These law offices look like any other chambers: mahogany panelling, leather-bound books, Oriental rugs, hushed conference rooms... But in any other office, you won’t have to hunt for the managing partner’s room; those are usually the biggest and most opulent, or at least the most visible. Not at Khaitan & Co. Here, a first-time visitor will have to ask which of the cookie-cutter cubicles belongs to Haigreve Khaitan, managing partner, and, incidentally, the Khaitan in Khaitan & Co. More than anything, he tells me later, this drives home the fact that for this boss, the firm is bigger than the individual.
The legal world is dominated by AZB & Partners, Cyril Amarchand Mangaldas, Shardul Amarchand Mangaldas—and Khaitan & Co; India’s magic circle if you will. With revenue north of Rs 500 crore last year and a team of 540 lawyers, Khaitan’s entry into this circle is not really surprising. But seen in context of where he came from—a 100-year old, Kolkata-based family law firm with 60 lawyers and revenue of Rs 11 crore in 2002— it’s a huge move.
To understand exactly what it means for Khaitan, 47, to be a part of the magic circle, simply look at the reputations of the other three firms. Zia Mody, the Z in AZB has been called “a one-woman tornado”. While the firm she co-founded is probably the youngest in this set, it also comes with a formidable reputation and has developed an equally impressive client list.
The two Amarchand Mangaldas firms boast of 100-plus years of shared history before the company was split between Cyril Shroff and Shardul Shroff. To be sure, Khaitan & Co is also more than a century old, founded by B.P. Khaitan in 1911. But for all practical purposes, the company that we know today came into being in 2002 with the move to Mumbai.
Yes, the firm brought a book of business from Kolkata but it’s the clients it bagged in the last decade that have put it up on the map. That new list includes Mahindra & Mahindra, Reliance Industries, Vedanta, Aditya Birla Group, Welspun, and JSW Steel. There’s also Tesla, BMW India, Harley Davidson, Volkswagen India, and private equity firms Advent, Apax Partners, Blackstone, Arpwood Partners, and Kedara Capital. Of the top 12 bankruptcy/insolvency cases in corporate India today, Khaitan & Co is working on nine, including Essar, Electro Steel, and ABG Shipyards.
Understandably that sort of business puts a firm high on the ranking tables. Khaitan was No. 2 by deal volume in the Mergermarkets 2017 third quarter league charts, No. 3 by deal count in Bloomberg’s third quarter M&A league tables, and ranked as a Tier 1 Indian law firm by legal ranking firm Chambers & Partners for corporate M&A, private equity and competition and antitrust. In November, Khaitan & Co was awarded Law Firm of the Year for 2017, at the Asia-Pacific Legal Practice Awards in Hong Kong.
Mumbai was never on the cards for Khaitan & Co. The senior partners considered it an expensive city, already full of competent, well-networked lawyers. They were content being a respected Kolkata law firm, with deep connections to the business community there. Enter Haigreve Khaitan, alumnus of La Martiniere School and St. Xavier’s School, and Calcutta Law School. “Haigreve is an average quiet person, without any special qualities,” says his father, Pradip “Pinto” Khaitan.
“The learnings osmosis there (at Khaitan & Co) for younger lawyers is highly synergised across teams.” Aanchal Arora who began her career at Khaitan & Co, and now heads her own digital marketing firm.
Brutal paternal frankness aside, it’s a fact that Khaitan doesn’t come across as someone who is out to change the world. His wife, Tarulika Khaitan, says she never expected her husband to take the huge decision to move to Mumbai. She describes him as a “focussed type, who only sticks to what’s relevant in a matter”.
While those who know him best describe him in less than flattering terms, there’s the undeniable fact that Khaitan took the bold (and risky) step of moving to Mumbai and pushing his company into the big league in a little over a decade.
In what I come to understand is typical Khaitan behaviour, he dismisses a lot of his success, attributing it to the fact that he was “born with a silver spoon in my mouth and welcomed into the family firm with a red carpet”. Indeed he already had clients, thanks to the firm’s connections with the Marwari business community in Kolkata.
