Exclusive: AZB & Partners and Clifford Chance broke off their best friend relationship yesterday night to become “good friends” after both firms saw fewer referrals than expected and legal market liberalisation became more unlikely than when they first entered into the relationship two years ago.
AZB Mumbai-based co-founding partner Bahram Vakil and two authoritative Clifford Chance sources confirmed the development that both firms would now continue as “good friends” instead of best friends.
One AZB partner commented: “In real terms it would mean greater freedom to work with other firms while remaining secure about our good friendship.”
One Clifford Chance partner told Legally India that one of the triggers for the break-up was that when the firms entered into their tie-up legal market liberalisation was expected to occur soon. Now momentum had been lost, said the partner, although Clifford Chance was still keen to open an on-the-ground office in India whenever regulations permitted.
It is understood that another reason was the relative scarcity of joint mandates on larger deals, with it often being hard to convince Indian clients instructing firms other than their previously established overseas legal advisers.
In addition, sources told Legally India that the slump in the global economy and in banking - one of Clifford Chance’s core practice areas - has meant that inbound referrals into India from the magic circle firm were fewer than expected.
“I don’t think there is any single [international] firm out there which has the ability to sustain any firm like ours [in terms of referrals],” commented one AZB lawyer
Story of a break-up
AZB co-founding partners Ajay Bahl, Zia Mody and Bahram Vakil visited the London office of Clifford Chance on Tuesday (11 January) for their scheduled and regular six-monthly relationship evaluation meeting, two years after the firms first announced their best friendship in January 2009.
The visit was accompanied by heavy speculation in the Mumbai legal market that the firms would break off their best friend relationship. Authoritative sources close to AZB confirmed last week that the relationship was discussed at the meeting but nothing had been pre-decided although the status of the relationship was under continual discussion before then too.
At the meeting both firms agreed to wind down the official relationship by the end of February 2011 but plans were accelerated this week as market rumours and speculation continued to mount, with both firms having terminated all their previous contractual ‘best friend’ arrangements yesterday night (21 January 2011).
An internal announcement was sent to Clifford Chance partners earlier today.
In November of last year Clifford Chance Singapore managing partner Geraint Hughes succeeded India head Chris Wyman, who retired after 16 months seconded to AZB in India where he met clients and forging closer relationships between AZB’s and Clifford Chance’s partnerships.
A strong driver for AZB to enter into the relationship was so that lawyers could take part in Clifford Chance training courses and making use of the magic circle firm’s knowledge management infrastructure.