In conversation with Ajay Bahl, Co-Founder and Managing Partner of AZB & Partners
Mr Ajay Bahl is the Co-Founder and Managing Partner at AZB & Partners. He talks about his spectacular journey in law, including his bonding with Zia Mody and Bahram N. Vakil; the evolution of TMT industry; the importance of M&A advisory; and his passion for fitness and DJing.
Mr Ajay Bahl, it is so good to interview you on behalf of BW Businessworld and BW Legalworld. You are a veteran in the industry and while you said you’ve been media-shy, we are delighted BW Businessworld and BW Legalworld have got this opportunity to interview you and we extend a very warm welcome to you for being a part of this conversation.
Would you please tell us how have the last 4 months been for you. It is an unusual time, it has been positive on some counts and very worrying on others, so how have you spent your 120 days?
Well, actually it is funny that you should ask this question. I have viewed these past 4-5 months with a sense of great optimism for the simple reason that I think that we as a nation barring, of course, some exceptional circumstances…I found that the resilience that the nation has shown collectively given our diversity, our disparity, given the surprise that we were all hit with, the whole nation has performed in a manner that is actually a surprise. Look at it in the sense of today—we're speaking to each other that means somebody is giving us electricity and has been all this while. The internet—somebody is providing the internet, khana mil raha hai (we are getting food), food prices have not gone up, yes, basic issues have remained and when I was having a call with my team just the other day all of them my entire partner group and then all my associate group, I was telling them just think that if I had 5 months ago one afternoon called the whole office and said that I've decided that for 4 months we will work from home. You would have all thought Mr Bahl has gone mad. And even if we had planned for it everybody would have been sceptical. Here we have been thrust into an unplanned situation and yet with god’s grace everything is working, we are in touch, transactions are happening, the advisory is happening, new means of communication are being used and the whole process is actually pretty seamless and just to share with you, I had in the last 4 or 5 years practically cut down my business travel to its bare bones absolutely minimal. Whenever somebody calls me now I always tell them that I am delighted because this has always been my model that why do I need to travel. I have done my share of travelling over the years 10 months in a year, every month doing 5-6-8-9 trips. Enough. There is a great team out there but why can’t we do more without having to travel. When I look at the last 5 months or 4 months as professionally, personally and from a macro picture—I see this as a very important event, which has shown us collectively whether it is us, the whole ecosystem, that we can manage against crises that are unprecedented and that are affecting the whole world.
Business-wise I think it has been fine, clients have been superb in terms of their continuing support and matters have also been going on. To answer your question, I think it has been a great learning and there are many positives to take from those learnings. I don't see it as negative. I see it as positives, learnings, something that is going to teach us a lot of things, which we never expected we would have to confront.
I keep saying in good times we ‘should’ advertise, in bad times we ‘must’. Similarly, for the legal profession in good times, you need legal advice and in bad times you need it even more. So, please tell us will the litigation post-COVID-19 go up?
I am not sure. I don't see it that way. To my mind the major part of the litigation has risen from force majeure, interpretation of contracts and a lot of that has already taken shape, so I don't expect COVID per se to necessarily create more litigation by itself. There will be some that will be related to as I said frustration of contracts, non-performance and so on and so forth but I think by and large those issues have got more or less crystallized. I am not expecting that litigation will go up significantly, the impact of COVID may cause litigation, for example, companies struggling with the markets, with cash flows drained there will be an issue of lenders having to take greater cover, the issue of promoters being stressed because of their pledges so on and so forth—to my mind is a more significant impact and that will obviously lead to some litigation. You must have seen that litigation has already commenced on the issues where lenders have tried to sell the shares to promoters etc. But other than that, I don’t think on a broader base this is going to give rise to too much litigation. There is going to be a stress factor to the extent there is unprecedented stress, which may cause some incremental litigation. But on the flip side because the courts are not functioning there are limitations on the courts to do it electronically. So, there will be a contraction in terms of the ability to litigate even though the courts are doing a fantastic job. I don't think there is going to be any major positive impact on litigation.
