In conversation with Bahram N. Vakil, Founding Partner, AZB & Partners

Welcome Mr Bahram Vakil to this BW Legalworld dialogue. We are delighted to speak with you today. I’d like to start by asking you 

How have been your last 120 days? I know that your firm has been busy with some very big deals, but both on the professional and personal level, how have been the last 120 days? 

First of all, I want to thank you for this privilege and delighted to talk to all of you. I think you know like anyone would say, it has been an unbelievably difficult last 120 days. Nothing that any of us could have imagined—unfortunately the situation is that there is still no visibility. But, as a firm, we decided from day one, that health comes first. If you don't solve the health issue, the economics is going to flounder. So you have to do both, no question. First, you have to help SMEs and poorer people but you have to also take care of the spread. We have done the same thing on a very tiny scale at AZB. We have been very cautious, it's all work from home and I am very proud to say that from the first weekend itself, our IT system was extremely robust, tested and by God's grace, there’s not been a single glitch in this entire period, which has allowed us to work as seamlessly as possible. I mean all of us miss the camaraderie of an office but it has been amazing. So, our administrative staff and IT have done a fantastic job across all the cities.

You’ve raised a fundamental point about lives and livelihood. It is a debate going on for the last 4 months. And you rightly said without safeguarding lives there is no livelihood. We should focus on that. As we see, the legal profession has evolved at a certain level, it has become very business-like at one level but at the end of the day legal practice is also a service. It started as a service to help people. Are law firms and legal professionals able to balance the societal objectives of law being a service vis-a-vis law being a business?

That's an amazingly tough question, I compliment you, but again very quickly, to give you a perfect example, you put it so well, lives and livelihoods, if you are not confident of the health issue—are you going to go to the restaurant? So we’ve said that restaurants, retail, all these, the malls, you open them up, but if you're scared, you are not going to go. Travel and tourism has got hammered and again unless you are feeling confident, will you get on the plane and fly? So that is inextricably linked, but I don't want to duck your very important question, in fact it takes me back to when I started my career in 1982 and at that time it was very very much a profession. In fact, my job is almost unrecognisable from what I did in 1982. I went to court at least 3 times a week, the largest law firm then had 25-30 lawyers, so it was very much a profession. There was corporate law, business law but it was hardly evolved at all. It must have been a tiny percentage of every law firm. It was the traditional areas, mainly litigation, real estate, employment, some amount of capital markets, so I think we have morphed and in some ways, if I have to be honest, maybe for a lot of firms who focus on commercial law, as we do, the pendulum has swung too much at the other level. Because we should not forget that at the end of the day we are a profession and we are professionals. I will probably keep saying  this through the interview but a balance in life is always critical, you can't take a view that you will not be client-friendly, client-facing. Service means the client comes first, but you have to draw the line somewhere.

You studied in New York, in Columbia University, and graduated in ‘82-83. Then you worked with a very reputed law firm there. I keep saying that growth is a function of opportunity, not necessarily a function of just talent. Please tell us the kind of mentors, role models seniors that you met both in your education and then in your first job in New York that helped you become the professional that you are. 

Absolutely spot on—Columbia and Debevoise—my years in New York, that was a fantastic learning experience, I have to say New York in 1982 was a very hard place, especially the Columbia area, it was pretty dangerous to be honest. So when I moved to San Francisco and someone said it's a tough neighborhood, for us it was like a joke once you had lived in the outskirts of Harlem. Similarly, in Columbia there were professors that left a lifelong impression on you, there was Harvey Goldstein who taught me Corporate Law. I think he got the best professor in law school for several years. He was a practicing attorney and then there was Reese, who was very famous. So those people left an indelible impression and Columbia itself, while it was academically super tough, no holds barred, very very competitive, no one would share notes with you etc., very New York style but It was also top calibre and I should thank them for my job at Debevoise. The placement office had asked me in the first week when I joined, “Would you like to work in America before you go back?” and I said I am in two minds, so he replied, “You be in two minds after you get a job, first you make your CV, we will help you make a CV, start your interviews.” And I had my job with Debevoise by God's grace before Thanksgiving and that was all the Columbia push. Coming to Debevoise and Plimpton again a top firm, they were super in quality and they were a very old fashioned firm, much like Little & Company. Just one example, Mr Debevoise was at the door to receive me, I mean you are talking about a 25-26 year old first year associate walking in the door and the named partner is standing at the door to meet him. That's the kind of graciousness of that firm. I was also the first Indian Debevoise had ever hired, so he said, “I'm telling you this, so that you don’t feel pressured” and started laughing. At that time, the number of Indian lawyers in New York, you could almost count on your fingertips. We had that advantage and Zia was two blocks away, we used to meet regularly for lunch and the seed of AZB was kind of fermented there, thanks to New York.

