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MSM reports end of Amarchand but how exactly CAM-SAM will (and won't) compete remains slightly mysterious

After the mediation panel aggressively discouraged the main stream media (MSM) from reporting the mediation between Amarchand Mangaldas co-managing partners and brothers Cyril and Shardul Shroff, the news that the split was now official was was eagerly picked up by the press, confirming much of what the trade press such as Legally India has been reporting for the past six months.

While The Hindu Businessline headlined somewhat optimistically that the brothers “buried the hatchet” after the mediation (despite becoming competitors in earnest now), it and the majority of papers simply basically reported the press release issued by the mediators.

Two went more in-depth. The Economic Times reported that while Shardul continued to be in negotiations for a merger, no talks had reached any conclusion, according to an ET source.

Shardul did not respond to requests for comment from any newspapers.

The Economic Times and CNBC-TV18 both carried interviews with Cyril Shroff, who laid out some of his strategy going forward.

Cyril refused to be drawn by CNBC on whether Cyril Amarchand Mangaldas and Shardul Amarchand Mangaldas had a non-compete going for either clients or employees. He said: “We are full competitors and we are both mature people and will not do anything to destabilise each other. That is probably the best answer I can give.”

In terms of clients, both brothers would be “full competitors”, he said, adding, “I have no further obligation not to compete. As with any other compare in the market, we are both mature firms. Even in the re-incarnate.”

When pressed on whether there would be 100 per cent competition, he said: “We are mature enough not to do anything silly.”

Cyril told the ET:

I am at peace and full of energy for the future. So I am happy. Money does not matter to me or my family. So there is nothing to be unhappy about. To me it’s important that my father’s legacy will guide me. I wish my brother good health, peace and success in life.

The firm would be the largest in India on the day of launch, he told CNBC, adding to the ET:

On day one, Cyril Amarchand will have 580 lawyers and close to about 91 partners: 61 partners from legacy and about 30-32 new partners. I think that will position us almost right at the top. The new firm Cyril Amarchand despite the fact that it has got divided, will still aim by 2017 or 18 to be a 1000-lawyer law firm. In doing this process, we are not doing mergers, we are (sort) of cherry picking from the market in terms of best talent. The idea is to recruit the best talent in the market and continue to be the dominant firm.

Cyril said he would not open a Cyril Amarchand Mangldas office overseas “by design” “until such time I have done what I need to do in India” and that he had already hired at least 30 partners, with a view to diluting equity held by the family:

We have tweaked it into a much sophisticated model. It is still a two-tier partnership of salaried and equity but we have identified various ways of working the lockstep and in terms of sharing the upside with the partners through various profit-sharing instruments. But now the philosophy is, family is very committed to diluting and bringing down the family share in order to build a robust partnership firm.

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