How have you managed the roles in AZB between yourself, Zia Mody, and Bahram N. Vakil?
Ours is a very extraordinary relationship where a professional relationship has become a very personal relationship. So the fact of the matter is that Zia, Bahram, and I are personally very close to each other, which is a bond that has gotten built over the years and it has gotten built through work but it has now transcended work. That makes life much easier. When you are friends you are able to interact and deal with each other.
Secondly, by the time we had merged, we had already kind of been there you know. Sometimes you merge too early then everything is a concern. Every small issue becomes an issue of ‘my view-your view’ and we were beyond that stage. Our basic approach to our respective operations is that we are wedded and we are one firm. Right across our offices, interaction amongst our partners is absolutely superb. They operate seamlessly across the firm. Partners in Delhi, work with partners in Bombay, Bangalore and vice versa. They interact with Zia and me, so the headache from our point of view of making the firm work together, and integrate was and is not there.
Thirdly, we had all run our own offices before we merged. So there was a certain style through which we had approached matters but we decided that we will take the best practices from every office. But we don't have to replicate everything as people are used to a particular style. So our approach to our practices and our offices is a soft touch approach where we don't bother about day-to-day issues that are going on. Collectively, I think over a period of time, without there being any hard and fast list of decisions, we have identified for us what we think are important decisions, which we will agree we’ll always take a collective view on. That does not mean we won’t talk about other issues. Zia and I may speak maybe 10 times in a week or maybe 5 times in a day—whether it’s a small issue or a big issue. Whatever we want to talk about to each other we talk about it. But certain decisions, we make sure that we have a very collective decision. That doesn't mean that everybody has to always agree on everything, but we always agree that at the end of the day this is good for the firm so even if I have another view we decide that let's test it out, let's think about it, let's move on. After one year we can always do a reversal if the decision doesn't go well. So that kind of thing. Let me give you an example, when we take a huge tax team on board like Deepak [Chopra] came on board from PDS [Legal] with an entire team, of course, that is the decision that we will jointly discuss that we open a new area of practice, forensic for example, of course, we will discuss. So, the bottom line is that we are very, very connected with each other.
Further, we have always dealt with rumours in a very simple way. There will be people who will come and tell me you know that oh we have heard this and that so invariably what Zia or I will do is put each other on the phone and without telling the other person we will put ourselves on speaker and so our team is sitting there and we are saying that oh, by the way, there is this rumour floating around, we laugh at it and in 5 minutes the whole issue gets diffused rather than us trying to explain the issue…all I am saying is this is how we decided anything that nothing which comes up is to be shoved under the carpet, just close it out.
Now talking of the top law firms, like yours that did very well because there was lots of economic activity, business activity, lot of compliance, and new areas like Tax. But post-COVID, will the DNA of a law firm change in any way? Does a law firm need to add new dimensions, which didn’t exist?
No, see the fact of the matter is post-COVID what is the change that is going to happen. The change would be two-fold. One is in terms of the economic activity per se that is an overall impact on everybody whether it's a law firm or anybody else and certain parts of the legal community than others—as you said people will need to continue with their businesses and deal with their challenges. But other than that, the questions are going to be the same and you know the issues are still going to be very similar in terms of the legal issues, in terms of the compliances, in terms of those kinds of issues. So I don't think any new dimension per se needs to be added. I think where there is a certain degree of work that is not commercial but has to do more with working with the government, lawyers playing a greater role in policy-making and advocacy etc., I think that's an important area and we are spending a lot of time on that during this COVID period. We are interacting with regulators to try and see how post-COVID the momentum that has taken place in the government—the seamless way and the re-invention that the government has done in its mode of working continues —how do we keep replicating and building on that. So say, Companies Act where so many changes have been made, how do we take that momentum and put it across other statutes; decriminalisation is a very big initiative that I’m working on. So it is more about adding new areas which may not necessarily be commercial or client-centric but I think which are really enablers to see how we can do things better as a nation. Migrant labour for example, what happened [there and what were the causes] instead of just being a part of the problem and cribbing etc., we actually prepared a detailed paper that we are now sharing with the government in terms of identifying where we think the issues went off, who is to blame not with a view to playing a blame game but to find solutions. Aadhaar linkages, bank account opening etc. These kinds of areas are very important for a firm if it has the heart and the desire to do it and we do, so for us if you ask me one area where there will be more work though not commercially relevant or as paying work it will be this area. Other than that, I don't think that COVID is going to change the basic core of our legal practice.
