A Fiduciary Relationship: The story of the Advocates Mutually Aided Co-Operative Society

For the last fourteen years or so, a co-operative society in Hyderabad has been quietly working for the welfare of lawyers. Starting out with the sale of stationery and stamps, the society currently provides life and health insurance to four thousand lawyers practicing in fourteen courts. And the source of the society’s funds? The lawyers themselves..Like more than a few great stories, this one does not have the happiest of beginnings. It was the year 1999, when B. Shanker and a few other advocates stood in the house of a recently deceased lawyer. The lawyer, seen in the courts just the previous day, had died after suffering a heart attack. There to console the family, Shanker and his friends were shocked to learn that the family members did not have enough money to transport the deceased back to his native village..“You know what they did? They tied his body to the matador van. We tried collecting money from lawyers, but our income was so low that we could barely raise five thousand rupees.”.Shanker is a grizzled veteran of Hyderabad’s district courts, possessing a booming voice and a slightly intimidating presence. When he talks, he waves his fingers to stress a particular point, and repeats his words to make sure he has been understood. But when he recounts that day close to fifteen years ago, it is almost as if the advocate’s gown is shed for a few minutes, and you get a glimpse of a young, disheartened lawyer. Perhaps it is a glimpse of a mournful friend?.Disheartened though he may have been, it was this very incident that led to the formation of the Advocates Mutually Aided Co-Operative Society. As the nomenclature suggests, the society was set up exclusively for the aid of lawyers. And its composition would be lawyers, and lawyers alone. The society was headed by eleven Directors and one Secretary. The founding Secretary was Shanker; just last month he was elected as the society’s President..A photo of these twelve lawyers hangs on one wall of the society’s conference room. Peer at the faces and you see twelve lawyers with somber faces and polished shoes. It is doubtful that these twelve individuals would have imagined that the society would become the success it eventually did. Extremely doubtful..Initially the society started off selling necessary items such like stationary, court fees (before the Telgi matter closed this avenue down), and stamps. With one, single stall in the Hyderabad city civil court, the twelve lawyers would take turns sitting at the counter..“We would tell each other, “Arre bhai tu beth” (Why don’t you sit at the stall) and manage the day somehow. Then we got a single employee to sit at the counter. Now we have sixty employees.”.The growth did not come easy. Initially, the biggest hurdle to overcome was the lawyer community itself. In a profession where cynicism runs deep, and jealousies are all too common, the society’s honest intentions were met with suspicion..“The first thing they said was, ‘khaane ka aur ek tareeka’ (Just another way to swindle money). We did not get bothered. Bolne do (Let them speak)”.It is difficult not to smile at the typically Hyderabadi way of speaking, with just that delicate twang to keep your ears interested..Even with all items sold at face value, daily collections soon began crossing ten thousand rupees. It was a sum far greater than they had thought was possible, and one of the first things the society did was to start providing life insurance to its members..“In case an advocate dies, we would provide fifty thousand rupees. We raised this from time to time. Now, [the insurance payout] is five lacs. Any death arising out of an accident would mean an additional payment of ten lacs. We even give twenty thousand in cash for taking care of funeral expenses.”.The society’s corpus wasn’t built through membership fees (five thousand rupees) or sale of stationery though. The biggest contributor was the issuance of fixed deposits, especially those that were to be used as surety for bail bonds..“Whenever a bail bond is to be made, the [lawyer] would come to one of our counters and make the deposits. On this we would pay four per cent interest, while national banks pay six per cent. We in turn deposit the amount in the national banks. So it is difference of interest that is our main source of income.”.It is an idea that is beautiful in its simplicity and one that lawyers find particularly convenient. With counters located either right next to or within court premises, lawyers don’t have to travel too far to get their work done. What is more, these counters were open way beyond normal banking hours..Soon, the society began offering loans against the mortgage of loan. The presence of a surety means that recovery, if ever resorted to, would never be a problem. This has gone on to become one of the biggest sources of revenue, with profits of two crore last year alone. And when it comes to defaulters, there has not been a single one. Not a single one..“We are giving a loan against security. Not housing or car loans where recovery becomes a problem. Forget recovery, lawyers have a flexible payment option. And you know, we have not faced a single problem yet.The success story is the confidence we have built up amongst the advocate community with respect to the transparent transactions of the society. That faith, in turn, has encouraged us to grow.”.Apart from the sound financial fundamentals, it is this feeling of solidarity and trust that has allowed the society to meet with such success. It is difficult to believe that all these loans have not yet resulted in a single litigation, yet that is the truth. This is a country where lawyers belong to that rare class of citizenry that finds it difficult to obtain credit cards. Yet, here in Hyderabad, the fear of default is non-existent..And it is not too hard to see why. Over the years, the society has begun offering free mediclaim (upto a lac), held medical camps for lawyers, and even has four doctors on its roll to provide a free check up and prescription. Apart from the revenue, it is the generated goodwill that has really allowed the society to grow. The society now has fourteen branches, each equipped with a CCTV and fully computerized banking systems. The society employs an internal and external auditor, the Directors are chosen through elections. Before the start of each year, a chart of the year’s activities are prepared and distributed to each Director, ensuring that there is unanimity in future planning. .In the last decade or so, the society’s Directors have visited a number of bar associations at their own expense, encouraging other lawyers to replicate the model. In fact similar societies have already been formed in Medak, Warangal and Nizamabad district courts. .The society has even funded the construction of court canteens, renovation of court libraries, toilets in the court premises, and now plans to construct a library for lawyers in central Hyderabad. And given the pace of the society’s expansion, it would be unwise to dismiss this as lofty ambitions..And to think it all started with a family unable to afford the funeral of a lawyer..“We have seen dead bodies tied to the van. We don’t want to see that ever again.”