Luthra and Luthra Law Offices, one of India’s oldest and most prominent law firms, has come under intense scrutiny over the past three years, subjected to questions about the sustainability of its structure and business model as well as about the firm’s founding partner, Rajiv Luthra, and his management of the firm.
Last month, in a bow to the scrutiny, Luthra and Luthra rebranded, naming itself—or actually renaming itself—Luthra and Luthra. For a short time, between 2018 and this year, it was known as L&L Partners, and at the time, the firm told local media that “L&L” was more representative of its partnership.
In its more recent press announcement, the firm called its latest rebrand “The great comeback,” noting that keeping its double “Luthra” namesake is telling—that it reveals a lot about the firm.
The scrutiny really started to mount in 2020, when Rajiv Luthra expelled former senior partner Mohit Saraf over arguments around the lack of equity sharing. At that time, Luthra held 99% of the L&L’s equity, which was split between two firms—one focusing on corporate work and the other on litigation.
Saraf was very vocal about the spat and later took Luthra to court, which ruled that the expulsion was illegal. That allowed Saraf to poach L&L clients, lawyers and staff when he founded his own practice in 2021. Scores of lawyers started leaving L&L, just as the Indian market was booming. Luthra’s rivals grew stronger, forcing him to finally make some pertinent changes.
“What has happened over the last two years, was that desirable? The answer is no. Did we want it to happen this way? The answer is no,” said Luthra. “But the beauty is that it happened.”
In its new incarnation, Luthra has hired Lalik Vij as the firm’s business management executive and has brought on Harvard Business School’s Ashish Nanda and Silk Legal Consulting managing partner Valerie Bowles as consultants, charged with helping the firm with its restructuring and reorganization. The firm also now has a new executive, management and subcommittees to drive the firm’s strategy and address issues related to firm culture, talent hiring, development and retention, footprint and expansion.
But perhaps the biggest transformation, at least for Luthra and Luthra, is the firm’s equity dilution. Rajiv Luthra says he has given away 25% of his coveted equity as of July last year, and the intention is to bring that ownership down further, to 30% or 35%.
“The trigger was the need to make it an institution,” said Luthra, referring to the firm.
It wasn’t the first attempt for this type of change. L&L had actually hired McKinsey seven years ago to help with its restructuring, Luthra said.
“McKinsey consultants flew down at our cost and spent five or six days in our different offices. They came up with a report on how to institutionalize the firm but it didn’t work out because of various situations,” Luthra explained. “But I’m not making excuses, I know that I’m the captain of the ship and I should have made sure it happened.”
A lot of the partners objected at the time because it would have meant they would lose power “and they didn’t like that,” Luthra added.
The departure of 63 lawyers from the firm’s litigation practice in July was also a demonstration of displeasure.
That practice had been established as a separate entity from the corporate practice, but Luthra owned and controlled a majority state in both. The establishment of a litigation arm was sealed “with a handshake” by a small group of litigators about 30 years ago, Luthra said. The practice had been running for a long time with a separate profit pool but earlier this year Luthra dissolved the litigation firm, hoping to merge its contentious practice lawyers into its main corporate arm. Instead, many chose to leave for rival firm DSK Legal.
“When you have different legal entities, it starts playing on your culture and how you operate,” said Vij, Luthra’s new head of business management. “While from the outside it looks the same, some divisive issues keep coming up, which doesn’t give the feel of ‘one firm’.”
Too Little Too Late?
To be sure, Luthra and Luthra isn’t the only Indian firm to have gone through upheaval. The Shroff brothers—Cyril and Shardul Shroff—split up legacy Amarchand Mangaldas Cyril A. Shroff & Co., to set up separate firms in 2016. Another prominent firm. Nishith Desai Associates, which is widely known in the local market as a sole proprietorship, has in recent years suffered scores of lawyer departures.
In many ways, the disruption to the traditional ways of long-standing law firms has given rise to younger rivals. Particularly as the Indian market continues on a trajectory of foreign investments and blockbuster domestic deals, the incumbents are finding that fixing their issues, and doing so quickly, is critical so they don’t lose more market share.
Luthra and Luthra is making pace, its founder says, having recently replenished its partnership with senior lawyers from counterparts like Shardul Amarchand Mangaldas & Co and IndusLaw. The firm is also starting to consider its cross-border footprint. Luthra says New Zealand is a possible target because it plays to the firm’s strengths in projects and project finance work.
“We are probably the first firm to see that India desperately needs natural resources,” he said. “It’s only a matter of time before we run out of natural resources, and New Zealand has an abundance.”
By being in New Zealand and having the knowledge to back up large acquisitions of mining companies and resources like gold and oil, Luthra and Luthra “could have first mover advantage,” the firm founder said.
Who is Luthra Really?
To the Indian market, Rajiv Luthra is a name that is both revered and feared.
The law firm founder started off as a tax advisor and established his own tax consultancy. At the age of 31, he went on to study law in the U.S. He launched his own corporate law practice in 1990.
It’s a story of rags to riches, but Luthra’s story is not just about the immense power he has accumulated, he contends. He says he has invested heavily in the firm so the practice can outlive him. The COVID-19 pandemic presented a great example of his leadership, he added.
“I have not taken a rupee from the firm for the last two and a half years,” he said. “I just kept on accumulating that as a war chest to survive.”
In the months before the pandemic, Luthra said he proposed to the partnership that it invest in a new server to increase efficiency. The partners reached a consensus and rejected the idea, but Luthra overrode their vote and went through with the investment. As a result, he said, the firm was “lockdown ready” when the pandemic hit.
He believes he knows best.
“I’ve never had a boss, I’ve never worked for anybody in my life,” he said. “While that may be good or bad, I don’t know, the jury’s out on that. But I know this much: I am not restricted by someone else’s knowledge.”
“I joke about this—I make the entrance of a satiated benevolent dictator, the father, and that’s me,” he said. “They can’t bully me because I’m sovereign.”