Singhania

Preeti Goyal prepared this case for class discussion. This case is not intended to show effective or ineffective handling of decision or business processes. © 2008 by The Asia Case Research Centre, The University of Hong Kong. No part of this publication may be reproduced or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise (including the internet)—without the permission of The University of Hong Kong. Ref. 08/380C

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PREETI GOYAL

PEOPLE MANAGEMENT, THE MANTRA FOR SUCCESS: THE CASE OF SINGHANIA AND

PARTNERS It was 9:15am on 25 April 2006. An article published in that day’s Economic Times, a leading Indian financial daily, had attracted the attention of both Mr Ravi Singhania and Ms Manju Mohotra. Singhania was the founder and managing partner of Singhania and Partners,1 one of the largest full-service national law firms in India; Mohotra was its chief executive. The Indian legal services industry had been booming since the country’s economic liberalisation, which had started in the 1990s. The exponential growth of this industry was accompanied by an acute talent crunch. The ability to hire and retain talent was becoming a source of competitive advantage, a mantra for success. The news article Singhania and Mohotra read was about the movement of partners between legal services firms. It was yet another testimony to the high attrition rate in the Indian legal services industry. Sitting in Mohotra’s office, the article provoked both Singhania and Mohotra to reflect on the adequacy of their firm’s people practices.

Indian Legal Services Industry

The legal services market covered law practitioners operating in every sector of the legal sphere such as commercial, criminal, legal aid, insolvency, labour/industrial, family and taxation law. Before 1992, a vast majority of Indian lawyers worked in small practices as Indian law mandated that law firms could neither have more than 20 partners nor could they advertise their services. Additionally, Indian corporations preferred in-house legal advisors as they were more economical compared to external counsels, further rendering the creation of large legal firms less likely. The legal services industry had competitive pricing and legal firms were mostly fragmented and competed in niche domains. With the liberalisation of the Indian economy, beginning in the early 1990s, came the foreign investors and multinational corporations. Indian law firms soon realised the importance of 1 Singhania and Partners’ website: www.singhania.net (accessed 20 June 2006).

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08/380C People Management, The Mantra for Success: The Case of Singhania and Partners

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providing legal services to these new arrivals. But, only a few Indian legal firms had the expertise to handle commercial work for multinational corporations. Combined with this paucity of expertise was the high demand for it, created by the fact that the legal system in India was very slow and companies preferred arbitration over going to court in settling disputes. These two factors combined to create an explosive demand for legal services in India. In spite of the country’s accession to the World Trade Organization in 1995, the Indian legal services market remained closed to foreign players. Various political parties were opposed to the idea of opening up this sector to outsiders. Hence the Indian legal services industry was protected—the practice of law was restricted to Indian nationals only. Under the Indian Advocates Act of 1961, foreign law firms were not allowed to open offices in India and were prohibited from giving any legal advice that could constitute practising Indian law. This prevented foreign lawyers and law firms from establishing offices in India. International law firms were allowed to function only as liaison offices, or foreign legal consultants. Law firms were people-intensive organisations and their key capability was the skill, knowledge and capacity of their employees. The high demand for lawyers that came with the liberalisation of the Indian economy, together with the continued shortage of good quality lawyers in many areas of law, meant that the industry faced an acute shortage of legal professionals. With ample employment opportunities in the industry, attrition became a real concern. Effective human resource management became essential for law firms. The increasingly competitive labour market required firms to develop creative approaches to the recruitment and reward of employees. It also brought significant retention challenges. Firms had to find ways of holding on to their employees and of ensuring that they continued to be motivated. It was a challenge for firms to create a legal practice which met both the needs of clients for a high quality service and the needs of lawyers for a sustainable work–life balance. Typically, firms increased profits by reducing the number of employees and increasing the workload of the remaining employees. Global spending on legal services in 2005 was over US$390 billion, and was forecast to grow to over US$480 billion by 2010, with USA accounting for around 49% of the global value.2 A significant portion of this market was likely to be outsourced to fast-growing economies like India because of the highly qualified, low-cost legal workforce. This area of work opened up new avenues for Indian legal professionals, creating even more opportunities for an already scarce high-quality legal workforce. The main focus of legal process outsourcing (“LPO”) was in the areas of legal transcription, document review, litigation support, legal research, intellectual property, contract related services, and secretarial and legal publishing services. The Indian LPO space was divided into captive centres, third party niche service providers and third party multiservice providers, with third party service providers dominating the space. The growth strategy for most service providers was to begin with low value services and gradually move up the value chain by acquiring and exhibiting domain expertise. The largely untapped LPO sector was in its nascent stages, providing vast business opportunities in high volume services like document review and legal publishing, and in high end services such as intellectual property and contract services.3 Regional competitors like China, Korea etc were increasingly liberalising their legal services sectors. The Indian government, though concerned by this decision of its regional competitors, had yet to make any formal decisions about the liberalisation of Indian legal services. If the

2 Datamonitor (December 2005) “Global Legal Services—Industry Profile”. 3 Business Wire (July 2007) “An In-Depth Analysis of the Indian Vendor Space along with Profiles of All Major Industry

Players”.




