In conversation with Mukesh Butani, Founder, BMR Legal | Chair, IFA India

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

How have been the last 100 days for yourself and also for BMR Legal? Has the firm adapted any strategic approach as a response towards this pandemic and how have you been personally responding to this situation?

Well, I’d like to mention 2 to 3 things clearly. This is an unprecedented event. Not just the legal profession, no one in the world was prepared for it. Hence there is nothing that could have been done to deal with the situation that we are currently dealing with.  Coming to your question on the strategic approach—let me give you a little bit of a brief on what the impact has been and how we in BMR legal have dealt with this. I leave it to you and your judgement as to the efficacy and the effectiveness of it but I’d like to share some of my experiences with you.  Just to lend some context to this—every law firm has a mix of work and a mix of work will eventually determine how you deal with the situation from a practice standpoint in the COVID period. So let me give you 2-3 elements of the mix of work. 

Some law firms have a balance of advisory and disputes work. Some law firms are focused largely on advisory and some law firms are focused only on disputes, so that's one aspect. The other aspect is that the mix of work in a law firm also depends on what are your focus areas because those focus areas really determine your interaction with the external community. So,  There are law firms that have huge transactional work, huge intellectual property work, huge civil commercial work versus work that we do in our area. Our firm is a boutique firm in the sense that unlike full-service law firms we do tax and we do things that are periphery to tax. For example, if there is a bilateral investment treaty arbitration in which there is a tax angle we get involved, if there is a huge M&A transaction and we have to give inputs from a tax side, we get involved. So yes, transaction work is very important for us, investment treaty related arbitrations are very important to us particularly the ones that have a tax angle. But not everything that concerns full-service law firms is important to us. Now how have we dealt with the situation? Clearly when I started off I mentioned that we have a good balance of advisory and disputes work. Now clearly as we entered the pandemic, we realised that for the first two months there was no court work because the e-courts started functioning only towards the early to the mid part of June and what happened really was that the mix of our work shifted from court to advisory.

Have we been busy? Yes, we have been extremely busy barring the first couple of weeks where it took us time to be able to figure out how to really go about our lives. We found our feet very fast because we started accepting more and more advisory engagements. We started having a proactive dialogue with the client, we shifted some of our resources to doing research work. We released two research reports just last month. One is with ASSOCHAM and one is with the Vidhi Legal Centre on digital tax, which is a very, very debatable topic in the tax profession and I am happy to send you a copy of both the research reports. The e-court have now started and in the e-courts as you know, they’re hearing important matters such as bail and indisposition matters. Now that does not concern us because we are atax-only firm. So, on tax matters—relatively simpler matters, cover matters, stay matters are getting heard and we are dealing with that.

What’s the strategic approach? Well, nothing in particular. I’d like to see advisory work grow. As far as the arbitration work is concerned, the expert witness work that we do, clearly is growing. The expert witness work that we do in theUK arbitral proceedings is functioning far more effectively than arbitrations that are happening in Delhi.  All of our associates and all of our interns have laptops. We are able to work far more effectively. We have the requisite securities in place. We do not allow our people use of technology that could potentially be a security threat. So, if you ask me, the work from home has worked out very well for us. We’ve been mindful of our small team of 15 lawyers and five Of Counsels so far as their well-being is concerned, so far as their families are concerned. We had one of our associates who tested positive in these times, so it required a whole lot of effort to help build the confidence back because younger people tend to get very disenchanted and demotivated. So, I guess we’ve been able to figure out in the last hundred days as to what should be the approach in the new world as we enter. 

Mr Butani let’s  rewind to your initial years. You have an illustrious practice of over three decades, would you please tell us a little bit about how this journey began and how did you carve this path for yourself?

Yes, you’re right. I have over three decades of experience in professional services but not all of it is as a lawyer. I was a qualified lawyer but my first 20 years or rather 23 years  I practised as a Chartered Accountant and it is only in the last 10 years that I have been practising as a lawyer. The only common thread in my last 33 years is that I have not ventured out of the tax core competencies. So, it really doesn't impact me. My being a lawyer in the last 10 years has helped me achieve two things: number one, it has given me the ability to appear in the courts, which I couldn't as a Chartered Accountant. And two, it has given me the requisite gravitas to think beyond the tax law, which is contract and the exchange control, evidence, and the civil procedure code. 

