Bahram N. Vakil, Co-Founder & Senior Partner at AZB & Partners speaks about Life, Luck and Lessons
Bahram N. Vakil, Co-Founder & Senior Partner at AZB & Partners speaks about Life, Luck and Lessons
My mom was a very good tennis player and represented India in athletics and bridge and is very sorry that none of her kids could come near that. My father and mother taught us the basics. In fact, everything I tell you today, you’ve heard and read about many, many times. So, no new lessons but I’ve gone through them in my 65 years, and I know that these are truisms are real. Sorry to Soli and many other lawyers in the room, but I don’t think it’s really rocket science. It’s just a lot of hard work and commitment. These are the lessons I learned – there are no shortcuts in life, humility, and treat every human being with the same respect and with the same dignity.
Unfortunately, we live in very difficult times, we don’t treat all 8 billion of our population the same way. I’m not getting into politics, not saying that Hamas was not absolutely horrific and barbaric, but there is nothing truer than what Gandhiji told us all those years ago: An eye for an eye really makes everyone blind. So, hatred is really a wasted emotion. And, it is not a solution.
You know, the average age of the 2.3 million Palestinians is 22. So, imagine the resentment, the generational resentment that you are creating. So, just a quick story of something that has stayed with me. I was six years old. My father had gone for one of those day trips to Delhi. It must have been a difficult case. Obviously, it didn’t go very well at the airport. He was quite upset that his driver and car were not there for him. He asked, where’s the driver? Turned out, they had met with an accident, luckily no one was hurt too bad and he was in the lockup. So, my dad went straight to the lockup at around midnight, posted bail, did whatever was necessary and brought the driver home. And my mother was obviously upset that after a long day, did he have to go at midnight? Why could he not have gone the next morning? And his reaction was, if it was one of your kids, would you have waited the whole night and kept him in the lockup? So, this is the kind of thing that just stays with you.
On to my wife and kids. I don’t know, maybe they didn’t have a choice but all of them are here today. I’ll start with Aarti. Many of you know her and very sensibly told me we should have asked her to speak instead of you. So, you know, I learn every day from her; and we’ve known each other from the start of our career, literally, because that was in Little & Co. in 1982. And, just one thing I want to say is that there are some things that happen which you regret and realise that you should have been more courageous and more mature at the time. And I want to be very, very clear. I spent a fantastic 20 years at Little and I’m sure Aarti would say the same. We had a fantastic set of seniors. We got all our basics. It was our early years. But, when we look back at life, there are a few big things that we could have done differently.
It’s a really old firm and they had some crazy views about women as partners. Of course, that’s long changed. So, at the time, even though they certainly knew, and I say this hand on heart, that she was the much better lawyer, would have been the much better partner, they decided that their system did not allow a woman.
And a lot of the partners, including Mr. Dara Mehta, that I just alluded to and some of my other seniors, told me that just tough it out. You know, they will not lose both of you, so when they offer you, refuse. And I’m sure it was absolutely the right thing because three, four, five years later, they did do that. And Dina Wadia became a partner. So, this is certainly a regret I carry through my life.
Onto happier things. I’m blessed that not only do I learn from my parents and my wife, but I also learn from all my five children who are here today. Once again, hand on heart, they are all much brighter, more conscientious and fantastic. And in terms of humility, it’s very good because every day they dash me to the ground if I ever think that I’m doing too well. And now I’ve got an added bonus for that because my four-year-old granddaughter, the other day when I refused to give her a third lollipop, said, you may think you’re a good lawyer, but you’re a useless grandfather. So, my heartfelt thanks to all of them.
I’ll go on to my career. I’m not trying to give any kind of false modesty, but what I experienced is that luck played a huge role in my career.
I worked a few years in the US at a very good firm called Debevoise & Plimpton LLP. A month before my interview with them, imagine how times have changed, that we were the first Indian lawyers they had ever interviewed and planned to keep. In fact, Zia and my paths crossed, and I think in the whole of New York, the number of Indian lawyers was in single digits. That’s how far we’ve come. So Debevoise interviewed Dhananjay Chandrachud. I hope everyone in this room knows who he is. And he is, you know, a super bright, fantastic lawyer. And as my daughter keeps reminding me, you know, he went to Harvard, I was at Columbia, and there’s a huge difference between Harvard and Columbia. So, I didn’t dream that they would not take Dhananjay as the first Indian lawyer they ever had, and instead take me. And when I, after I’d worked for a few months there and I got to know them, I asked them how could you have messed up so badly, why would you choose me? And they said it was just luck. Dhananjay being Dhananjay is always a straight shooter. They asked him what do you plan to do and his dream was always to become a judge and to go all the way which is I think great for India that he did make it to Chief Justice.
