Story of the startup law firm that is knocking on the door of greatness

Suneeth Katarki started IndusLaw with 3 other batchmates from the National Law School of India, Gomatham Sridhar, Srinivas Katta, and Srinivasa Raghavan in the year 2000. At that point, they just had 4 years of experience each. Suneeth and one more partner were into corporate law, while two others were into litigation. 

In 2019, almost two decades later, IndusLaw is a behemoth. They are present in all 3 major legal markets of Delhi, Bangalore, and Mumbai in full strength and even have a Hyderabad office which was rated the best law firm in Hyderabad for several years. 

While it is not considered a Tier 1 law firm so to speak, it is certainly knocking on the door. According to Legal 500, it is right up there in Tier 1 as far as Corporate and M&A is concerned, while for practice areas like Banking and Finance and Projects they have been put into Tier 2. My sense is that given its growth and upward trend it may be visible as a Tier 1 full-service law firm soon.  

It is also definitely the undisputed leader in some niche areas of law practice across the country. Most well known for its work in venture capital and M&A, IndusLaw has been now raiding the biggest law firms in town for a market share in practice areas like Capital Markets, considered reserved only for heavyweights.  In areas like Employment Law, it has been slotted into tier 1 for several years now by publications that track such things.

It is the classic story of the underdog emerging the champion. It is very inspiring for all of us involved in the legal industry and entrepreneurship.

So when I got a chance to interview Suneeth Katarki, it was very, very exciting! IndusLaw is proof that you can start a law firm early in your career, and if you play your cards right, you can pull off what most lawyers would consider impossible.

What was the beginning like? What were they thinking? 

It is interesting that Indus was not merely looking to start a full-service law firm, as most ambitious law firm founders did back in the day. They had a clear hypothesis, and it turned out to be scarily accurate! 

Back in 2000, when even the green shoots of startup economy and venture capital were yet to become visible to most of us, Suneeth and others realized that Bangalore was becoming the IT capital, and may become the epicenter of startup investments. Having done some startup focused work at internships in Mumbai and seeing the interest and activity in the same at Dua Associates as an associate, he could see that there was a gap in the market with respect to startups and venture capital investments. They also wanted to build a professional law firm in Bangalore, a concept that was mostly alien in the city at the time.

Most lawyers did not know much about startups and venture capital work and did not do justice to the work. It was not much different in 2008 when I discovered the startup scene in Kolkata. Even as a 4th year law student, I could pursue startups to let me do their investment deals. 

Indus decided to fill that gap, super early, starting in 2000. I would think that it was too early, but starting early helped. When the wave came and became a Tsunami, they had positioned themselves very well. 

The gap was not merely with respect to startups and venture capital though, they discovered that there is a great demand for a professional corporate law firm in many other sectors too.

Most lawyers see a trend too late, and jump into the bandwagon when its already way too crowded. It is better to be the leaders in a small niche market that is yet to pick up, but being the 10th best in a well-established market is not so rewarding.

Indus sensed these trends very early, and that is what they went after. 

How did they find the conviction? Was it not too early for focussing only on such a small niche? Back in 2000, startups barely existed. It was just after the dotcom bust, in fact! Startups were not the most exciting thing to do. People even said that the internet was supposed to be a fad that was going to fade away. 

I did not hear about the first startup events until 2008! 

And even then it was too small, and not too many investments were happening. 

Of course, by 2014 everything will change, and there will be a massive venture capital boom in India. The money will shift from public markets to venture capital and PE, putting firms like Induslaw at the center of maximum action. However, could one imagine that back in 2000?

They did not foresee, of course. They were not even trying to become a big law firm with national presence back in 2000. It was a 4 partner practice, and they wanted to have their own identity. That means getting a few clients was enough. 

Being small and agile helps when you are getting started, you can afford to target small niches that do not make sense for bigger setups. It is a competitive advantage!

Indus grew very organically in the initial years, and it was not until 2008 that they started thinking about growing fast, becoming a multi-city firm and adding lawyers rapidly to the practice.

Still, how did they get the first set of clients?

It was a slow start. All four founders had grown up in Bangalore. Their friends were getting into business - real estate, IT startups, and other things. Personal networks of the founders were critical in the beginning. They also began to target startups, knowing that they could not land the venture capital or private equity funds as clients to begin with.

They went to startup events (I am amazed to know that there were startup events back in 2000 in Bangalore) and counseled startup founders. They gave free talks. Engaging with the startup and early entrepreneurship network led to a string on initial clients who sought help while raising investment. It must have been easy, because I doubt any other law firms were talking startups back then.