Well, how I started off? I started off like any other professionally qualified person starts. I was working in large firms for the first 18 years. Those were the times when the common buzz was ‘the right person, at the right time, and at the right place’. So, I became an Anderson Worldwide partner when I was just 31 years old. You can call me a lucky person. So I led a fairly senior management level career at a very early stage of my life and I consider myself lucky. And when you get into your senior management level in your 30s, you tend to get bored, in the sense, what do you do next and that's why I turned an entrepreneur at the age of 40 and I set up my own firm along with the other co-founders, which was called BMR Advisors. That firm transitioned into the Big 4 in 2017 and I came back into my boutique model. So, life has been a good see-saw of nice experiments, more pleasant and more of learnings than any regrets, I would say.  I couldn't have asked for more and that's why I used the word twice that I am a very lucky person.

Certainly taking on senior management roles at the age of  31 is a very commendable feat.  Not many can achieve that level of success. Would you please share with us your routine and good habits that you attribute to your success.

Well good question Anisha. Two things, I became a partner at the age of 31 and then I got into the management or leadership side at the age of 35. . What happens in a professional services firm, whether it is a law firm or an accountancy firm, is that when you are a high performer you also become a candidate for leadership position. Now when you take on a leadership position particularly when it is a non-client role, you have to be mindful of how much are you balancing between your client and non-client responsibility. If you want to be serving clients and if you want to be cutting-edge then you cannot give up client work. I know lots of my colleagues in the legal profession who have become management partners— who do not do client work. Well, I think that is a real challenge because as professional lawyers we are in demand because the clients want to bank on us and leverage our technical knowledge. As you become more and more senior, the client wants to leverage your wisdom because our profession is such that the older you get the better you get. It’s the same old wine story that we have. So from my standpoint, it was critical that  having achieved a leadership position at a very early stage of my career I was able to keep up to speed with the technical knowledge, with the ability to advise clients, with the ability to get into situations that were  very complex and then the clients eventually see you adding value to that. 

To your point on networking, again I think I was very fortunate and lucky with the supervisors that I had who encouraged me to embrace soft skills at a very early age. And those are by way of public speaking skills or writing skills or the ability to indulge in deep research or networking opportunities, which for a lack of better term people call—business development. 

There are ways and means to achieve growth in your business. I come from an old school of thought, I don't think that lawyers and professionals should solicit work but we know the reality at the ground level is different. Everyone is soliciting work and everyone calls this business development or marketing. My idea of a professional lawyer is that you should be so good that the client should be at your doorstep. You should be so good that the client should seek you out for itand then you ask for your price from the client. Now in order for you to be able to do that you have to be outstanding in technical knowledge, analysis, in giving business solutions, and in bringing real cutting-edge approach to clients’ problems. So, I would say a combination of developing non-technical skills in the area of public speaking, high research and ability to network with the right minded people is in my view what stood out for me in my career.

Thank you so much for sharing that with us Mr Butani. Would  you kindly tell us something about your present role as the chairman of the Indian Fiscal Association?

Well, the International Fiscal Association (IFA) is one of the largest tax bodies outside of the United Nations. It is a nonpartisan body known for its deep research in the area of international tax law, international customary law such as the bilateral double tax treaties and it is often sought by way of advice from the OECD, from the United Nations, from the IMF, and the world-leading bodies, including many nations. This body, though born in the Netherlands, has a very, very significant chapter in India. This chapter brings together a group of professionals, academicians, governments, research bodies together to debate on pertinent issues of international tax treaty law. As you know, India has been at the forefront of many of these issues whether that's got to do with debates at the OECD platform or that's got to do with how the Indian tax policy and how the Indian judiciary is interpreting the Indian law. So I’m extremely proud and privileged to be the chair of IFA in India. I also had the privilege to be on the permanent scientific committee of the IFA’s global body between the year 2010 and 2016. It was a six-year term. This six-year term is extremely prestigious because the permanent scientific body of IFA globally is really a think tank. That's the body that looks into the futuristic projects on tax research, that's the body that organises the annual IFA congresses, which is in its 77th year right now as we speak and that's the body that has representatives not from all the countries but from select countries. India has had representation at these bodies and I was very fortunate because my previous members of the committee were people like Mr O.P.  Vaish, Mr Soli Dastur, Mr Porus Kaka. All three senior advocates and I followed as the third individual  representing India in this body between 2010 and 2016. And now of course it’s a double privilege for me to be able to lead the IFA India chapter.