So, a commercial law firm in New York preferred someone going into a firm in Bombay rather than a judge. So it was just great luck. And the other point I want to say about Debevoise again, it taught me, the skills of being gracious and proactive. On day one, the founder Mr. Debevoise was still there. He must have been in his late 70s. So, a first-year associate and Mr. Debevoise were standing at the door to welcome me. That is something that just doesn’t leave you. And he said, “Don’t feel the pressure, you’re only the first Indian. We really hope you do well. We would like to employ a lot of Indian lawyers, but don’t feel any pressure.”
So then, I come back to India and Little & Co. as I said. And it was luck again because of two reasons. One is that we all know again what happened in ’91. It was a sea change. We opened up in a very large measure and therefore changed the practice. Practising law today from what I did in my early years is like you were an orthopaedic and now you’re a urologist. It’s like a completely different job. I would go to court three times a week. I’ve done tons of real estate, IP, etc. You just did everything, whatever you got, you did it. So, ’91 brought in corporate law, joint ventures, M&A, etc. And so it was a huge boost.
Again, fortunately right time, right place. And then for me, totally bizarre, they opened up the power sector. MSEB came to Little & Co. The partner who was looking after them was a guy who did real estate regulatory lit. He said, “Behram, this sounds like some kind of corporate stuff, though it was project finance, which none of us knew one word about, so you better take this case.” To tell you how little we knew, when I asked the MSEB guys, how long will you need me for? How long will I be busy? They said, 7-10 days. It should take about 10 days. It took 3.5 years. So, we were very low on the learning curve, but we learned very fast. I was super fortunate to get into a brand new area. As happens in India, in six years, I did 35 power projects. In Linklaters or whatever Wall Street firm, someone would do 30 projects over their career span, but India always gives you that volume. Therefore, you learn super-fast. And, besides the power projects, there were airports, ports, roads, etc.
It was a real boom until one of those global recessions in ’98. And then, of course, the dot-com bubble. But that stretch, that decade was really busy and largely due to the right time, right place.
So, very quickly, why I love being a lawyer is when you’re doing a power project or a port or whatever, you need to do a deep dive into that space. Compared to any novice, I would know what is plant load factor, heat rate, calorific value, and I know our coal is awful because it has high ash content. So, you learn a lot about the industry you’re working in and you really need to do that because, at least in what we do, you want to become the trusted advisor rather than just law. As you grow older, the client looks to you for that.
Whether it’s automobiles, chemicals, pharma, you learn about new things. It’s fantastic to keep learning. It’s something I really enjoy and my kids think is very amusing. So that was Little. I left with a very heavy heart. I was the first partner to have ever left at that time. In its over 120-year-old history, no partner had left. Times have changed. There was much more stickiness.
And, how is it we started? Again, pure good luck. One of our rival firms had been told by their consultants to bring in fresh blood. And, very cleverly, they thought of bringing in Raian Karanjawala, who is one of the best known litigation lawyers in Delhi – his firm is the top litigation firm, Zia who was a very well-known barrister and had just started commercial work as well, and myself. It was a smart idea because the three of us were very good friends. So, they thought it’s a… but that didn’t work out.
But Raian, who is always very involved in everybody’s lives, told both of us that although this didn’t work out, why don’t you both consider starting a firm of your own? You all have been talking about it for so long and so we had one dinner and shook hands. So that’s the story of AZB and again 2002 and as all of you will remember from 2002 to Lehman in 2008 were absolutely boom years. Global boom, India boom, so it was just fantastic for us to become such a major player in a huge country like India in three years and that is only because Zia works 24×7. But we have a fantastic team of lawyers and again the timing was really good.
Going forward, to keep it chronologically right, I worked with Raghuram Rajan who then became the governor of the RBI. Again, that was just good fortune and he had a committee for making Bombay a global financial centre and then he became the RBI governor and I worked a little bit with RBI when he was there. I think Raghu’s the kind of guy who was very proper and therefore did not want to give us too much work. He knows both Zia and me very well because of our friendship, but I got to know them – his team – quite well. And then the bankruptcy code happened. I’m sure there may be many in this room who think that it was a crazy thing that happened. And my wife was certainly happy because after the enactment, half of our social invitations were cancelled. But again, I really don’t know how I was chosen to be part of that drafting committee.
