The war is not just on the trading floorThe winner doesn’t take it all anymore in the capital markets field. Read Legally India’s full analysis of the main players and contenders in the equity and debt capital markets.
Although capital markets work in India is not necessarily the most technical or profitable area, it nevertheless comes with major kudos and potential for relationship building. Once you float a company and do things right, it may very well turn into a firm’s client for life across all practice areas.
Coupled with the rise of the Indian stock markets and companies’ again undiminished appetite for fundraising, India’s capital markets sector has therefore turned into a battlefield for both domestic and foreign law firms. And the battle lines are shifting…
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Great article, Kian. I'd like to give my two cents on the pricing issue - since I work closely with many firms as an investment banker. Lawyer turned banker, rather. As I see it, pricing on capital market deals is varies depending on the issuer, issue size or product. International issues from seasoned issuers or with large ticket sizes will continue to draw top quality firms, and pricing pressures will be limited. ILCs have become price competitive in the recent past, but many of the white shoe and magic circle firms (with some notable exceptions) have insulated themselves from these pressures through issuer/banker relationships, or by controlling work product quality. If you compare ILC fees for top flight issuers, you'll rarely see them drop below the standard level. Of course, pricing also depends on how much the bankers push for a particular firm, or how closely the firm-issuer relationship is. ILCs that have been in Indian for long or those that have stronger relationships have a natural advantage. With respect to DLCs, I've seen a marked improvement in the quality of work product, which I think is partly due to their hiring Indian lawyers who've worked at international firms and their becoming sensitive to international practices. One DLC in particular has always been sensitive to international practices in the capital markets space. The larger Indian firms provide great coverage on legal/regulatory issues and have bigger teams and play the high-volume average-fee game. These firms have retained their market share and price competitiveness in the last two or so years. Although their transactional bandwidth can sometimes be wanting and drafting be wishy-washy, so long as they are not attending to the business sections of the deal, they will continue to retain their place. With respect of the DLCs undercutting, or underpricing rather, these firms cater to the average issuers who feel lawyers are a necessary evil on a deal. I often second that view, being a lawyer myself. All in all, its an interesting space to watch out. Over the next 5 years, we'll see some stand out firms -- but we should be ready to be surprised! Cheers
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I'd like to give my two cents on the pricing issue - since I work closely with many firms as an investment banker. Lawyer turned banker, rather.
As I see it, pricing on capital market deals is varies depending on the issuer, issue size or product. International issues from seasoned issuers or with large ticket sizes will continue to draw top quality firms, and pricing pressures will be limited.
ILCs have become price competitive in the recent past, but many of the white shoe and magic circle firms (with some notable exceptions) have insulated themselves from these pressures through issuer/banker relationships, or by controlling work product quality. If you compare ILC fees for top flight issuers, you'll rarely see them drop below the standard level.
Of course, pricing also depends on how much the bankers push for a particular firm, or how closely the firm-issuer relationship is. ILCs that have been in Indian for long or those that have stronger relationships have a natural advantage.
With respect to DLCs, I've seen a marked improvement in the quality of work product, which I think is partly due to their hiring Indian lawyers who've worked at international firms and their becoming sensitive to international practices. One DLC in particular has always been sensitive to international practices in the capital markets space.
The larger Indian firms provide great coverage on legal/regulatory issues and have bigger teams and play the high-volume average-fee game. These firms have retained their market share and price competitiveness in the last two or so years. Although their transactional bandwidth can sometimes be wanting and drafting be wishy-washy, so long as they are not attending to the business sections of the deal, they will continue to retain their place.
With respect of the DLCs undercutting, or underpricing rather, these firms cater to the average issuers who feel lawyers are a necessary evil on a deal. I often second that view, being a lawyer myself.
All in all, its an interesting space to watch out. Over the next 5 years, we'll see some stand out firms -- but we should be ready to be surprised!
Cheers
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