When you look at the US, you look at Europe, a GC in a large firm, in a large corporation is in on the board, the CEO or the chairman of the board move forward unless the GC says whereas in India I don’t see GCs being on the board of Indian companies. My question is, do you think GCs need to be more involved in strategies than they do currently?
You know being on the board or not being on the board to my mind, is not so important, because in any event, the chief legal officer or the chief compliance officer is a KMP (Key Managerial Personnel) and is a very important person. Sometimes the board has to evaluate many decisions that the GC is recommending, you know they have to take the final decision. And sometimes it is better that the person who is recommending something, is not a part of the decision making because anyways the person will have to recluse, so how does it matter? So if a GC is today working—very often with us when we make client presentations for a transaction as an example, the GC and us will do it together—at that point of time, the board has a free hand to say whatever it wants without worrying that the GC is actually a member of the board or an old-time director, or so on. So I think not being on the board is not really an area of concern as far as I see it. In fact, I think it's not unhealthy, it's actually healthy that they are not on the board because they can have very free interaction and the board can have a very dispassionate view in terms of how you look at the GC's recommendation.
To your point about the evolving role, I think the GC's role is getting very evolved in India, the number of GCs and the importance given to GCs has become much greater than it was earlier and the good GCs know how to balance the requirement of getting information from your advisors and how much to do in-house. The role of the GC, as we see it, is to improve the quality of the advice that they need to seek, and not necessarily to replace your lawyers, but to make sure that you raise the quality of advice that you are drawing from your external resources, so that combined with the experience and knowledge of the GC and the domain and their personal involvement with the business, the combination of our broader experience across sectors, their experience across the company, and possibly other experiences gives the best result. The role has changed very significantly, GCs I think have become far more important in the last 10 years than they were earlier, and we have a very interactive, very complementary role with GCs. We don't see any sort of friction between us and the GCs and most of the teams that we work with, and most GCs are pretty mature to understand as I said…it's all about sharing experiences to get the best result for ultimately one person, which is our client and their employer. That should be the objective.
I am asking my next question so that the younger legal professionals watching this or reading this get inspired and learn from you. How can a legal professional be as successful as you?
