A Harlan-Fiske Stone scholar, Valerie Demont holds LL.Ms from Columbia Law School and Université de Paris I – Panthéon Sorbonne. After a long stint as a partner with Baker & McKenzie, New York, she moved to Pepper Hamilton LLP about a year ago. Bar & Bench, in conversation with Valerie.
Valérie Demont joined Pepper Hamilton LLP as co-head, for the India Practice Group, from Baker & McKenzie, New York about a year ago. Practicing mostly on US and cross-border mergers and acquisitions, capital markets, corporate finance and securities matters, she has been involved in numerous transactions across Europe, Canada and Asia. A Harlan-Fiske Stone scholar, Valerie holds LL.Ms from Columbia Law School and Université de Paris I – Panthéon Sorbonne. Pepper Hamilton has been looking at India for a while now. Valerie tells us why?
It is a combination of various factors. Personally, my husband is from India. Many years ago I believed India was poised to emerge as a significant business and trading partner for the United States, and therefore the need for Indian legal expertise in US was bound to grow. Around the same time, I advised an Indian outsourcing company on the listing of its IPO on the NASDAQ stock exchange. I see India as practice potential for lawyers, and this is a new partnership with the US.
Pepper’s India practice group
We are a 120-year old firm with about 500 lawyers across practice areas in the US. Our India practice is not one specific group. We do not have lawyers dedicated entirely to the India practice. So, it’s really a cross-disciplinary practice and no one is dedicated to India.
Some large firms, say with 2,000 or more attorneys, have practices entirely dedicated to India. I don’t think our model is very different from that of a mid-tier firm. We have some lawyers within the firm who do 90 percent of their work with India. We just haven’t formalised a group because we like to have the flexibility of bringing in the best talent. Eventually, there are going to be some lawyers who will work entirely on the India practice, I’m pretty sure of that.
The India market
Full of potential. I think that the opportunities and the market are growing rapidly and they are very, very big. It is not an easy market; you need to spend many years in India to know the Indian system, legal, business, building relationships, but for firms that have the commitment, the long term view and the staying power, it is definitely a very strong and interesting market. You can see that investment between US and India has seen an exponential growth, so the legal service to the business development is only going to grow.
Pepper’s India strategy
Our strategy is twofold. We are growing our practice representing US investors going to India. They are talking manufacturing companies, industrial and technology providers, and looking to invest in India or buy out Indian firms. We also represent funds that raise capital to be deployed as investments in India. At the same time we are growing our practice representing Indian companies who are looking at doing business in the US.
We used to have an office outside US, but we abandoned that strategy. We focus on being the best at what we do, i.e., being the best US lawyers. For all our India related work, we work with the best Indian firms. We work with some large national firms, firms with a strong regional presence and smaller boutique firms depending on the nature of work.
We really think that we give the best service to our clients with their international needs. If we had an office abroad, it would end up being a smaller office with some not-so-strong areas of expertise, never a full service law firm. If we had a client who wanted to do business abroad, we would have to refer their business to the local office abroad even though that office may not have the expertise that the client needs. Therefore, at the end of the day, you’re not servicing your client well because you’re forcing them to go through your local office which may not be the best choice for them.
We may need to use an outside law firm’s expertise on certain issues which will add to costs and create multiple players. In which case, you’re just not giving the right cost effective service to your clients. In the US we are a cost effective practice because we do not have to support an international platform. International firms charge their client a higher fee because they add the cost of their international platform. It is really about giving flexibility, the best quality and diversity to your clients and the same time keeping it cost effective.
Sometimes we lose deals because we do not have offices in London or Singapore. We think our model works well for us and if we lose a couple of deals because we do not have offices abroad, the costs outweigh the benefits of that deal. A lot of financial companies who invest in India, are based out of New York and would like to use their local counsels, so it’s not been an issue for us.
A tie-up with an Indian firm
We are not going to tie up with any firm. We haven’t tied up with any firm in any country whatsoever. In addition we are very mindful of the restrictions on doing business in India. Our model not to tie-up with anybody, no exclusivity with anybody, and we work with the best law firm, which we select depending on the nature of the transaction, the expertise that is required, the geography, and the needs of our clients. Therefore, we believe that this model really gives us more flexibility to come up with the best partnership for our clients in any given manner.
There are many firms we like working with, share common values, have the same working principles, and we trust their work, the quality and responsiveness. Over the years that we have gotten to know and worked with several firms and we are going to continue doing that and are not going to enter into one ‘best-friend’ relationship with any firm.
Preferred India firm
We do a lot of work with Luthra and Luthra, Jyoti Sagar Associates, Nishith Desai Associates, Mulla and Mulla, and Amarchand. There is no favourite firm and it really depends upon the deal, the client and the expertise necessary. Then we work with the firm that has the best team to service the particular client.
It’s really a combination of factors. Primarily, the economic situation that we were in about a year ago, made me realise that to grow my India practice and be more effective, I needed to join a smaller, entrepreneurial, flexible, nimble firm, more in line with the Indian business culture, and that’s what I did, and I think it is the right choice.
One year hence
Well, the revenues are growing, the numbers of deals are growing, and we are getting more diverse deals. We have built strong relationships in India, and we are adding more associates who are India qualified and trained. I cannot really put a number to this, but I think within a year, we easily will double or triple what we are doing right now.
Outsourcing to India
We have started an initiative to reduce costs and become better service providers at Pepper, and that includes a discussion on outsourcing. I’m a big fan of outsourcing, having seen the benefits. So as a firm looking at cost cutting, better service measures, outsourcing is in the works.
Lawyers Collective vs. Ashurst
This decision is not going to have an impact on our India related practice; in fact it’s an endorsement that we’re doing it the right way, which is to work with an Indian firm. I think in the long term, the restrictions on foreign law firms practicing foreign law in India are going to come down, but not anytime soon. Europe faced the same issue decades ago, and eventually all the barriers to entry have come down and today, you have a large number of foreign law firms practicing European law and foreign law.
When barriers come down in India, firms like Amarchand and Luthra would come out very strong and continue to do work, as long as these firms transform themselves a little bit in establishing succession planning. They are going to need to start building some real equity partnership, increase levels of compensation, and focus on retention, promotion and better management practices. Some of the Indian firms are aware of that and are working very hard at addressing those issues and I think once they’re ready, you’re going to see the barriers go away.