Grandfather B.P. Khaitan was on the board of Hindalco; the law firm had good relations with the Aditya Birla Group, the RP- Sanjiv Goenka Group and others from Kolkata, including B.L. Kheruka of Borosil, Dhruv Khaitan of Venture Infotech, and Raghu Mody of the Rasoi Group. It was the feedback from some of these contacts that made Khaitan think seriously of moving to Mumbai.
In 2000, Khaitan & Co advised on the sale of C.K. Birla’s earthmoving business to U.S. giant Caterpillar. DSP Merrill Lynch were lead bankers to the deal valued at Rs 1,000 crore. The deal was significant to Birla, who was under some financial pressure.
Rajeev Gupta of DSP Merrill Lynch remembers being surprised that none of the Khaitans (nobody from the family) were around during the transaction. “Employees at Khaitan & Co are empowered, which is unlike most law firms,” says Gupta. At the time, he told Khaitan that should the firm ever move to Mumbai, it would have his full support.
That same year, Hutchison Telecom of Hong Kong acquired Usha Martin Telekom. Khaitan represented Usha Martin in this deal. At the Hutchison Prabhadevi office, Geoff Caroline, the general counsel for Hutchison, told Khaitan that if he was based in Mumbai, Caroline would hire them in a flash.
The conversation that really inspired Khaitan to up sticks and move was the one with the founder and chairman of Vedanta Resources, Anil Agarwal. Over a cup of tea at Agarwal’s home in Mumbai, Khaitan heard the story of how Agarwal lived in a shared apartment in Colaba when he first came to Mumbai. Those who worry about security in life are those who will take no risks and see no growth, Agarwal said bluntly, adding that Khaitan should make the leap, leave everything and move to Mumbai.
All this played on Khaitan’s mind, and finally, in 2001, all of 30 years old, he decided to set up shop in Mumbai. Along with Ravindra Jhunjhunwala and cousin Prabhay Khaitan, he moved to Mumbai to a 2,000 sq. ft. office at Meher Chambers in Ballard Estate. The change from a family firm had begun.
Khaitan is unlikely a lawyer as they come. Low-key to a fault (he “likes expensive things that look cheap”, says his father), Khaitan reveals no hint of the drive that’s below the surface. He’s soft-spoken, with no hint of flamboyance in speech, dress, or even vehicle. (For years, he drove a Mahindra XUV500 to work, in a world that judges success by BMWs and Audis. Only recently, he traded that in for a Volkswagen SUV.)
But beneath the gentle, understated exterior is a tough-as-nails lawyer who is admired even by the competition. “[Haigreve] is a very astute lawyer, and it’s a pleasure to be on the opposite side,” says Zia Mody, who adds that Khaitan & Co’s growth in the past decade has been remarkable.
Cyril Shroff of Cyril Amarchand Mangaldas adds that it’s “easy to deal with” Khaitan, saying “he’s genuinely humble and very respectful”. Those traits, often seen as old-world, are what Shardul Shroff also admires. Having worked with Khaitan over the years, Shardul Shroff says he doesn’t remember Khaitan getting aggressive. “In fact, he even leans towards being deferential to seniors in the business environment, which may be a cultural trait for him,” he says.
Rs 500 Crore - Khaitan & Co’s revenue last year was north of Rs 500 crore from a team of 540 lawyers.
Clients echo that respect. Kumar Mangalam Birla, chairman of the $41 billion Aditya Birla Group, who’s gotten to know Khaitan well over the past seven or eight years, says: “There’s such a high level of intellectual integrity and competence with Haigreve that once I know that a matter is under his watch, I don’t need to worry about it.”
Sanjiv Goenka, chairman of the RP-Sanjiv Goenka Group, says that he can go to any lawyer for a solution but he sticks with Khaitan because of the speed of responsiveness. “The issue may be restructuring or a strategy or legal, but I don’t want to be tearing my hair out trying to figure out various sections and clauses,” Goenka says. What he wants, he says, is someone who gives him a 360-degree view, in simple points of importance in a single day or so, and he says he gets that with Khaitan every single time. “Haigreve Khaitan would be my first choice.”