BMR Legal has niche areas of practices, out of which specifically we wanted to discuss a little bit about the Customs and Trade practice. Would you please  tell us a little bit about the kind of matters you are consulting on? , 

Yeah, interesting question. The Customs and Trade practice often gets confused with indirect taxes because the administrative body that looks after the Customs Law is the Central board of GST and Customs. However, I consider indirect taxes which is GST and which used to be the state VAT and the central excise before the GST law came in as very different than the Customs and Trade practice. The Customs and Trade practice in my view envisages a responsibility that goes far beyond tax. For example, from a policy standpoint, the customs, tariffs are very often used as trade barriers by various nations. This is where we get into issues like the WTO, which is different from the WCO—the World Tax Organisation is different from the World Customs Organisation. You can get into areas such as bilateral trade agreements,  so the international trade and customs practice in my view is distinct from other forms of indirect taxes. 

Let me come to the question about ‘what do we really do in our customs and trade practice’. We do advisory work in terms of advising clients on where is India heading towards its policy with respect to non-tariff barriers. This is very relevant particularly in today's environment when India is thinking of embargoes on customs importation in the country as a result of backlash with China. Now whether that comes in by way of high customs tariff or by way of banning the imports all together is  an integral part of the advisory practice. 

The second is International Trade Agreement. You’d have seen the statement issued by Mr Piyush Goyal where he has talked about a limited trade agreement with the United States. We have a comprehensive trade and economic agreement with Singapore. We have, as a nation, let all the trade agreements with various nations expire. So all of these are going to evolve by way of what is going to be India's approach towards trade policy. That’s the trade part of it. What do we specifically do? One, we advise on these aspects to our clients. On customs specifically, our practice entails advisory, including representations on various aspects. Those representations could be by way of proceedings before the Special Valuation Bench of the customer authorities that questions the valuation of the imports that the clients do particularly from related parties. And second would be helping clients handle investigations on customs authorities. So the investigations from the customs authorities could be before either Special Valuations Bench or before the DRI, Directorate of Revenue Intelligence. These investigations are extremely sensitive so we help our clients address these investigative aspects within the customs and trade law. So, if you see, in the entire conversation I did not discuss GST because I am segregating GST as an arm of tax from the Customs and the Trade practice. It has been an extremely enriching experience for us to help our clients in the Trade and Customs practice.

Would you please tell us about some of your most important milestones in life, and then at what point in life did you know you wanted to start BMR Legal. Also, what made you  want to be a lawyer?

I was having this conversation with Mr. Datar, a senior advocate. He’s released the 16th edition of Kanga and Palkhiwala. Kanga and Palkhiwala is like the Bible for tax professionals and the first edition of Kanga and Palkhiwala was the 1950 edition and this edition is in its 70th year. And Mr. Datar wanted me to speak few words on that and which I am going to do and I mentioned to him about my association when as a young Chartered Accountant at the age of 22 I had an opportunity to accompany my supervising partner and a lawyer to brief Mr. Palkhiwala on a matter in Bombay High court in 1986 and this was a famous judgment of McDermott where the bank accounts were attached by the revenue authorities and we had to file a writ petition. So, l clearly attribute that as a very, very important thing in my career when I started off. Another   milestone that I remember is my   professional engagement with the famous Puerto Rican singer, Ricky Martin, in 1987 when he was prevented by the tax authorities to leave the country in absence of a tax clearance certificate and how we helped him or rather how I personally got involved and seated   him comfortably in the British Airways first class seat. In those days without that international ticket and lounge, you could pretty much go till the aircraft, with a special permission, of course. And all of these things become very dramatic when you have been through something like that. So, that's the second thing I remember.

The third thing I remember is carrying a brief to Mr Salve in 2014 for a transfer pricing adjustment for a demand of fifteen and a half thousand crores of rupees. And when he looked at the order, he wondered, Mukesh, whether there is one zero more in this. Is it 1500 crores? I have heard of 1500 crores of demand. And the entire trial through the briefing process, which finally we won in the Bombay High Court, where the Bombay High Court declared that this demand is fallacious, completely thrown out and the government subsequently issued a press note through a cabinet approval that adjustment or those forms of adjustments are wrong. So, those were some of the most memorable moments in my life and my career.