So first let me tell you that we have only three age categories in AZB, young, quite young, very young. And I have taken young for myself, so the younger and quiet young, we can talk about. So to answer your question, so (a) we spend a lot of our time in talking to our teams, talking about values, talking about what is the right thing, so it's not just about law, in fact, we have an associate orientation or orientation for anybody who joins, to talk about what we expect from a person, not just as a lawyer but as a human being as well. So because we believe that the human-ness and the goodness is always a part and parcel of everybody’s growth. If you are a good human being, the chances are you will do better because you will get along with people and that will itself promote how you look at what you do and the opportunities you get. But principally two or three areas, one is that we have a very holistic approach to practice, maybe because it is my background as a chartered accountant and I was a tax lawyer, moved on to corporate, so our experience has been over the years that in India with its complexities, clients are always very happy to get a broader spectrum of the advice and by the way that is what we are hearing from even the international general counsel, that we would like one or two people, who can hold the equation or the interaction and then if it has to spread out, of course, it will be spread out rather than 10 people sitting in the meeting to be able to answer the questions. So first our approach and what we have recommended to people is, have a holistic view, have your specialisation. I have also written an article on the return of the generalist lawyer, where we have compared the legal profession to the medical profession and we are all sort of today struggling to find the GPs. When you want somebody, GP nahin milta (you will not find a GP), you have to go to a specialist and that overall view that you got from a general practitioner like my father who was a general practitioner, is missing and that’s why we are very concerned that the legal profession should also not go the same way. There should be specialisation, but there should be room within the specialists, to appreciate that a lot of the learning comes from the non-specialist, because sometimes a person will look at a matter with a fresh perspective. Take a tax matter or a competition law matter, or capital markets and I saw this myself when I was practising as a CA, we go to a lawyer and the lawyer would without any knowledge of tax, would just pick up a point and it used to bug me that how has this person thought of something that I hadn't thought of, so often because you specialise, you get a little bit of a tunnel vision. So one the things we have told people is the exact term we have used is, “wear your specialist hat lightly so that other stuff can flow in,” because if you think of yourself as an expert, actually you have plateaued. Expert means there is nothing to learn and therefore I don't see 'expert' as a compliment and I keep telling people that if somebody tells you aap to expert ho gaye ho ji (you have become an expert), don't take it as a compliment. Say “I have much more to learn, Sir, aap bhi btaiye hum aapse bhi seekh lenge,” (I have much more to learn, Sir, please tell me I’d like to learn more from you) so that's the second thing—be open to freshness of ideas from people who are not of the same experience or the same line of specialisation as you.
The third thing is that there is too much emphasis today on basically judging people based on mergers and acquisition and transactions, which is unfortunate, I have done tons of mergers over the years, tons of acquisitions, and today I am a resource for my entire team. I don’t personally need to be involved in negotiations because the teams are fantastic, they are doing the job. But I am aware of every transaction that is important in the office and my team will flag to me what is the critical matter in a client transaction, so by the time the client calls up or even before the client calls up, he knows or she knows it has got my attention. So while I am not directly involved in every transaction on a day to day basis, it gives me the ability to give advice all around. But, when I look at the matters where I am doing no acquisition—the challenging structuring, the kind of challenges like in ESS, which is a brand new area when it comes into the country or like e-commerce, payment systems etc., you have to look at how it operates and design things to be compliant—that is a fantastic exercise in itself. Now what happens is great lawyers who are doing that kind of work are not in any league table and don’t get the recognition that comes out of this deal or that deal, which is I think a very unfortunate trend. I keep saying to my team that the advisory practice is actually as important, if not even more important than the M&A. M&A will come and M&A will go, it is your advisory practice, which will continue. How you deal with clients, how you give them an entry strategy in India, how you keep reshaping their entry strategy, as the regulations evolve is very challenging and satisfying. I have always told lawyers, do not get disappointed when you are put on an advisory matter, where it is a fantastic client, but the client doesn't do M&A. I know that you will not appear in the transaction but that doesn't mean that your experience and your quality of work are not being valued by the client and these are very important clients. So that's an important area to handle these days because as I said, the people want recognition and if it's all about M&A, then some of your best people may not get that recognition externally. They get it, of course, from us and from the client but the ecosystem that is developing around this whole M&A-M&A ignores that particular aspect—all these are some of the issues we try and keep alerting people to in the hope that they will imbibe that and eventually become better professionals in terms of their skill sets, in terms of capabilities, in terms of addressing client needs. Our basic motto is, find business solutions to legal problems. We also pride ourselves on being very accessible to clients. So that's how we’ve sort of evolved this whole process and that’s the kind of advice we give to our junior lawyers and our partners, in terms of the mentoring that we provide.
What have you learnt from Zia and what have you learnt from Bahram? And second who are the people you look up to in the legal profession that you currently work with, or have worked with, in the past, and why?