Such universal acclamation is worth a lot, but is a sharp legal brain and respect for and from others in the profession enough to push a law firm up the charts? Perhaps not, but that’s not all Khaitan brings to the table.
One of the things pretty much everyone talks about when discussing Khaitan & Co is that this is a law firm that practices democracy. It’s not just that Khaitan’s office is like that of the other partners. It’s also that there’s no “star” or “rainmaker” in this firm. That fact alone may explain some of the company’s growth, which can be linked to its fees. “Its pricing for local (India) matters is lower than the top three firms with an estimated cost that is some 20% less,” says Shardul Shroff, agreeing that the absence of a star lawyer may allow for lower rates.
Aanchal Arora, who heads a digital marketing company that she founded, started her career at Khaitan & Co, a firm she carefully selected soon after she graduated. She was looking for a large law firm that actually decentralised management, and everyone she asked pointed her to Khaitan. While there, Arora says that she was mentored by multiple partners including Abhimanyu Bhattacharya and Sudhir Bassi at capital markets, Vineet Singhal and Abhishekh Sinha at general corporate, and Vivek Mimani at the funds team. “The learning osmosis there for younger lawyers is highly synergised across teams,” she says.
To be sure, the practice of empowering all employees is something Khaitan seems to have inherited. Rajeev Gupta of DSP Merrill Lynch noted this about the company in its Kolkata days.
More important, Khaitan knows the value of being entrusted with work that could be seen as way beyond a pay grade. Back when he was just about 21, he remembers helping out in many of the deals Pinto Khaitan managed for the legendary R.P. Goenka, the founder of the RPG Group.
On one occasion, he recalls being called in by senior partner (and his mentor) P.L. Agarwal to draft a ‘hard underwriting agreement’ for Goenka. “I didn’t even know what that was,” recalls Khaitan, explaining that he then discovered that it meant a contract with no exit clauses; once signed, it had to be funded at the price mentioned. He remembers scrambling to draft that, and then rushing to Duncan House, Goenka’s Kolkata office, where the document was signed. It was 1991, and Khaitan was still wet behind the ears, but a senior partner trusted him with a critical deal.
“The transformational drive towards institutionalising Khaitan & Co in the last few years may have seemed disruptive in the Indian legal community, but should well prepare it to thrive in a growingly competitive and globalising business world.” - Pradip “Pinto” Khaitan, managing partner, Khaitan & Co, Kolkata
Pinto Khaitan also talks about 1991, the year Calcutta Electric Supply Corporation (CESC), a key part of the RPG Group, did its first off-shore fund-raising. To assist in this, RPG had engaged a British law firm; Khaitan & Co made up the Indian legal team. The British lawyer would land in India at 3 p.m., recalls Pinto Khaitan. He would head straight to the office and work through the night, going back to his hotel at 4 a.m. for breakfast and a shower before returning to work. “Haigreve would follow the same routine, and begin work the minute he landed and break when the British lawyer did,” says Khaitan senior.
Those early experiences shaped Khaitan the manager, who today wants all his team members to be able to take decisions without waiting for a senior partner. If there’s a meeting with say, the chairman of Reliance, Mukesh Ambani, Khaitan will never insist on being part of the meeting. It’s uncommon to see that across other larger law firms.
Birla says that any successful firm can attract talent in the short term. “My sense is he’s been able to retain his partners because he gives them skin in the game and a lot of leeway.”
Over the course of my own interviews with employees at KCO, never once were there any stuffy communications protocols, or bottlenecks that led up to the top. Every lawyer, junior or senior, that I spoke with was unfettered, and had no problem talking about their work.
All of which brings us to Khaitan the CEO. Tina Gosar, chief financial officer of Khaitan & Co, joined in 2001, when the Mumbai office was just taking shape. Over the years, she says, she has seen the human resources function grow from a couple of people to a full-fledged team of 12. It’s all part of how Khaitan himself sees HR. “The way I see it, HR and people are the most important platforms to building a firm that last a long while,” he says.