Coming to your question in 2010 what happened and what led me to set up BMR Legal, frankly, I don't know. My wife called it a midlife crisis at that point in time. On a more serious note, I felt that was my calling, in the sense that I always wanted to be a lawyer and that's why I went for my law along with my CA but in those days Bombay University used to give you a Bachelors in general law which was the two law program after graduation. And if you wanted to practice as a lawyer, you needed the 3rd year, a calling that I fulfilled in 2008 by completing the third year because by that point I had decided that I wanted to be a lawyer. Besides my personal desire, I still remember visiting Justice Kapadia who was about to become the chief justice of the country. I had gone to request him to write a foreword for one of the books that I was authoring at that point in time and he asked me what was I up to in my career and what were my future plans and I told him, undecided. So he said if I have to give you some advice, I think you would be a far more effective lawyer having practised all these years and embraced the art that typically Chartered Accountants are very familiar with. So, that was also one thing that played on my mind what late Justice Kapadia had told me in those days. So in 2010 I had no plans as such. It was some of these thoughts in my mind but I was very clear that though I would practice as a lawyer, I would still practice the same subject i.e., Tax, which I was familiar with and hence the transition would be very easy. But, that was not the case.I can tell you practicing as a CA and as a lawyer are two different things altogether. What I thought would be an easy transition was not really the case and I had to work my way up. When people call me today as a senior in the profession, I tell them I have only been 10 years in the profession and still am a baby in this profession. That keeps me more and more curious about learning different things.

So, how did you manage this sudden transition at that point of time? 

See, as I mentioned to you, I thought the transition would be smooth because I was going to stick to tax. I never wanted to do other forms of law but a lawyer and a CA are viewed very differently. As a CA, you are expected to give good advice. As a lawyer you are supposed to be defending that advice. As a CA, you are dealing with the Income Tax code and maybe other fiscal laws. As a lawyer, you are dealing with not just Income Tax code but the wider court procedure and other forms of law such as evidence, contract, so on and so forth. Now, this is the transition that I was talking about.  The transition was not as easy as I thought but the transition helped me embrace new skills, which I didn't have when I was practicing as a CA. And the transition is still a work in progress because I can take a view that I have 33 years of experience in the tax profession, instead, I believe that I am just 10 years old as a lawyer and that gives me the ability and the curiosity that a practicing lawyer with 10 years of experience will have, right? So that’s the transition which is work in progress.

And whom do you look up to as your  mentors in this journey?

Many mentors. I mentioned two names. I said Harish Salve, I mentioned late Justice Kapadia. who was  my mentor after he retired as a Chief Justice. There were many many people who played a role in my career, in the profession the person who hired me in Anderson who is now a professor, Prof. Roy Rohatgi, my first boss Ashok Wadhwa, my colleague and my peer Bobby Parikh, the B of BMR...I had lots of mentors outside of the tax profession, people who had nothing to do with tax. People who were business leaders; I can think of two people and I always benefited from their advice when I went to them. They were CEOs or large organisations and large multinationals but they had an ability to think through the issues in the professional services. There used to be a gentleman called Ramesh Vangal who was the Founder, Managing Partner of Pepsi. He set up Pepsi in India. That was one of my first clients and I learned a lot   from that client. 

Similarly, I can think of a gentleman called Tony Singh who last was the Chairman of the Max Group and he was the CEO of the Max New York Life Insurance Company and my association started with him much before that when he was the head of American Express Bank and then of Bank of America. That’s one person I can think of. Interestingly, I have been in touch with all these people and I talk to them regularly and they have become my mentors. 

My latest mentor is someone who was my associate and I hired him twenty years back. He is a professor in a university and also my guide for my Ph.D. .So, I’m pursuing a Ph.D. in a Swiss university where he has become my mentor and in 2013 when I was leaving professional services to become an entrepreneur, I hired him as a new associate. He is roughly around 18 years younger than me but he is a mentor to me. So, I think when you talk about mentorship in general, you have to be mindful that there is no definition of who is a mentor. A mentor is someone who is a guru, someone from whom you learn. So, there are different facets of being a mentor. You cannot have one mentor or two mentors. If you listen to something philosophical or mystic from people like Sadhguru or Sri Sri Ravi Shankar and you start practicing it, they become your mentors. So, the whole notion of mentorship is a very whimsical thing and it depends how you look at it.