After New York you came and worked in Bombay, in Little and Co and you made a name for yourself there as well. You became the youngest partner. So tell us about your days at Little and Co and how did you become such a young partner and what is your advice to young professionals who start out to become partners at big law firms?

First of all I should be honest that the times are much more competitive now. As I said it was a smaller firm. At that time the three dominating firms were Little, Crawford Bayley and Mulla & Mulla. Very family feel kind of firm and you know when you are that few, it’s a fantastic feeling and we had the benefit of that. My mentors at the firm were the senior partners there, Mr Dara Mehta, he’s still there, he is still practicing; the senior most partner, Mr Govind Desai, a brilliant man; Mr Jimmy Shroff; and Mr Ravi Kulkarni who is a senior partner today at Khaitan. So from there I learnt the troika, which is so rare that they are intellectually top class, integrity absolutely crucial, but also fantastic human beings. So that combination and the basic grounding, the basic values, the teaching from there, those 20 years were very memorable years of my life. And a lot of lessons I learnt there, of course, I carried over to AZB.

Before AZB, there was CZB.  You mentioned the seeds of AZB were sown because of you and Zia knowing each other, meeting in New York; however, how did the transition from CZB to AZB happen, and what made it happen?

Just to be clear, I have known Zia since I don't know, when I was 6 years old or something. It is a very close family friendship, our parents were very good friends  but professionally that was the first. How it all happened is a very funny story, I’ll say it in as discrete a way as possible. One of our top firms, very sensibly decided when they were looking for lateral partners and growing that they will take three good friends and take them onboard simultaneously. So two of them were Zia and myself and the third was one of my closest friends. That  did not materialize and when it didn’t materialize the third guy said to us that “listen this did not work out, but why don't you guys, the two of you think of setting up a firm?” and that's when we took it seriously. I think very soon thereafter we had lunch together and that was it. But I went back to Little, a very difficult decision, very emotional decision as I said, truly it was like a family and they were of course very upset and so one of the things they did, I guess, hoping I’d change my mind, is they made me observe a one-year leave-notice-period. So when I went back and told Zia, that we’ll do this, but I’ll come back to you in a year, knowing Zia’s level of speed, she must have thought this guy is totally crazy and he’s never going to show up. In all fairness, she at least appreciated and understood. And once the year ended, things moved very fast. But again I should say, the day I left Little, was one of the most emotional days of my life.

To answer your question on the CZB part is very easy. She was CZM, Chambers of Zia Mody. She started her career as a barrister and then quickly went back to corporate, because in New York she was with Baker McKenzie. So CZM had just changed to CZB because I came so it became Chambers of Zia and Bahram. But on day one, we wanted to build a broad full service law firm pan India. The plan we had was that in three years, we should have a practice in at least Bombay, Delhi, Bangalore and we should be around a hundred lawyers to be a serious player in the Indian legal market. Again by God's grace that’s exactly what happened. We were about 105 in three years. Then we were very fortunate to get Ajay on board, and that's how the name changed from CZB to AZB, Ajay, Zia and Bahram. And that’s the story.

Mr Vakil that brings us to an interesting question. Mr Bahl mentioned that you are the one who keeps everyone’s nerves calm in the office and you are the balancing factor in the firm. Would you please tell us how you stay so Zen?

I think he’s being very kind. I should say that I am very blessed. I think all of you know that they are the two superstars and of course our timing was fantastic. 2004 to the Lehman-period were the real glory years across the world and, of course, in India as well. That's how we had a fantastic start to the firm and in some ways like The Beatles had two superstars John Lennon and Paul McCartney, Ajay and Zia are them, they are very musical too, but then you have George Harrison who is more spiritual, who is more Om Shanti Om, so yes I am a very spiritual guy, I am a very religious guy, and I believe one of my biggest strengths is interpersonal skills and I love people, so it's quite easy for me. I have to say it’s kind of God given and so I play that role, and I am very lucky to have played that role.

A lot of people would give an arm and leg away to build a firm like AZB. You created a perfect harmony, you have given us a perfect example of being in a band together. So what has made AZB such a big force to reckon with. What makes AZB such a formidable legal collaboration? What’s the secret sauce of your firm?

