Are you dreaming of becoming the next Zia? India is the world's only major legal market where you can still do more than just dream.
Legally India has asked more than a dozen legal entrepreneurs for their advice on how to live that dream.
"If you feel if you are not able to achieve what you want in larger firms with larger brand names, there is enough work to sustain and flourish when you set up on your own," claims Lex Counsel's co-founder Dimpy Mohanty.
Why would you?
"The usual reasons," muses Lexygen founder Vijay Sambamurthi, "the entrepreneurial bug more than anything else."
ABM Law Associates founder Abhishek Mathur blames aspiration: "It's something I've always wanted to do."
IP Gurus founder Pooja Dodd says she was looking for professional independence when she set up a new IP boutique earlier this year.
Indus G&D Law co-founder Gaurav Dani move to found Induslaw was "prompted simply because we couldn’t see ourselves working in those family driven firms".
That angle can be significant from a financial perspective too. Tight, family or 'lala firm' equity and organisational structures often make the idea of creating your own equity attractive.
"If successful, there is more money in this model than anywhere else," claims Indus' Dani. He explains that financially, he is now in a much better position than he would have been had he stayed at some of the large firms where he would probably be a partner or on track to partnership.
"One good feeling you have when working on your own is you think that the sky's the limit and you can do a lot of things," recalls Legal Spectrums' founder Asim Abbas.
"Money is important but there's also such a thing as dream and a passion," explains Dani about Induslaw's initial idea. "There is a huge market in the mid-market area and there's no law firm offering that service and we felt that a law firm could tap into the market."
"What I thought was that there is no telecom law firm in the market," says Legal Spectrums Asim Abbas, who started up a niche telecoms practice.
Lexygen went for the niche private equity field.
But near full-service start-ups also exist and bright ideas do not just have to be restricted to an area of law.
"I had – and continue to have - certain strong ideas, how to build an organisation and what kind of organisation to work for myself," Lexygen's Sambamurthi told Legally India. "I figured the most effective and convincing way of doing it is to put my own equity into it."
Narasappa, Doraswamy & Raja was set up in 2006 on the premise of the three founding partners all having significant overseas experience and being "able to offer clients international drafting style at Indian price", explains the firm's co-founder Siddharth Raja.
The barriers of entry in India – at least for local lawyers - are very low, whereas liability insurance and huge property costs can make it all but impossible to break into London or New York's legal scene.
"A maximum of about Rs 2 lakhs is sufficient to have a proper office at home," says Legal Spectrum's Abbas.
He explains that there are two different models for establishing a law firm. "The first is that you go for heavy investment in terms of infrastructure and lawyers' costs, which requires a lot of capital. Once you have everything in place, you get a revenue stream and clients."
"I followed a different model," he continues. "Start low with low infrastructure development and get clients and a revenue stream fast and follow on from there."
Abbas began in January 2008 and today still operates from his residence together with three other lawyers who also operate from their homes, although a real office is soon on the cards.
A disadvantage, he says, is that he has lost clients demanding a "proper" team and office, despite his long-time industry and client contacts. "But rightly so," he admits, "because an office and team give a comfort level to the client."
While the rate of growth with such a model can be lower, so is the risk.
"Because overhead costs are less you can survive on very minimal billing and in bad times, people look for cheaper options," argues KNM & Partners co-founder Vipender Mann. "There is an opportunity for small firms to survive."
Why wouldn't you?
Running a law firm is very different from working in one. Say what you will about law being a profession, at the end of the day you will be in charge of a business.
IP Gurus now has a team around five but Dodd says that nevertheless, as an individual you end up wearing a lot of different hats, doing admin, HR and everything else that is usually taken care of behind the scenes. And that is on top of getting clients and generating fees.
"It has been a lot more difficult than anticipated, but I'm surviving," she jokes.
Leaving the fold of a larger law firm will also see you waving goodbye to big-ticket transactions and brand equity for the foreseeable future.