You have BMR Legal and you are also a visiting faculty in many universities. You are the chair at many international organisations. How do you really manage your work-life balance? 

You know when I started my internship at the age of 17 and a half when I enrolled for my chartered accountancy, my first boss told me two things: He met me, he interviewed me, and he said let's get started! And I said, ‘When, Sir? He said Thursday because Thursday is a good day to start something new in life and when I went on Thursday to meet with him, before getting started he said, “Son, you are entering a profession, which is hugely tireless and unforgiving and punishing and it requires tremendous effort”. I was very demotivated on the first day but I am always reminded of what he told me. It is a punishing schedule, it is unforgiving not because of any other reason but clients come to you and pay you for what you’re worth. If you are not worth it, they will not pay you, so they are unforgiving. So, I think it’s entirely up to the individual but I personally feel that if people keep up to their curiosity levels of learning new things, none of these things will tire you. You talked about my association with international organisations, I consider that as a privilege and an honour and a duty. You talked about my venturing into academics and teaching and there are only two reasons to do that. 

Number one, unlike in many Western parts of the world where senior professionals have a commitment towards training the younger generation, we do not have that as a convention in India. And this was my way of giving something back. So, I do devote about 10% - 15% of my time to academia, which is all my associations with universities, teaching commitments and I want to continue doing that because I feel that it's important to take your time away from a profitable practice and when I use the word profitable it means that if I don't do that work pro bono and I start doing client work, I will make more money. But you have to take out that time. Lawyers have this important concept called Pro Bono work. I also do Pro Bono work on taxpayer rights. I have stood up in the Delhi High court on Writ Petitions for tax rights. I think that every professional,  not just doctors, have to do Pro Bono work or social work. As you grow older as a professional, you have to be more and more mindful of societal needs and you have to show more and more commitment towards that. So, what I am doing is just a small contribution and my plea and my prayer for everyone is that they should do it as well. I know that some people do it in varying degrees but I would like this  to be done more and more in the legal profession because the judicial system over here and the delays in the judicial system are of such a nature that you need more and more of pro Bono work to be done. And that is also the reason now not just the Supreme Court but various High Courts have cells that provide support to the needy people. So, for example if a trust comes to me for a representation on an appeal, I do it pro bono. If a needy individual comes to me, I do it without any fees and I think that's very very important.. As far as education is concerned, I feel that the more we do on education particularly in our country, the better it is. Like as we say Vidyarthi desh ka bhavishya hai and I think it's important to follow that in its spirit and its form.

A lot of young lawyers and junior associates and senior associates would be listening to this interview, would be reading this interview. So, what is your message to them? Individuals who are just starting out or are in mid stages of their career, how should they be building their practices?

Very fundamental message: all of us as human beings have to have a purpose in life. You ought to have a purpose in the legal profession as well. That in my view is very important. After, you have figured out what your purpose is, be passionate about it. Don't have a purpose which sounds fashionable for which you get pulled into just because you see that in someone else. Once you have a clear purpose in your life, you will figure out how to stay passionate to fulfill that purpose. Do not give up your curiosity of learning no matter how popular, how senior and how rich you become. The legal profession is all about continuous learning and continuous development.

The other advice that I would give to my members of the Indian legal profession is something I feel that the Western part of the world does better, which is that when you are in the legal profession, besides your technical skills do try and develop soft skills. I think we spoke about most of the soft skills whether it's networking or I spoke about communication, I spoke about developing public speaking skills, they are very important. Whether you are practicing in the courts or not. Please do not confuse sharpening your communication skills with representation in the court. Of course, you need advocacy skills when you are standing up in the court but you need it even when you are a solicitor because you know a document that is churned out by an English lawyer or an American lawyer in terms of it being error-free and the attention to detail it carries is far superior than what an Indian lawyer churns out. So make sure you pay greater attention to details and embrace the concept of learning various facets of public policy. It's not just about law, it's all about public policy and economics as well. That is the only way you will develop yourself into a multidisciplinary lawyer as I call it.

Thank you so much for enriching our knowledge on so many subjects Mr Butani. We are very grateful to you for your time and beautiful thoughts.