister, in an exclusive chat with Forbes India.
Life, it would seem, is perfect for the hoary Amarchand. Except that it isn’t. The problems of India’s family-run firms that grow large are catching up with Amarchand. The Mumbai operations run by Cyril and the Delhi operations run by Shardul have two distinct operating cultures. This means daily operations are not standardised across the firm and the two offices don’t always agree on the future plans.
Some clients say they feel comfortable being advised only by the senior management because of a lack of mature talent at Amarchand. Many lawyers at the firm feel that the family wields too much control over the business and doesn’t share enough of the profits, which in turn is stifling their own career growth.
This problem is exacerbated because foreign law firms have already begun to circle the Indian market. Even though they are not allowed to practice in India, they have formed alliances with local firms and set up liaison offices. Over the last few years Amarchand has lost very senior people to these firms. In three to five years, a full-fledged entry of foreign firms is quite likely and a new generation of domestic firms would have come into their own. In other words, the time for solving the internal issues is now. Otherwise, just like it challenged and beat bigger firms in the past, Amarchand too will be overtaken by the new firms that are either more entrepreneurial or global.
Founded by Amarchand Shroff, Cyril’s and Shardul’s grandfather in 1917, the firm made huge leaps in the 1980s and 1990s under Suresh Shroff, the founder’s son. But then, it wasn’t the biggest. The market was dominated by giants such as Mulla & Mulla and Crawford Bayley.
“The deadwood in these firms had started to pile up around then. They were failing to keep up with the times whereas Amarchand had started to enter into new practice areas,” says a former Amarchand partner. Suresh made a number of shrewd moves and weaned business away from his competitors.
The relationship with Reliance Group is just one example of his successes. “Cyril’s father, Suresh, was on our board. He advised my father and helped us start Reliance, and now his son advises me,” says billionaire Mukesh Ambani. “I’ve had the good fortune of growing up with Cyril.”
In 1980, Suresh Shroff sent his elder son, Shardul, who had already qualified with his LLB (till then, Cyril hadn’t), to Delhi. Amarchand had taken over a firm there and that operation wasn’t yet doing well. “I had never appeared in a court [before that]. The day I landed in Delhi, I had 3,000 cases to argue. It was a baptism by fire,” says Shardul.
But it wasn’t until 1994 when Suresh Shroff died, that Shardul and Cyril formally took over the reins of management.
In the preceding years, Suresh Shroff had capitalised on the liberalisation of the Indian economy and expanded the business. ICICI Bank’s K.V. Kamath recalls those days. “They grew and so did we. A whole lot of new institutions got built in this country in the Nineties and Amarchand was there guiding us and holding our hand,” he says. ”Every new business we built we relied on them to provide us that stamp that this is what we could do, and how to do it.”
By the time Cyril took over at Mumbai in 1995, Amarchand had offices in Bangalore and Kolkata (Hyderabad would be added later). While Shardul had fought his way up, Cyril had the benefit of having worked under his father for nearly 14 years. And this perhaps explains the different ways they look at the business. “What I have been through and what he (Cyril) has been through has been a totally different style of functioning,” says Shardul.
Their colleagues didn’t fail to see the distinction. “They are two very different types of people. One fought and maintained the office on his own, and one had the office bequeathed to him. So of course their inter-personal relationships and personalities are different,” says a former partner at Amarchand.
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