Gosar adds that the creation of new boards such as the nominations and remunerations committee help to oversee partner level talent hires, compensations, as well as rewards. “In many ways, compensation is the core of any law firm,” she says. But it’s not just about acquiring and retaining talent. Khaitan is very clearly focussed on business strategy as his early hires demonstrate.
In 2013, Sudhir Bassi, Morgan Stanley’s managing director and head of corporate finance, was hired as a partner-level executive for its capital markets practice. Then in 2014, KPMG partner Gautam Chemburkar, whose experience lay in project finance, fundraising, and acquisition, was brought in as the firm’s first executive director of strategy. Such senior-level hires outside of law are few and far between for large firms, but Khaitan’s corporate bent began even earlier. In 2005, the firm introduced national practice groups, and introduced a firm-wide CFO (Gosar), as well as a COO (Nilanjan Ghose).
The firm has since expanded beyond Mumbai, but Khaitan has always made it clear that his aim is “to make the company feel like one office across four locations, not four different offices in four different cities”.
“There’s such a high level of intellectual integrity and competence with Haigreve (Khaitan), that once I know that a matter in under his watch, I don’t need to worry about it.”Kumar Mangalam Birla, chairman, Aditya Birla Group
To this end, the Khaitan & Co six-person management committee has representatives from all the branches: two from Mumbai, two from New Delhi, and one each from Kolkata and Bengaluru. The management committee has since evolved to become the executive committee and is made up of seven lawyer partners who are elected. Three are Khaitans (there are seven family members in the firm) and the other four are outsiders.
The clear, and overarching, goal is that Khaitan & Co is more than one towering personality; it is a law firm in the true meaning of the term. At a time when the legal business in India is seeing an unprecedented churn, this may be the way to go. The rise of boutique firms, as well as large accounting firms now offering a bouquet of legal services, has got existing law firms rethinking their strategy.
As business in India enters a new trajectory defined by hypergrowth, law firms are playing an increasingly large role in influencing policy and strategy. For those interested, there’s even a book that discusses this: The Indian Legal Profession in the Age of Globalization: The Rise of the Corporate Legal Sector and its Impact on Lawyers and Society, published by Cambridge University Press. There’s a chapter in the book that points to how regulations regarding the standards for manufacture, storage, and distribution of alcohol under the Food Safety and Standards Act was assigned to Amarchand Mangaldas some time in 2010.
More recently, Zia Mody of AZB has been on the RBI’s Nachiket Mor Committee for Financial Inclusion, as well as on the Uday Kotak Committee on Corporate Governance set up by the market regulator, Securities and Exchange Board of India (SEBI). Cyril Shroff is an advisor to the RBI’s Financial Market Consultative Committee, as well as the Mumbai Court of International Arbitration. Khaitan himself is on SEBI’s Fair Market Committee.
Even as top lawyers are in demand in policymaking, large corporates often prefer to maintain legal teams in-house. Meanwhile, the threat of the entry of foreign legal firms, something that has been talked about for years, hangs over the profession. While some senior lawyers don’t think it will happen or change the way domestic firms operate because the legal system works differently here, there’s something it will be worth keeping in mind: that the big four accounting firms eventually all came to India.
So is Khaitan’s approach—he runs the firm and partners run the deals—smart management delegation? Or is it a strategy to ward off competition and reach optimum valuation for an acquisition if foreign entrants are eventually allowed in? Either way, it’s a journey that is likely to lead Khaitan to building the most institutionalised firm in the country, something the senior partners back in Kolkata seem to approve of.
“The transformational drive towards institutionalising Khaitan & Co in the last few years may have seemed disruptive in the Indian legal community, but should well prepare it to thrive in a growingly competitive and globalising business world,” says Pinto Khaitan. For sure, the small fish that came in from Kolkata is getting ready to take on a far larger pond.
(The article was originally published in the March 2018 issue of the magazine. )