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Clifford Chance on India: Stuart Popham interview


Clifford Chance senior partner Stuart Popham has always exhibited infectious enthusiasm for India. Legally India talks to him about the perennial joke of liberalisation, offshoring, India's legal future and nine months of best friendship with AZB & Partners.

Popham wisely avoids the running joke that the Indian legal market will liberalise in two years but adds: "I am confident it will happen. I am just not sure what the catalyst is but I will keep knocking on the door and seeking to persuade people. But it requires Indian lawyers to want it."

"When we look at the market and the way we hear it, many younger lawyers are looking for the market to liberalise so that they have other career opportunities within India," he claims. "Equally there are many more senior lawyers who would be in favour."

However, he concedes that the ones who will take the most convincing are the ones with influence and that many are not there yet.

Enough Indian lawyers need to realise that there is nothing to fear and everything be gained by liberalisation, says Popham.

Breaking ground
International firms breaking into new or hostile markets is nothing new but arguably Clifford Chance was the firm that pioneered that business model at the top-end.

In 1987, which is incidentally also the year that the UK's legal trade press first kicked off with the launch of The Lawyer magazine, the English firms Coward Chance and Clifford Turner merged to create the country's largest law firm of over 600 lawyers.

Clifford Chance continued expanding in continental Europe but it was only at the turn of the millennium that it transformed into its current shape by merging with US firm Rogers & Wells and Germany's Punder, Volhard, Weber & Axster to turn into a 3,000 lawyer beast.

A truly global law firm was created. And although many local lawyers did not necessarily welcome the external competition the cat was out of the bag and the rest of the magic circle and other rivals applied the same blueprint.

"Clifford Chance has always followed or gone hand in hand with clients in markets where there is a need, as perceived by clients, for legal services," notes Popham. "How we go about delivering those legal services obviously depends on local regulation."

India is now, of course, the last major remaining black spot. And with a lacklustre economy in the West the emerging markets and India are the only realistic hope for international law firms' continuing growth.

Other markets, such as Singapore and Japan, and even the European Union as recently as 1992, had legal professions that were heavily restricted to outsiders, says Popham, but most have now come around.

"We've opened markets or been the first into markets in a number of different countries and I can say to you, never once has that resulted in the loss of a single job or job opportunity in a country that's been liberalised."

"It's quite the reverse," he claims. "More jobs have been created in the legal community and supporting the legal community - never less."

He argues that from a client standpoint there is only a benefit to liberalisation and no downside. "For a lot of citizens of a country where the legal system liberalises, they see little or no impact at all, they are unaffected. But to those who are affected it's positive."

Albeit honestly held, those arguments are at least partly self-serving of course and arguably India and its legal market could survive very well without international firms.

India without CC?
"India with its developed legal system has the opportunity to be the centre of at least the subcontinent and probably wider, in an area that is rapidly developing economically and needs legal advice," says Popham.

"It makes every sense for Indian firms to internationalise to be able to offer those services rather than clients in surrounding and outlying countries to be looking to New York or London."

If as few as 5 per cent of firms were to internationalise and bring foreign lawyers into their firms, notes Popham, there is a huge business for them.

Then again, Indian firms are probably currently quite happy with the domestic pie that is theirs alone and large enough.

In the interim, international firms are trying to get any share of the action they can.

Many now have India practices that are larger than most domestic firms by headcount.

However, rumours abound that many international firms are running India as a loss-leader. Popham dismisses the idea but adds: "Pricing is competitive and we're running a business and we'll make business-like decisions over pricing decisions.

"I wouldn’t classify India as a loss leader; I would certainly classify it as an opportunity."

Tied up hands
However, it is still not always easy to justify India to partnerships without an actual office in the jurisdiction.

"It's practicing with one arm behind our back – it's not a comparable exercise in a way," muses Popham, and then segues smoothly into discussion of the recent magic trick the firm managed to pull off in India.

Off the shore
One place where Clifford Chance did make legal history in India was in opening its own "offshoring" operation in Gurgaon. Initially it supplied back-office services to the rest of the firm and now paralegals based there are billing 12,000 hours of lower-level legal work for other offices.

Popham says that while offshoring takes a lot of time, effort, investment and quality control, he feels that it has been successful.

"I've likened it in the past to being a bit like an Airbus aircraft. You have the wings made in one country, the engines in another, the fuselage in another, and the assembly is probably the most technically difficult.

"For an international transaction which cross a lot of borders, there is no obvious home for all of those."

"Offshoring in the way in which we're doing it is a step in the road to achieving sort of efficiencies that the 21st century requires us to do," he says.

"We are very pleased with our client relationships in India and very, very pleased with our relationship with AZB [& Partners]," he enthuses.

"And that, under the current regulatory regime, is a more effective way of providing work and Indian advice to our clients and actually of marketing the firm through AZB outside of India."

Best friends in India are nothing new and many have argued that Clifford Chance was for once the Johnny-come-lately foreigner to the Indian magic circle party.

Linklaters had its captive office with Talwar Thakore & Associates since 2006, Allen & Overy had Trilegal in 2008 and Freshfields Bruckhaus Deringer is consistently said to have a very close friend in Platinum Partners, although perhaps wisely neither firm wants to walk the best friends aisle (or plank) publicly for now.

By befriending the second-largest firm in the market at the start of this year, Clifford Chance had pulled off something of an Indian coup, although people do ask where the relationship will progress and whether or not AZB could be shooting itself in the foot with the arrangement.

For Clifford Chance the appeal is clear. "The benefit is undoubtedly the ability to offer Indian legal advice to our clients directly by introducing them to AZB and people we know and have worked with," says Popham. "We can see quality and standard of the work and it's much more efficient."

"Best friends help each other, best friends can introduce other friends to each other," he explains and says that it can decrease lawyer travel and wasted time by co-operating more closely on Indian and international pitches and work. "It changes the economics, it cuts costs."

"Save that, and just to keep the record absolutely clear," he adds, "there is absolutely no financial movement, incentive, sharing, whatever you want to call it between AZB and ourselves."

"We are as conscious as they are of the regulatory position, which incidentally is where it was in the UK up until about 1983. The ability to share between non-UK and UK lawyers was limited."

On what cards?
But clearly Clifford Chance would ultimately aim higher than that. Popham says that in the meantime building the relationship between the firms is key, "so that when - well if - regulations permit, it permits us to do something more".

He insists that Clifford Chance and AZB have not had any discussions on hypothetical merger scenarios or the integration of the hugely different equity structures – all would depend on the shape the regulations ultimately take.

"You can spend an awful lot of time looking into the future and it'll be longer than I want it to be."

However, that point is not just academic: Clifford Chance's integration with US firm Rogers & Wells at times threatened to fracture the partnership in only recent history.

The aims for now then, are more modest.

"What we've done is get to know each other to a much greater extent," he says, recalling nine months of friendship. "If [AZB co-founding partner Zia Mody] and I know each other, which is great, now all of the AZB partners have met at least half a dozen CC partners, some of them many, many, more than that."

"We much better understand each other and jointly analyse the market."

The next steps are further joint activities for the firms, ranging from business development, to knowledge management and training. The latter will see its formal debut this month, as Clifford Chance has opened the doors of its training centre to AZB associates.

Clifford Chance may not be the biggest law firm in the world anymore and the Indian road is very likely still long. But whatever you will otherwise say, the firm has clearly managed to capture the attention of the Indian market and perhaps this will even inspire a return to the firm's former glory years.

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