With a backdrop of the
Following
The reasons for this recent interest are obvious. Despite rampant inequality and highly visible poverty,
This new clout was in evidence on 31 January when Herbert Smith successfully concluded Tata Steel’s £6.2bn takeover of Anglo-Dutch steelmaker Corus. This was the largest-ever outward investment by an Indian company.
The firm has represented the huge Tata Group for many years, thanks in part to the presence of partner Nimi Patel, who joined the firm in 1994 from the legacy
Back in 2000 Patel advised Tata Tea on its £280m purchase of Tetley Group’s share capital as part of a joint venture between the two entities.
“We invested pretty early in recruiting Nimi back in 1994,” comments Chris Parsons, Herbert Smith partner and chairman of its
A bold statement perhaps, but the City firm has some eye-catching mandates to back up the hype. Apart from its close connections to one of India’s largest conglomerates, the Tata Group (Tata Steel, Tata Consultancy and Tata Motors are all in the top 10 of Forbes’ India 40), Herbert Smith has reeled off a sumptuous list of prominent deals.
On 15 March the firm successfully concluded Essar’s partnership terms with Vodafone over the ongoing development of
Such deals are eagerly mopped up by top City firms but the likes of Freshfields, Herbert Smith and Linklaters remain hindered by a notoriously restrictive Indian legal market — save for the odd liaison office operated by firms such as Ashurst — and there is a growing clamour for de-regulation.
Until recently, the global investment banks have had to operate joint ventures in
Such liberalisation raises cautious hopes that the legal arena will follow suit. Parsons comments: “A country becomes a focus for international deals if you have the key advisers on the ground.” Since becoming chairman of the firm’s
The fleeting visits are not ideal, according to Parsons. “We lawyers are fighting a rearguard action and highlighting the example of China, which shows that competition does not mean bad news for the incumbent firms,” he says.
In
The Indian authorities are showing signs of softening their protectionist stance.
For that to happen without the presence of foreign lawyers would be impossible.
Strictly speaking, Indian firms are prevented from having more than 20 equity partners, thus preventing the usual stampede for consolidation in most other key jurisdictions.
Though an increasing number of larger Indian firms are making positive noises regarding foreign competition, the Bar Council of India (BCI), the primary regulator for the country’s legal profession, remains strongly opposed to any reform.
Earlier this month All India Bar Association (AIBA) chairman Adish Aggarwarla said the organisation had warmed to the idea of foreign firms entering
With the majority of
“The large firms that are positioning themselves for a merger are irrelevant to the Bar Council of India because their views are completely different to 90% of the legal market, which are advocates,” says David Roberts, a partner in Olswang’s
He believes that the situation demands a sustained PR effort to convince the majority of the profession that foreign firms are not interested in advocacy, and that until that time there will be resistance from the BCI.
For
Olswang in December 2005 advised on the first Indian company to list on
According to Roberts, though Indian companies are prevented from directly issuing shares on foreign exchanges, by way of a placing of global depositary receipts, the structure provided a fix to allow Indian companies to come to market in
The Indian Government now demands that private companies simultaneously list in Mumbai as well as AIM. Olswang’s
But while Olswang continues to concentrate on AIM transactions emanating out of
“There are three transactions that we have recently pitched on that came through two firms in
The firm now has an Indian lawyer, Rishi Bhatnagar, working in
A very different strategy has been in evidence at Linklaters, which last year secured arguably the most audacious attempt to tap into the Indian market. Linklaters’ strategy saw the
Suresh Talwar recently retired from Indian firm Crawford Bayley & Co, before linking up with former AZB & Partners capital markets partner Shobhan Thakore to form the new firm in January. There are, however, no formal financial ties between the two firms — which would fall foul of Indian Bar rules.
Sandeep Katwala, head of Linklaters’
“We never decided that we wanted a ‘best friend’ firm but, since January, we have worked with them closely,” Katwala says. “It is a bit too grand to think of it as an initiative. We did not create it as such, but we enjoy working with these two individuals.”
When Linklaters advised Vodafone on the acquisition of a controlling stake in Hutchison Essar, it teamed up with Talwar Thakore.
It is just one sign of Indian firms becoming more outward-facing. One of
“London is seen as the main hub for European and US business and we felt that to go out of India, as a first step we should have an office in London,” says name partner Som Mandal. “It is a central place for reaching the
Mandal says he is a strong supporter of foreign firms gaining entry into
Despite the more welcoming message coming from
Given such uncertain prospects for reform, London firms have begun bulking up their Indian-qualified teams in London and Asian offices, rather than putting all their eggs in one basket.
Last year CC recruited corporate lawyer Sumesh Sawhney, a former partner of Indian firm Amarchand & Mangaldas & Suresh A Shroff. Similarly, Freshfields hired former Wadia Ghandy partner Nihar Mody last month.
At the junior end, Herbert Smith will in April interview Indian law graduates at the prestigious National Law School of India University in
With the potential of Indian corporate clients growing by the day, City firms have no intention of sitting back passively while the local market crawls toward reform. Should Herbert Smith’s growing Indian contingent help to source more deals of the Tata Steel/Corus magnitude,