"Goodwill is a big problem," agrees KNM's Mann. "Initially you have a big problem convincing people who you are." Often clients will also like the assurance of an established firm, which can be more comfortably blamed if transactions should go wrong.
Lex Counsel's Mohanty complains: "Particularly with government projects, they don't consider your previous experience in previous law firms - they want your experience to be in the firm where you're pitching for work."
Clients will instinctively also be looking to squeeze new firms on price, particularly if pitching against the established players. "People expect you to be rather low down with the billing, which is not what you want to project," she says.
An unknown brand also puts you into a difficult human resource Catch 22, without a flood of unsolicited CVs landing on your desk every day as is the case at the big firms.
ABM's Mathur says that for a start-up it is very important to have a "quality team" but most start-up firms do not have the deep pockets to hire the best or most experienced people in the market.
Managing cash flow is another initial challenge. "It is a shock to adjust," remembers Abbas. "I started Legal Spectrum in January and got my first payment in May – for four months there was no payment. If someone does not have the buffer for four or five months, you will have sleepless nights."
Branding can also make recovery harder, as larger firms often have the leverage to gently force clients to pay-up, despite clients themselves also suffering under a cash crunch.
"You need the money but clients do tend to take much longer than what you were either promised or expected," recounts ABM's Mathur. "And you have to be very careful with a client, because you can't be seen to be harsh or impatient to get the money."
How do you?
"It was hard initially," remembers Indus' Dani. "But we started getting small work, some advice, some opinion work and started to do that work to keep it ticking. And somehow you end up in a transaction and you end up with more than you can handle."
But before you rush to hand in your notice, good planning is vital.
"My advice is to make sure to know exactly what you're getting into – look at things you would never imagine," advises IP Gurus' Dodd. She says that initially she was doing almost no legal work and mostly dealt with recruiting, establishing systems, writing firm and lawyer profiles, trying to build a website (and seeking permission from the Bar Council of India) and more.
A good business plan should also include a good idea of where your money will come from.
"Ultimately for a law firm, when you leave, the biggest support comes from your existing client base," says Phoenix Legal co-founder Abhishek Saxena, adding that it is not easy for a start-up to get support from new clients.
Before leaving, most entrepreneurial lawyers therefore test the waters. "[Start-ups] generally discuss with their clients, 'if I start on my own, will you support me?', or they have some kind of understanding with in-house counsel or CEOs," sayd KNM's Mann.
While some small mandates might be thrown the start-up's way, many bigger clients' hands are often tied when it comes to institutionalised adviser relationships.
Family connections can help but will not replace hard work.
If you are leaving with a crowd, you should also be very clear on how costs, revenues and responsibilities are shared. "You need to make sure that you are along same wavelength," says Phoenix's Saxena.
"In the current day and age you'll have to spend more time with your partners than with your better half - you need to have a clear business plan charted out," he quips.
All lawyers interviewed for this article report they are doing well and are happy with their career choice.
But this is perhaps not a surprise. 2003 to 2008 were the "golden years", remembers S&R Associates co-founder Sandip Bhagat, who set up in 2005. Most Indian firms grew very rapidly in that period but since then the market has gotten a lot more crowded and the economy has slowed.
So is it now too late to become the next ALMT, AZB, JSA, Luthra & Luthra or Trilegal?
"There is far more intense competition," agrees ABM's Mathur. "There is scope for another 100 similar placed law firms like me, there's enough work for everyone, but I don't know how fast you can become a law firm with a critical size, revenue and all-India presence now."
Nevertheless, opportunities exist to enter the big league, particularly if start-ups start merging and establishing a national presence, as many plan to do.
"It is not at all too late to start, there is enough depth in the market," claims Indus's Dani.
Phoenix's Saxena adds that "if you are confident in your abilities I don't think there is a real risk".
However, it will be a long road. All legal entrepreneurs agree that perseverance, hard work and consistency are the key qualities required.
After all, for the first few years your baby will only ever be as good as its last piece of advice.
But it will also be your very own baby.
If you are a start-up law firm or are thinking about starting one up, we want to hear from you ().
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