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Breaking: AZB, Clifford Chance end best friendship

CliffordChance-London-officeExclusive: 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.

For further analysis of the relationship and why it ended, click here.

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By reading the comments you agree that they are the (often anonymous) personal views and opinions of readers, which may be biased and unreliable, and for which Legally India therefore has no liability. If you believe a comment is inappropriate, please click 'Report to LI' below the comment and we will review it as soon as practicable.
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Like +0 Object -0 notsolegal 22 Jan 11, 08:36
I'm curious to know....what will happen "Break ke Baad"????
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Like +0 Object -0 Anonymous guest 22 Jan 11, 20:53
at one level, this really reflects badly on zia [...], but other independent firms like amarchand, JSA etc should worry since, foreign firms will once again have an interesting referral option which had been closed off. I think that what CC will do is to set up a surrogate firm much like Freshfields, Linklaters have done. they really have no other meaningful option. AZB of course will take a long time to rebuild their credibility as a thoughtful serious firm. they should not confuse short term success with a long term strategy which is completely absent.
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Like +0 Object -0 Anonymous guest 22 Jan 11, 20:55
this atleast clearly settles one question, as to who is the real visionary and leader of the indian market?? Zia and Cyril used to be talked about in the same breath, but now the debate is settled. He clearly thinks through issues alot more and is motivated by the right things. no question about that. once amarchand gets its act together, the others have no chance.
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Like +1 Object -0 Anonymous guest 22 Jan 11, 20:59
YAWN!! stale news. this was expected for several months. Partners at CC were openly complaining about the lack of mutuality. With the departure of Stuart Popham and Chris Wyman, this was a matter of time. AZB had no intentions from day 1 of forming a genuine partnership. she only wanted know-how and referrals without offering anything in return. such marriages always fail. better a broken engagement rather than a divorce.
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Like +0 Object -0 Anonymous guest 23 Jan 11, 01:03
Why is Cyril always credited with Amarchand strategy and not Shardul? After all Cyril inherited a practice but Shardul built one from scratch in Delhi (albeit with the help of his father in law who was CJI when they began)
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Like +1 Object -0 Anonymous guest 23 Jan 11, 01:56
“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

This sums up what AZB really wanted from this deal and this is also where both sides failed to do a proper commercial diligence on each other's capabilities before signing up.

AZB (read Zia) messed it up big time. For CC it was an absoluitely right entry strategy but a totally wrong choice of partner.

In this entire debate, let us also give a thought to those junior associates / support staff in AZB who thought (and were promised so) that they have become a part of an international law firm and all set for glory.
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Like +0 Object -0 kianganz 23 Jan 11, 02:05
Dear All - comments are not working well at the moment in certain browser. If you find that the rotating arrow animation keeps continuing when you press post but no orange confirmation box comes up, please try to refresh the page and then repost. Otherwise, please post the comment in the Quick Message box in the left hand column of the page and we will post your comment for you.

We are currently investigating the issue and hope to have it fixed soon.

Apologies for any inconvenience caused.

Best regards,
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Like +0 Object -0 Anonymous guest 23 Jan 11, 02:54
At a basic level zia failed To deliver key relationships like tata and reliance which were continued with their traditional forms. And cc just did not have the fire power to compensate the loss of referrals. It became a relationship with only disadvantages.zia quickly extracted the systems and know how. And dumped cc. That in a nutshell is the story. Amarchand is smiling big time on how smart it was. But we will come fighting back .Cyril should take a bow though for his courage of conviction all along. [...]
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Like +0 Object -0 Anonymous guest 23 Jan 11, 03:00
On the Cyril versus Shardul thing no doubt that both are important but the whole world knows who the real [...] visionary is. They make a good team though. After licking her wounds zia will bounce back. So amarchands should not get smug . We are going to see lot of entertainment in the Amarchand azb rivalry now. Also the surrogate tie ups will come scrutiny again.
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Like +1 Object -0 Anonymous guest 23 Jan 11, 04:13
Surely people saying good things about vision of Cyril and Shardul are correct to the extent that they did not enter into a similar deal with CC or anyone else in 2008, but to give AZB their due, Zia had more courage to enter into a deal and then even more courage to call it off when it did not fir with her plans. Full marks to her. She is better off with her experiences from this deal. Her people are better off by the exposure they got to one of the best firms in the world and the friends made there.

AMSS did not try not so much because of vision but because that would have meant the succession to children being put into question. Not for a moment did AZB put the interests of their children over and above doing a deal. Zia deserves the credit for having done this deal in the first place and then calling it off.