So, obviously you know the learnings are difficult to quantify but squarely from Zia, her energy or her willingness to get on a flight, take things on, tremendous energy, she has—god bless her—tremendous energy, and she can just get after something with a real dogged approach and of course she has marvellous intellect. Bahram, is a very very compassionate person; while very hardworking, very client-focussed, a person who calms things down. So when there are two hyper people, Zia and I are both Cancerians, we tend to get hyper he calms us down. He is like “arey chhodo (let it be), soch lo (think about it), sleep over it, think about it.” So it has been fantastic, that's why I said it has become a friendship more than a professional relationship.
As far as people who have really played an influence in my life, frankly, there are two very major influencers, one is Mr N. K. P. Salve, my original Boss, Harish's father, he actually shaped my entire career, he is the one who made me do law when I was doing chartered accountancy and has been a great contributor to my life in terms of approach to work, in terms of his approach to clients. My father again, though he was not in legal practice, but because he was a professional, in terms of how to approach clients to give that extra, going that extra mile for your client and making the person feel comfortable—he and Mr Salve had very similar values and they were very good friends as well, so those have been two very fantastic influences and, thirdly, Harish himself. When I was working with Mr Salve at his chambers, Harish was also doing his chartered accountancy. Once, he even lied to get me my first hearing in the tribunal because Mr Salve used to always appear with people who had appeared before and we were to go to Allahabad for a very heavy duty matter for JK Synthetics, I have never forgotten, and Mr Salve asked me “Beta, aap kabhi tribunal mein gaye ho?” (Son, have you ever been to a tribunal before?) Of course, I hadn’t ever appeared, but before I could say anything, Harish said: “Yes, of course, he has been to the tribunal many many times.” And I went with him to Allahabad, I have never forgotten that hearing, I have never forgotten the judgement, which was cited here and probably in my life I will never forget it because I made all the mistakes [possible], but when I came out Mr Salve asked me “Beta, have you actually ever appeared?” I said this is a very short job and I am going to get fired now, instead he puts his arms around me and says, “Oh my God! How much pressure I must have put on you, I'm going to fire Harish, fire him for having allowed you to take this pressure on, we could have hired another person to sit in the court with you so that your first hearing could have gone smoothly.” You can't find people like that any longer and I have very fond memories of Mr Salve and what I learnt from him and, of course, Harish as well.
You have done so much work in the TMT arena that too with some of the biggest players, today technology, media, telecom have merged. Where do you see that going?
So I think that one, everybody is basically enjoying the benefit of what people like ESS and ESPN did by actually making people pay for content and making people feel that content should be paid for. I am sure ESS people must have told you at that time when they said they were going to pay everybody some people said go home you are never going to make anything of cricket and we did the Sahara cup in Canada so that we didn't have to share with BCCI and it was an exclusive event—Pakistan playing India after 7 years—and we went up to 3 million subscribers.
So at that time, the major problem that people don't have today was that you had to go through an intermediary to put your content [anywhere]. You were dependent on the cable operator and the fights and the battles we had it was a constant scrap that was going on and all the regulations were focused on television. Now with the OTT and telecom, regulation hasn't been as stringent. More importantly, the intermediary is gone. Today Airtel can communicate directly with me they don't need an interface. So whatever they want to transmit as content can be given to me directly. Netflix can come to me directly, there is no interface required. All I need is a TV and live streaming, so I think that opportunity for players and for content has now become a real opportunity. Earlier we used to fight about—is content king or is distribution king—now actually the lines are blurred because distribution is critical. Unless you have the eyeballs, nobody is there to watch your content. But once you have the eyeballs or have the capacity of building eyeballs without having to be constrained by an intermediary then content becomes very relevant.