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proposed liberalisation of the legal services sector were to go through, and the restrictions on nationality in order to practice in India were removed, it was expected that India would witness the entry of many foreign law firms and legal consultants. Meanwhile, even more foreign investors and multinational corporations were expected to enter India in 2006. This would further increase competition and legal expertise requirements in areas such as foreign direct investment, intellectual property rights, infrastructure financing, human rights, environmental law, etc.

Singhania and Partners

Singhania grew up surrounded by his father’s corporate law and litigation practice in New Delhi, India. From his formative years, Singhania knew that he was going to be a lawyer and have his own practice one day. In 1987, while going to law school, he started his legal career with his father’s firm—Singhania & Company.4 He worked on various cases and helped manage the practice with offices all over India. During these years, Singhania became well versed with the nuts and bolts of the legal services business. His most important lessons were that customer is king and his employees his biggest asset. Singhania was able to capitalise on the demand for legal services created by the liberalisation of the Indian economy. A lot of work came to the firm from overseas clients, particularly from the east coast of USA. During 1996–1997, Singhania & Company felt that in order to effectively serve clients and gain a competitive advantage, it would be valuable to establish an overseas office; New York City was the chosen location. In October 1997, Singhania moved to New York to set up Singhania & Company’s office. Through his interactions with other law firms, he became conversant with the Western style of legal services management, which had a significant impact on his own management style. In November 1999, Singhania moved back to New Delhi to set up his own corporate law and litigation practice under the name of Singhania and Partners—a name very similar to his father’s firm. Singhania’s father encouraged his decision and advised him to take on Mohotra, who had worked with Singhania & Company, to meet the new challenge of setting up a law firm. In the beginning, it was Singhania, an associate lawyer and Mohotra in a small office in New Delhi. While Singhania managed the core legal services aspects of the business, Mohotra took responsibility for managing the overall business [see Figure 1] and the assignment of personnel to various projects based on their competencies and availability, in consultation with senior management. The marketing activities were handled jointly by both Singhania and Mohotra. Singhania’s father sought approval from clients already working with Singhania & Company to move them over to Singhania and Partners. The first few clients that moved to the firm were America Online, Fedders Corporation, Standard & Poor’s and McGraw Hill. Although the firm did not have any litigation work in hand, Singhania, realising the potential of a litigation practice, hired Arvind, a litigation lawyer, in early 2000. Sure enough, soon after Arvind came on board, Daewoo approached the firm with a litigation case, giving the firm’s litigation practice a boost. In an effort to better serve its clients, between 1999 and 2002 the firm moved to a bigger office in the same building in New Delhi and set up offices in Bangalore, Mumbai and Hyderabad. At the same time, it also formed affiliations with counsels across several Indian states in order to meet its clients’ need to interact with one face for legal services across the country. The firm grew from two lawyers in 1999 to 50 lawyers in 2006, eight of whom were partners. The firm’s practice areas included tax, corporate and commercial law, intellectual property, as well as arbitration and litigation. After the onset of the outsourcing wave, the firm had been approached by potential clients for legal process

4 Singhania and Company’s website: www.singhania.com (accessed 24 June 2006).




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outsourcing. While Singhania and Mohotra agreed that this was a booming industry, they knew that this was not their core competence and were not sure if they should try to make it one. So although Singhania and Partners did enter this domain, it did so with great caution and was extremely selective about the quality of work it picked up.

Figure 1: Singhania and Partners’ Organisation Chart

The firm gained considerable experience in cross-border transactions in the areas of mergers and acquisitions, joint ventures, due diligence, technology transfer, as well as in assisting its clients in establishing wholly owned subsidiaries in India. The practice was built in ways so as to ensure that the clients could realise value from the firm’s services. Turnaround time, accessibility to senior members in the firm, meeting deadlines and providing services in a cost effective manner were all important to clients and formed the core values of the firm. The firm’s systems, in turn, revolved around these core values. Since Indian law prohibited legal services firms to directly market their services through any means other than the yellow pages, Singhania and Partners increased business by getting work through referrals. Singhania knew that this could only happen by providing exceptional services to clients. He put systems and processes in place and used technology to provide state-of-the-art infrastructure to serve clients effectively. In order to institutionalise the systems put in place, the firm sought an ISO 90025 certification in 1999 itself, which they got in 2000. Foreseeing tremendous growth in the infrastructure and information technology sectors in India, in 2001 Singhania and Partners began focusing on these two sectors. In that

5 ISO 9002 is a model for quality assurance for production, installation and servicing developed and maintained by the

International Organization for Standardization, or ISO.