In any professional firm, the secret sauce is only people. You are as strong as your junior-most member and I think there we are really blessed, we’ve always been focused on that. From day one even when we were about 25 lawyers in Bombay and 25 lawyers of Ajay’s team merged with us to create AZB, we had top quality people, top class people in every way and we have been focused on that. Our mantra has always been quality, not size. Even today are we the largest law firm in India? Certainly, not. But we like to think that we are in quality, second to none, we always focus on that. And so it's the team and right from our first year associates to our partners and support staff—all of them are fantastic people. And the second thing all three of us have said, and again for me personally I’d say it is one of the learnings from Little—keep politics to a real minimum. When you are a small team, it's very easy, it's automatic bonhomie, when you become as large as we are today then all this politics and groupism starts. So, right from the top, we have said that you know we are dead against politics and please keep it that way. It is long hours, all law firms have very long hours, please keep it as friendly, as cordial as you can so you actually enjoy your work. That's really the secret sauce—the people, the terrific team that we have. And we are very young, I always joke, I’d say we are very young in two ways, one is that amongst our peer group, you know AZB was formed in 2004, so we are a very young firm if you compare with SAM, CAM, Khaitan, all of them  are decades older and second the average age of our 440 odd lawyers will be the average age of India, under 30. So it’s a very open, friendly firm, and genuinely anyone can walk into any of our offices and speak their minds very freely and that's not a cliché, anyone in AZB will confirm that it is true. 

We can’t let you go without asking you—we have J.B. Dadachanji, Mulla & Mulla, and many more—what is it with the Parsis and the Law that they do so well? 

That is very kind of you to say, but I think it has more to do with Parsis and profession. I don't want to talk too highly of my community, very tiny community, but in doctors you would find the same thing. There are lots of top doctors Udwadia, Soonawala etc. So, you’re right JBD was a giant of a man. So doctors, lawyers, even accountants like Mr Malegam, so profession was a very big thing for Parsis. 

Perhaps because it's such a small tight-knit community, education was a very big focus for all of us and in many ways a profession more than business. Of course, Tata, Godrej being the obvious example but I can't agree with you more. I mean even in counsel practice Sorabjee, Nariman, I mean there are so many, so many.

I think all of them bring a passion to the job, passion and hard work. Those are the two things you need the most in law. I’m sure it’s the same for doctors. You have to have that combo, you have to love what you do, given how much time you have to spend doing it, and, of course, all these are giant intellects, so I think that's what they bring to the table.

As we know there are law firms who are looking to retrench even though they were holding on until now. We know your law firm is not looking to do that but other law firms who are looking to downsize because the economic activity has come down and hence in some sectors the M&As have come down, overall economic expansion has come down thereby impacting the legal activity. Do you have an advice on what law firms should do to be able to deal with this? Where do you see the economy going? How does it impact law firms in general? 

Very tough, good question. I am an optimist by nature and I have to say,  I hope you'll agree with me, that it's temporary. We cannot precisely predict but I think the bottom line is when the vaccine comes, that would be the game changer to my mind, but it's temporary. So yes you are right, will we have a GDP contraction this year? No question. I think it's between minus 5 to minus 7, in that range.  Will we have a very strong bounce back? I am equally certain of that, there is no question of that. So medium to long-term, India’s story doesn't change. My advice is as far as possible, do not downsize. If you can stand the pain, temporary pain, that's the critical word, don’t downsize because the good times are coming for sure. As a firm, we, by God's grace of course, will withstand it, no doubt about that, and we believe that the best way to do it as we see it is—we’ve taken the ‘inverted pyramid approach’. Equity partners have the largest capacity to withstand so we have not cut salaries for any lawyer, any staff member and I pray that we will not have to. But of course, equity automatically takes a hit, profit nahi hai toh (when there’s no profit) where’s the question of equity getting any share? So that's the way we have gone and then hopefully next year will be a strong year. Take the pain, and take the gain next year. 

This too shall pass. It’s a temporary pain, so take the pain and stay in the game. One more aspect we’d like to speak about today is, when you talk of corporate law it is tied to policy making, there is a huge compliance angle with intersection of various domains. Unfortunately the Indian policy regime has seen flip-flops. On the tax side there have been multiple interpretations of some very solid policies. What is your advice to policymakers to combat inconsistencies in the policies.

So, I love your question and I love your wording. In fact, I think one of the best things in my career is this intersection between law, policy and economics, and I have been privileged to be a part of the policy making, I’m talking about IBC. So, I think in some ways this criticism is justified and in some ways it's not, because globally if you talk about tax, the only part that I agree with you is the retrospective part. Yes, no question, it should not be retrospective. But there was one, or maximum two instances and it has been blown out of proportion. In a country, in long decades, if you’ve done a mistake once or twice, it’s not such a big deal and every country does that. When you say that everyone says we're not looking for a tax haven, we want a stable tax regime, we should have a clear visibility. But you tell me, in the UK, in the US, in Europe, where do you find that the tax regime does not change? It’s not my forte, it's Ajay’s forte and passion. But, I’ll give you in writing that post-covid, virtually every country and all of us will be paying higher taxes and the tax regimes will change, not only in the rates, but I hope in the US also this anomaly that you are paying most of the tax on income and not on capital gains gets rectified, considering the joke that Warren Buffet made that “I pay a lower rate than my secretary”. So I hope that definitely changes, it sounds bizarre to me. As I said, I agree with you on the retrospective part but on the other stuff, not so much. In terms of the court, yes again all I can say is that in large measure for most of my career over the last 35 years they've done a fantastic job. Can they do better? Absolutely. But we have to remember at the end of the day they are human beings. So I don't know about you, but I haven’t found any perfect human being. You know, all of us have strengths and weaknesses. There have been some mess-ups. But largely, I think they have done a fantastic job.