To answer your question, I think that this business is going to continue to grow, but definitely I think there are some grey areas in terms of the policy framework for television broadcasting and internet broadcasting. Maybe it's the right thing, I'm not suggesting that there should be an alignment necessarily but [certainly] that has given the flexibility to players to be able to do things on the internet through streaming, which is not permissible if you were doing the same thing over a television broadcast. It's a very exciting time and I think the customers are getting the best deal that they can ever have got. There is so much content that you are really struggling for what you actually want to watch out of so much content that is there but it is a good experience.
How is AZB & Partners staying futuristic? Is the Indian legal system ready for AI and LegalTech?
Let me answer the second one first. I think AI Is always going to be, in my view, a support function. At least in the short run. I don't think AI is going to take over the [human] mind because strategies and tactics require a lot of interactive thinking and it requires a lot of duality of thinking. I may have a view, the client may have a view. So there has to be a lot of interaction before you come to a final solution. AI is great assistance in being able to reach that. You can get faster you can get your reviewed precedents or you are looking at various things—let’s say, I analyse ten mergers, what happened in terms of the outcome, were they able to synchronise themselves—so all those experiences AI can help with but I don't think AI will take over. I am at least certainly hoping not in the near term it will take over our creative thinking but it is a support service, we recognise it and, of course, we use a lot of that.
As far as it is about AZB staying futuristic, my personal view is that ultimately our business is all about client satisfaction. So futuristic or in the past, unless you have a satisfied client that goal of being in practice is not going to be satisfied. I think to be futuristic you need to be more and more involved with your clients’ business and you need to get much more involved with the domain so if I am working on a client say in media, I should know as much as possible about media here, I should know international practices so that I can actually be a part and parcel of the client team.
The futuristic model and what we follow today is that we are an extension of the client’s team just sitting outside the client’s office and therefore we want to be in a position where we are equipped to fulfil that role of being advisors rather than just legal advisors but play a broader role in developing the client’s business. I think that is what the future is going to require. And I think that our team build-up, the focus and the way our teams have worked over the years and how they operate and approach matters, they are ready for today they are ready for tomorrow and the future.
To briefly touch upon some of the topical issues, particularly—in the wake of the geoblock on Chinese Apps and in the absence of specific legislation for data protection in India, what would be your advice to the other companies in possession of consumer data?
See data has become a very sensitive issue as you know sometimes it surprises me because people will share the same data with Facebook but the moment that is used by somebody else or used by the government all hell breaks loose. I get a little surprised with that but the principal issue is, what we are telling people is, use data carefully. If you’ve got somebody's personal data in the course of a transaction try as far as possible to work within what you think the law is going to be. Because at the end of the day even if there is no legislation today, the development of what will be future legislation is taking place. You may not agree with everything but there are certain themes within that, which I think resound with everybody— [most of it is] just common sense in terms of the ability to use somebody's data, taking consent etc., so we are just telling people to keep an eye on the development and try and follow it as far as possible. Just the fact there is no legislation doesn't necessarily mean we should not do the right thing. That's the way we look at it. That's self-regulation. There is no reason for people not to self-regulate.
Mr Bahl that marks the end of our other questions, but lastly, is there a Bucket List that Ajay Bahl has? Would you please allow us a peek into your life outside of work.
So you want to know if I have any hobbies, the answer is—yes, I am a very fond runner, I have run 8 half-marathons; I was very keen to do at least 10 but I have got an injury in my knee so I am still hoping that I will make up for two more. I ski. More importantly, I am an aspiring disc jockey so maybe when things are okay and you are back and you have some celebration party I will come and DJ for you guys. I am playing a musical instrument now and I try and balance my day with all of these. I also have a great desire to be able to contribute a little bit from a governmental standpoint. I do like to spend some fair amount of time in just trying to work with policymakers and sharing ideas and thoughts in terms of how we can make things better or we can make life little better for all of us in terms of how we should operate, self-regulation etc. That's partly professional but it has become a hobby now but the rest of them are just what my current hobbies are, and I am enjoying them.
Some interesting revelations there! Thank you so much for sharing your valuable views with us, Mr Bahl. It was an honour to interview you.
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