CC should have either found a smaller partner or set up its own captive in India and considering that CC was the single biggest employer of Indian lawyers in UK, this would not have been difficult to achieve. Now watch the space!
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Like +0 Object -0 Anonymous guest 23 Jan 11, 04:29
Regrettable state of affairs for AZB but AMSS has been quietly doing the same thing with a few firms, although they have not made much noise about it. In certain respects at least Zia has the courage to try whereas Cyril is content to sit back and enjoy the status quo.
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Like +0 Object -0 kianganz 23 Jan 11, 05:01
There is one person who has been trying to post close to a dozen comments in variation on the same theme, purporting to be an AZB lawyer, a rival lawyer, a Clifford Chance partner, and others. Please feel free to express your opinion in this thread (subject to technological restrictions) but do not pretend to be someone you are not - even though it's anonymous, there should be certain standards of ethics and normal debate. And try to make your point in one or two comments or in responses, rather than spamming one-sided comments in succession. Thanks!
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Like +0 Object -0 Anonymous guest 23 Jan 11, 06:06
Will anybody really know why the break up happened... It is incorrect to say azb wasn't giving cc enough deals.. People who work in azb know that the partnership was probably working mutually for both. Azb top level was committed to give cc its commitment. I don't think the tie up was a mistake.. I think azb expected a lot more from cc then it got. Doesn't necessarily mean its decision was wrong.
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Like +0 Object -0 Anonymous guest 23 Jan 11, 08:08
I always find it interesting that whenever there is news of a top law firm's break up with another legal entity, the posts are either defensive or smug with an almost I-told-you-so attitude. While everyone is entitled to their opinion (especially the new generation of lawyers who are smart, confident and willing to take on challenges),one should never lose sight of some facts. People who are heading the top law firms have been true pioneers in their field. Law in India for the better part has been the traditional chamber based practice and each of these firms was started (with or without help) in a very traditional and tight legal environment. Not only have these firms survived but today all new lawyers would like to be associated with them. Therefore please give people their due and realize that whether it is an Amarchand or an AZB, it has been the sustained efforts of people at the helm of these organizations who have had the vision and foresight to make them brands. Therefore even a setback (which is part and parcel of every professionals career)should not be evaluated from a narrow perspective. Even the most well intended decisions could have repercussions which could not be foreseen.
Careers, especially in the legal field should be assessed carefully by evaluating the true credibility of a professional, which can be established only over sustained spans of time. People like Cyril, Shardul and Zia have surely proved their mettle.
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Like +0 Object -0 Anonymous guest 24 Jan 11, 02:30
I have always wondered why they needed an agreement to say they are best friends?? Had read that CC paid a huge sum for this 'best friend' relationship. Does AZB return this?

AZB ended merger with Anup Shah and became 'best friends', now ended best friendship with CC and has become 'good friends'. The terminology used to justify each relationship (or lack of it) is quite hilarious.

#2, who are surrogates for Freshfields and Links?
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Like +0 Object -0 Anonymous guest 24 Jan 11, 04:21
Mr. [...] from Hyderabad has recently been hired by AZB, Mumbai. This should have been reported but Legally India is reporting all this foreign firm related news.

[Please don't use Legally India comments to write personal nonsense about other students. Thanks. -Ed]
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Like +0 Object -0 Anonymous guest 24 Jan 11, 04:41
Leaving Trilegal with the pre-eminent international relationship in India. To most Indian lawyers in London, their relationship with A&O appears to be the most sustainable.
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Like +0 Object -0 Anonymous guest 24 Jan 11, 04:58
#14 Looks like your skin is big time in the game with the family ownerships! All the best for you and you keep praying that markets never open..

#15 How come you know all about money being paid to AZB but do not know surrogates of Links and Freshfields?

#16 who is [...] anyway?

#17 the relationship between A&O and Trilegal is as stable as the relationship between a headquarter and an outpost, with no one working in Trilegal having ever worked in A&O or any foreign firm
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Like +0 Object -0 Anonymous guest 24 Jan 11, 09:44
OMG what happens now to that PIL against foreign law firms? didnt he challenge the CC-AZB best friend relationship? LI pls update us on the case. you are a supporter of SILF and moily, so pls tell us.
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Like +0 Object -0 Anonymous guest 25 Jan 11, 04:15
Dear All Lawyers, what are the risks if I click to show comments on this site? I hope it has nothing to do with medical health!
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Like +0 Object -0 Anonymous guest 25 Jan 11, 10:47
#18.. The money paid to AZB was part of the annual returns filed by CC with the English law society. In England these things are transparent and subject to regulatory filings..

So who are you accusing of being surrogates of Freshfields and Links??
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Like +0 Object -0 Anonymous guest 26 Jan 11, 21:12
No 21 - can you please give the weblink of the English law society webpage which has the proof of AZB being paid money
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Like +0 Object -0 Anonymous guest 27 Jan 11, 01:44
"AZB & Partners and Clifford Chance broke off their best friend relationship yesterday night to become “good friends” after both firms..."

Kian, does "last night" sound better than "yesterday night"?

Sorry to be picky...but last night a DJ saved my life. No, really.
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Like +0 Object -0 Anonymous guest 12 Feb 11, 12:29
With a huge cultural difference between how the mindset of AZB works in hiring and treating their own Indian lawyers versus UK firms and the way the work is distributed (read nepotism); how associates are routinely under used and waste their initial years on 'due diligence' and finally not to mention - the coke refrigerator being literally chained and locked - speaks volume of how the so called top Indian firms operate and value talent. No wonder CC was a total misfit with AZB - despite the other factors as mentioned....
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