We have seen in the last four months, Jio has raised 1,50,000 crore, there are other players who are in the process of raising money. Even Google and Facebook have promised to invest more money in India. Do you see FDI inflows in 2021 really making up for 2020? 

I think so, as I have mentioned that I am very bullish on India in the medium and long term, and I'll tell you why. There are two things going pretty much in our favour—it is this whole very unfortunate situation with China. We [in India] focus a lot on the manufacturing, the supply chain, and no one will now put all their eggs in one basket. They’ll have to diversify. My personal view is that we will have to focus on some core manufacturing competencies where India is a global player and go for those. And yes then maybe we can beat Vietnam and Thailand and all those in that space. So, some FDI should come there, obviously for APIs, pharma, and there are many other areas.

So if you're going to do a big FDI in communications, in any of the new age areas, where privacy is such a concern, snooping, especially by sovereign is such a concern, India is a place, like again if I may say with my Parsi genes that India trusts the Tata brand, just like that I would say most of the world trusts the India brand. So if you are going to do 5G, which Reliance has said, then whether it's US, whether it’s Japan, they will say “theek hai we can do this technology with India, it will give us a market of over a billion people to test it”. If you are going to do AI, if you are going to do space technology, which is again huge and I think Bharti and the UK Government have tied up for a project, so I would say that this has given us a fantastic opportunity because trust is a huge factor in business and the trust will today be focused on India.

Beautiful. Coming from somebody like you, I think it is a message of hope that this shall too pass and India will regain what it has lost this year. And brings us to the next question, who are the mentors that you learnt from and gained from personally; who are the people you look up to and why? And secondly, what is your advice to young lawyers in terms of succeeding, in terms of learning interdisciplinary skills.

My parents, like most people I would say definitely my dad who was a lawyer and that's why even when I was a 5 or 6 year old, I was a very boring kid who immediately said I want to be a lawyer. It was a purely emotional decision. My mum, who has always taught me that there are no shortcuts in life, you have to walk the straight line always and do the hard work. I have learnt a great deal from her. And unfortunately I lost my dad when I was very young, 15 years old, but she made sure that all of us got the best education possible, so definitely her. And finally my wife, who is also a lawyer—a lot of lawyers in the family—she practiced for 13 years, again you know a very very high sense of integrity and crazily conscientious, so definitely those are the three people.

For the youngsters my advice would be it is a lot of hours,  it is a lot of hard work. There are no shortcuts but that’s pretty much in every profession. Do what you enjoy. Sometimes youngsters feel that securities law is very sexy, M&A is the flavour of the month. I’d say go with your heart, whichever area of law suits you, you go with that. And the second thing is unless you are going solo, be a team-player. Enjoy your work environment, avoid politics, and you should have at least—amongst your good or best friends—some people you work with so that your life is enjoyable. That would be my advice to them. Go with what you like, put in the hours, don’t look for shortcuts in life and be good to all your colleagues. And the last quick thing is that in the early years, keep yourself broad-based, be like a sponge, whatever you can learn, learn. Don't get too specialised early, down the road, of course, you will find one area that will be your specialisation and your expertise.

How do you spend your time outside of work, would you please allow us a peek into your life.

I love travelling, which in some ways both work-wise and for leisure. I am big on travelling, I love reading, partly that’s why I like travelling because it gives you more time to read away from both legal and other subjects. I love sports, gained the passion for tennis from my mother and have been playing since I was a kid. So all the regular stuff, like music etc., that’s what comes to mind. 

What’s your favourite go-to Parsi saying or maxim?

It is actually very easy. In our religion there are three basic tenets: Good Thoughts. Good Words. Good Deeds. Of course, these exist in every religion whether it is Hinduism, Buddhism but for us it is just that. Being a good Zoroastrian is: good thoughts, good words, and good deeds. Be kind to all other living beings and the fun part about Parsis is that there are no ‘Don’ts’. Drink or Eat to your heart’s desire. Enjoy life to the maximum but be a good human being. 

Mr Vakil you exemplify success and goodness. At BW Businessworld and Legalworld we are grateful to you for your time and good thoughts.