Luthra and Luthra Law Offices, one of India’s oldest and largest law firms, has come under intense scrutiny over the past three years with questions about the sustainability of structure and business model, as well as the firm’s founding partner, Rajiv Luthra. , and his management of the company.
Last month, bowing to the scrutiny, Luthra and Luthra changed their name, naming themselves – or actually renaming themselves – Luthra and Luthra. For a short time, between 2018 and this year, it was known as L&L Partners, and at the time the firm told local media that “L&L” was more representative of its partnership.
In its most recent press release, the company called its latest rebrand “The Big Comeback”, noting that keeping its dual namesake “Luthra” is telling – it says a lot about the company.
The scrutiny really started to mount in 2020, when Rajiv Luthra kicked out former senior partner Mohit Saraf over arguments over lack of share split. At that time, Luthra owned 99% of the capital of L&L, which was divided between two companies, one focusing on corporate work and the other on litigation.
Saraf talked a lot about the spat and then took Luthra to court, who ruled the eviction was illegal. This allowed Saraf to poach clients, lawyers and L&L staff when he based his own firm in 2021. Dozens of lawyers began leaving L&L as the Indian market boomed. Luthra’s rivals grew stronger, forcing him to finally make some relevant changes.
“What happened in the last two years, was it desirable? The answer is no. Did we want it to happen like this? The answer is no,” Luthra said. “But the beauty is that it happened.”
In its new incarnation, Luthra has hired Lalit Vij as head of firm business management and brought in Ashish Nanda of Harvard Business School and Valerie Bowles, managing partner of Silk Legal Consulting, as consultants, responsible for assisting the firm in its restructuring and reorganization. The company also now has a new executive, leadership and sub-committees to drive corporate strategy and address issues around corporate culture, hiring, talent development and retention. , footprint and expansion.
But perhaps the biggest transformation, at least for Luthra and Luthra, is the dilution of corporate equity. Rajiv Luthra says he gave away 25% of his coveted capital in July last year, and the intention is to further reduce that ownership, to 30% or 35%.
“The trigger was the need to make it an institution,” Luthra said, referring to the company.
It was not the first attempt for this type of change. L&L actually hired McKinsey seven years ago to help with its restructuring, Luthra said.
“The McKinsey consultants traveled at our expense and spent five or six days in our various offices. They wrote a report on how to institutionalize the business, but it didn’t work out due to various situations,” Luthra explained. “But I’m not looking for excuses, I know I’m the captain of the ship and I should have made sure this happened.”
Many of the partners objected at the time because it would have meant they would lose power “and they didn’t like that,” Luthra added.
The departure of 63 lawyers from the firm’s litigation practice in July was also a manifestation of discontent.
This practice had been established as a separate entity from corporate practice, but Luthra owned and controlled a majority state in both. The creation of a litigation arm was sealed “with a handshake” by a small group of litigators about 30 years ago, Luthra said. The firm had long operated with a separate profit pool, but earlier this year Luthra dissolved the litigation firm, hoping to merge its litigation practice lawyers into its main corporate arm. Instead, many have chosen to leave for the competing firm DSK Legal.
“When you have different legal entities, it starts to play into your culture and the way you operate,” said Vij, Luthra’s new head of business management. “Although from the outside it looks the same, some divisive issues continue to emerge, which doesn’t feel like ‘one company’.”
Too little, too late?
Certainly, Luthra and Luthra is not the only Indian company to have gone through upheaval. The Shroff brothers – Cyril and Shardul Shroff – parted ways with the Amarchand Mangaldas legacy Cyril A. Shroff & Co. will establish separate firms in 2016. Another leading firm, Nishith Desai Associates, which is widely known in the local market as a sole proprietorship, has suffered numerous departures in recent years. lawyers.
In many ways, the disruption of the traditional methods of long-standing law firms has spawned younger rivals. Especially since the Indian market continues on a path foreign investment and blockbuster domestic transactions, incumbents are finding it essential to resolve their issues, and to do so quickly, in order not to lose further market share.
Luthra and Luthra are making progress, says its founder, having recently reconstituted its partnership with senior lawyers from peers such as Shardul Amarchand Mangaldas & Co and IndusLaw. The company is also starting to think about its cross-border footprint. Luthra says New Zealand is a possible target as it leverages the company’s strengths in projects and project finance work.
“We are probably the first company to see that India is in desperate need of natural resources,” he said. “It’s only a matter of time before we run out of natural resources, and New Zealand has plenty of them.”
By being in New Zealand and having the knowledge to support large acquisitions of mining and resource companies like gold and oil, Luthra and Luthra “could have a first-mover advantage,” the founder said. of the company.
Who is Luthra really?
For the Indian market, Rajiv Luthra is a name both revered and feared.
The founder of the law firm started as a tax consultant and established his own tax consulting firm. At the age of 31, he continued his law studies in the United States. He started his own corporate law firm in 1990.
It’s a story of rags to riches, but Luthra’s story isn’t just about the immense power he amassed, he argues. He says he invested heavily in the business so the practice could survive him. The COVID-19 pandemic presented a prime example of his leadership, he added.
“I haven’t taken a rupee from the business for two and a half years,” he said. “I just kept hoarding this as a war chest to survive.”
In the months leading up to the pandemic, Luthra said it offered the partnership to invest in a new server to gain efficiencies. The partners came to a consensus and rejected the idea, but Luthra overruled their vote and accepted the investment. As a result, he said, the business was “lockdown ready” when the pandemic hit.
He thinks he knows better.
“I never had a boss, I never worked for anyone in my life,” he said. “While it could be good or bad, I don’t know, the jury is out on this. But I do know this: I’m not limited by someone else’s knowledge.
“I joke about it – I bring in a satiated benevolent dictator, the father, and that’s me,” he said. “They can’t intimidate me because I’m sovereign.”