Former Mumbai-based Nishith Desai Associates (NDA) lawyer Karan Kalra, has started up his own law firm, called Bombay Law Chambers (BLC), specialising on venture capital (VC) and corporate advice, in addition to a novel twist on the model of him becoming an external quasi-general counsel (GC) to funds and corporates.

Dipanshu Singhal, a 2014 SLS Pune graduate whom Kalra had worked with at NDA for six years, had come on board as a partner and co-founder, agreeing to take a share in the equity partnership, according to Kalra.

When we spoke to Kalra last month; he had just left NDA on 31 March, and set up his firm on 1 April, in what were then the early days but actually were, in retrospect, the ides of the Covid-19 lockdown.

The driving factor for the 2007 SLS Pune graduate to set up his own firm was an “urge to be an entrepreneur”, he said, and by the time the lockdown had hit, despite Nishith Desai having offered him to stay on and delay his departure, according to Kalra, he had already “put too many things in the works to stop this” process of going independent.

Besides, work had begun coming in “more than I thought would happen in the Covid situation”, as well as “a lot of conversation, a lot of traction”, Kalra noted.

In respect of NDA, he had nothing but praise. “I owe a lot to that place,” he said. “It let me grow my practice, let all of us grow our practice.”

NDA was “a great place to be”, which is why he had stayed there for a decade. “There must be a reason there are no senior exits after Siddharth [Shah and Bijal Ajinkya joined Khaitan & Co in 2013],” Kalra mused, about Shah’s team that he’d used to work with. (Technically, that bit about senior departures to other firms at least seems fairly much point. The only other recent partner-level departure we had reported was the firm’s TMT leader Kartik Maheeshwari having joined Netflix a year ago).

GC-style model for VC-style clients

Kalra’s business model at BLC, meanwhile, was aimed at filling specific “voids”, he explained.

On the one hand, the firm would offer “corporate advisory” services as its core focus, much like most other transactional law firms.

“I do believe that the top end quality advice in the venture space is limited,” he said, albeit some “great lawyers” being active in the space. However, most venture capital (VC) lawyers were hoping that a small start-up they’re working with would become “a giant” one day and therefore some lawyers might not be putting in their best efforts at such an early stage for smaller players.

The second void Kalra hoped he can fill would be to provide an “external GC model” to the “investor community”, as well as to start-ups and corporates, providing a legal “decision making role can’t be afforded by most companies”.

“The fact of the matter is, it’s problem solving: legal as a problem solving function,” he said, noting that usually that mindset was not necessarily there in in-house departments or for external lawyers.

Kalra said that he would personally be handling such GC-style legal work, with the value proposition being that the cost could be around half of what a company would pay for equivalent services from a top tier law firm partner and team.

So far, three VC funds have retained Kalra as such an external GC, he said - though he could not publicly confirm their names at this point - as well as “a handful of corporates”.

Notwithstanding such early successes, there is a limit to the number of such retainers he could take up. “The last thing I want is to over-commit and under-deliver,” he said.

But can money be made with such a model, particularly if you are not looking at volume? “Finance is a lagging indicator,” Kalra said. “My paperwork shows, if we do things right, I [can] make money.”

A tweak...

Kalra is not the first to experiment with the external GC model.

In 2016, we had covered former Unilazer Ventures GC Archana Rajaram leaving to become external GC to a bunch of VC funds. However, after just a year, Rajaram Legal had pivoted its business model and is now one of the busiest VC firms by volume, according to our league tables database (which is still being updated for the 2019-20 financial year).

“Archana is a dear friend,” said Kalra, with both having also been colleagues at NDA before, but he noted that their models were different (even before her pivot). “Her focus was more on: you don’t have an in-house legal team, we’ll do everything and that was stemmed on the fact that a lot of relationships existed [between her and funds].

“I‘m looking at other end of the spectrum: I don’t see associates doing external GC work, it’s the decision-making stuff [I would be doing].”

By way of example, he said that if a large start-up were looking to change its headquarters, for instance, Kalra would aim to be the main legal “point of impact” to advise strategically on such a move and all the legal issues involved, as well as instructing third-party law firms and partners if required for such work, rather than just handling it within BLC.

Overall, that would create a cost saving to the company, Kalra said, as well as better service.

Starting small

Probably sensibly in such difficult times, Kalra said he was “starting small”.

Besides Singhal, there were four full-time fee-earners, of whom three had between 1 and 4 years of post-qualification experience (PQE), while one counsel in Bangalore had recently joined with 12 years PQE.

“I don’t know whether my sweet spot is 10 or 8 or 12 fee-earners,” noted Kalra, but added: “I‘m not worried about keeping people constructively occupied, there is enough to research and everyone’s busy.”