I never dreamt it would have such a huge impact on the credit culture in India. And I still have no idea exactly why I was chosen. All I can say is that it was a fantastic experience because it took 13 months to draft, from scratch, a brand new law. It then took 13 months to implement, which is even a bigger task, taking it through Parliament, setting up a brand new set of professionals. There’s no such concept as insolvency professionals. So, it moved really fast. I think everyone will agree the first three years were really amazing. Even through the court system, NCLT (National Company Law Tribunal), Supreme Court, it moved really fast. I think most of the cases and they were all billion dollar cases, the big 12 were done within two years. And globally, whether in the US, UK, anywhere, it would not move faster.
Just one metric to give you a sense of why it was important is that before it, the bad loans of 75-80% of our public sector banks was more than 10%. I think 10.5%. Now it stands at 3%. So, the banks are in much, much better shape. But most important is that it’s changed the credit culture in India in that people are cautious when they borrow, that they will have to repay. If they don’t do that, no human being likes to lose their company. At least from the banks, what we hear is that it has changed, there’s a behaviour and credit change.
ROTARIANS ASK
My first question is that are you going to be inheriting all the art that your mom has?
Certainly not.
My second question is that do you also become like a counsellor? What do you have to do besides being a lawyer when you have clients doing all kinds of things?
I mean, you have to hear a lot of soap stories, that’s for sure. And also, unfortunately, a lot of family disputes and trying to resolve it. But I follow the Gandhiji maxim that one of the key roles for lawyers is to bring warring parties together. I’m not really into litigation. It takes way too long and creates a lot of unpleasantness. It’s just not my character. I figured that out quite soon. But it teaches you that you compromise, I mean once you’re married you know that compromise is the name of the game.
Lady luck chose well, Bahram. My question is can government companies also be taken to Insolvency Court and if not why not? Government companies like National Aluminium Company and other listed public sector companies, can they be also taken to Insolvency Court if they don’t make their payments to the secured creditors?
No, they can. It’s not part of the law, it’s just that de facto it has not happened, but there is no legal bar.
How do you devote time to serving the less privileged, not only being a part of the trust, but the main paucity in this work is lack of talented time because people don’t want to give time to serve the less privileged.
Hand on my heart, we all learned well because my wife runs two NGOs, so it’s kind of built into your DNA. Luckily, it’s there with all my children as well. I wanted to mention it, but I didn’t have the time. I do much more than law with one particular microfinance entity, not for profit. It’s what used to be called a Section 25 Company. And it was not for profit and they went intentionally to Bihar, Eastern UP, now Jharkhand, Chhattisgarh, because at that time no one else was willing to go there in ’98. So, I’ve been working with them now for 25 years. And I’ve seen it on the ground that once they are given an opportunity in terms of capability, or integrity, again with all due respect to all the corporates in to 3.5 now, this is a very sizable portfolio, which is fantastic that a not for profit could lend 4000 crores. And the default is 0.3%. So all the poor women, the largest loan is 30,000 rupees. And all the poor women, even through COVID, the minute they could go back to work, RBI had given a six month exemption. In three months, they were paying back fully. So I think it’s doable. It’s not easy, but it’s doable. And AZB has been super kind, generous. I mean, all this stuff, all the government, public policy, this law part, that’s all what we call pro bono. So maybe I’m particularly blessed that AZB allows me that opportunity.
They say that justice, sort of delayed, is justice denied. And what we see from the outside is that there are dates after dates and cases take decades for the smallest matters. Is there any sort of practical solution one can have to ease up this clogging of the system?
There are people in the audience who know this much better than me because I moved away from litigation quite early. But I find it quite amazing that we don’t use technology more. They’re using it more and more. And case management, like in the UK or most parts of the world, you have to give the exact time you will take. So, in the courtroom there’s no one except that case. The first time I went to do a case in London, I was shocked that there were six people in the courtroom. And this is a long time ago. So I just think that the basics, they would know this answer much better. But I did bring it up with the government once and they just said, you have no idea. I mean, it’s a holy cow. Just leave that. Let’s fix the things we can. I don’t know why.