Partners • Litigation and Arbitration • Corporate and Commercial

Law • Intellectual Property Rights • Tax • Legal Process Outsourcing

CEO Manju Mohotra

Managing Partner Ravi Singhania

Senior Associates

Associates

Managers • Marketing • Finance • Human Resources • Administration

Staff




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same year, India witnessed mega infrastructure deals, with the golden quadrangle project6 being announced by the government of India. The National Highways Authority of India7 was at the forefront of these projects, and Singhania and Partners, emerging from intense competition, was appointed its legal counsel.

Are We at Risk?

When Singhania walked into Mohotra’s room, she was engrossed in reading an article in that day’s Economic Times. She asked if he had read the article. “The one about J. Sagar?”, he asked. “Yes, attrition seems to be becoming a monster in the industry”, said Mohotra and started reading the news out aloud. “‘Corporate lawyers Dina Wadia, a former partner of Little & Co.; Nitin Potdar, former partner of Amarchand Mangaldas; and Akshay Chudasama, former partner of AZB and Partners and Lex Inde have signed up with national law firm J. Sagar Associates.’ Do you think we need to worry about our people?” Singhania exclaimed, “I’d rather look at this now than wait for it to become a problem and then address it!” Mohotra, answering her own question, said, “I don’t think we need to be concerned about our people. I don’t think anybody in the industry can provide a better environment to work in than us. We have always thought of our people as our core asset and have treated them accordingly. After all, it’s our people who make us a market leader by providing quality service to clients. And accordingly we do everything to retain talent.” “You are right. When we were looking at outsourcing, the important criteria in accepting processes was our people—we absolutely refused to do processes that required form-filling sort of work because it would not stimulate our lawyers”, said Singhania. “You do think they remain intellectually stimulated, don’t you?” “We try our best. Apart from the regular work, in the bi-weekly open house we have small presentations on different topics from different legal areas. Even our junior-most lawyers are encouraged to present. It’s a great opportunity to learn, build confidence and grow with the organisation! “And if there were any dissatisfaction, I would hope for it to come out in the weekly senior management meeting or the bi-weekly open house. We encourage these forums to be utilised for voicing opinions, suggestions, ideas … Moreover, given our open door policy, anybody can walk in to any senior management’s cabin for discussions”, continued Mohotra. Singhania said, “And the career growth is all merit based. A good example is our first litigation lawyer who started as an associate and is now a partner. Moreover, we don’t just rely on annual performance reviews for increments; it is done on an as-and-when-needed basis. And, again, it is all merit based! In fact I remember that recently we increased a new employee’s salary by 50% even before he got his first pay cheque, purely because we felt he provided that kind of value to the firm. He seemed happy.”

6 The golden quadrangle project would link the four metropolitan cities of India—Delhi, Mumbai, Chennai and Calcutta—via a

national highway. 7 The National Highways Authority of India was constituted by the Indian Parliament and is responsible for the development,

maintenance and management of national highways in India.




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Mohotra pondered further, “Talking of happiness, I can’t forget the staff’s excitement when we go for the annual firm retreats. The first year when we went to Naukuchiyatal,8 it was 3 days full of fun. We played games, had picnics; it was total unwinding time. It was a great time to bond! And at our most recent camping retreat to Dhanaulti,9 everybody had a great time. I am already being asked where we will be going this year!” Singhania contemplated, “Do you think we’re paying them enough?” Without waiting for a reply, he continued, “I do believe that we are amongst the best paymasters in the industry and the year-end bonuses are substantial. And like you said, it is all merit based. All the same, Seth did leave us for more money without even talking to us about it. And he was a good performer.” “You are right, but again, we try our best. We try not to overwork our lawyers. For projects that require five lawyers, we assign seven whereas others in the industry would like to assign only three. This is because we feel family life is most important. We have also been able to provide a stress free environment to work in.” Both of them felt much better than they had felt at the beginning of their conversation. Just then Mohotra’s phone rang It was Seth. Putting the call on speaker, Mohotra replied, “Good morning Seth. How are you?” “Fine thanks. Do you have a few minutes?” “Sure.” “Well, it’s a little awkward, but I’ll be straightforward. Would you be open to bringing me back on board?” Singhania and Mohotra silently agreed. “We could talk about it, but I would like to understand the reasons for your decision.” “Well, the foremost reason is that I miss the environment of Singhania and Partners. And … could we meet to discuss?” “Ummm…I am travelling this week, so, would you like to come to the office sometime next week and we can chat about it? Say sometime next Tuesday?” replied Manju. “Sure Ma’am. Is 10:00 am convenient?” Referring to her dairy, Manju replied, “Yes it is. All right, I’ll see you Tuesday, 1st May at 10:00 am then.” “Thank you, ma’am. See you then”, said Seth, concluding the conversation. Mohotra and Singhania looked at each other and smiled. Preparing to leave, Singhania thought out aloud, “We seem to be fine for today, but what about tomorrow … especially with all the talk about the entry of foreign law firms into India?”

8 Naukuchiyatal is a lake resort in the northern Indian state of Uttranchal. 9 Dhanaulti is a camp resort in the northern Indian state of Uttranchal.



Singhania

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