In 2012, I took a deal to my partner in a big law firm (I was an A0 associate). It was a series A round worth 2 million. The partner thought it was too small for him to take up. I referred it to a friend who was doing boutique investment deals. That company went on to raise much bigger rounds later, of course. I am just pointing out what big law firms now consider amazing opportunity was totally no-go back then.

The first 8-10 instructions were from startups, and then Indus landed the first instruction from a VC fund. That was really good because a fund will instruct them at least 5-6 times a year! 

When some client companies grew bigger and went on to acquire other companies, they instructed Indus. That’s how the M&A practice took off.

Even working with startups which subsequently failed paid off for them, because the founders went on to work with bigger companies, and hired Indus through their employers when they needed help. 

The network effect kicked in overtime. Things continued to grow organically. I presume that as Bangalore emerged as the startup capital of India, the circle of influence of Indus continued to grow!

The real inflection point came when they decided that it was time to grow big, and go national. 

Teaming up with Delhi based firm G&D, and renaming themselves IndusLaw with the future vision of penetrating all of the important legal markets in India was a game changer for Indus.  

However, this is where a lot of firms screw up. Bad partnerships that rock the boat, and later lead to demoralizing and costly demergers. What did Indus do right?

Firstly, the merger with G&D was not instant. Unlike some firms which grew too fast in too many cities by recruiting partners rapidly, and then crumbled, IndusLaw took it slow. The partners of both firms worked together and collaborated for over one and a half years before actually sealing their fate together. And once they did, there was no looking back.

Keeping partners together have been really hard for a lot of law firms. Only the firms that managed to keep their flock together managed to grow sustainably! Trilegal, for example. Could it have its tri-city dominance in Bangalore, Mumbai, and Delhi if the founding partners fell out? I doubt it. 

Many other similarly placed firms remained locked to one or two areas of good practice and stayed put in one city only, because of their inability to add good partners in other important cities. That’s what kept them at Tier 2 or Tier 3 over decades. 

You cannot aim to become a Tier 1 law firm with only one city presence. Tiny offices that function as back-offices without the real ability to generate significant work in that location do not count. 

That was not what happened at IndusLaw. 

What was the secret to keeping partners from different cities together? How did they keep the founding partners together for almost two decades (one of the founding partners left in 2009)?

IndusLaw was not a single-player game. It was not about a combination of a few superstar partners. It was a team play. That is what stands out most in the IndusLaw story. It was built as a brand. All equity partners had equal shares from the beginning and focussed on investing in the brand of the firm rather than personal glorification. 

Putting the firm before individual partners was a key decision that paid off.

Yes, some founding partners may have brought in more work at times or done more work than others, but that did not mean that they get more equity or more compensation or a higher seat at the table. This was clear from the beginning, and all the founders unequivocally subscribed to it. 

The victory of IndusLaw is, in a way, victory of the pursuit of a common long-term strategic goal rather than personal ego or short term incentives. 

It is hard to find such partners and bring them together, and much of IndusLaw’s success, I would attribute to this factor.

The other thing that Suneeth emphasized on was constant communication amongst partners, especially in the early days. They made sure to meet twice a week like clockwork for a discussion. Even to this day, the founding partners meet physically at least once a month. 

It is not at all surprising that IndusLaw has grown quite fast in Mumbai as well, despite not having any local founding partner. How did that work?

And that is where comes another masterstroke of IndusLaw. 

Unlike most law firms, IndusLaw involved its fee-earning lawyers in management work from the beginning. And it was not just lip service. They set up committees of lawyers who decided critical policy issues - like leave policy, dress code, what would count as work from home, what will be the holidays, how to do training and knowledge management, how the firm’s branding would look and so on.

Taking responsibility for the success of the firm, rather than just personal success, or success of your practice group or team, is in the DNA of IndusLaw. 

The difference in results is quite evident even if you take a look at the firm’s corporate website, which looks more like that of a startup than a law firm.  

As young lawyers got involved in the firm’s management, they also felt more responsible for the firm they were building! They felt a proud ownership. It is truly a unique way amongst Indian law firms to promote loyalty among the fee-earners. 

Note that while many law firms have such committees, often, people in the committee know that their job is to quietly agree with the managing partner or his wife. Else, they need to find out what the managing partner thinks before taking a call. But not in IndusLaw.

And that is perhaps what led to building a culture in IndusLaw that promoted taking responsibility for the firm’s ultimate success.

What kind of culture did they want to build? Did they consciously try to build a certain kind of culture?

Absolutely. The idea was to create a cool and yet intense culture, that would be different from traditional workplaces and help IndusLaw to attract good talent. 

IndusLaw wanted to build a new age law firm without family influences, a workplace that would be casual and open, but focus on the quality of work. It helped that most of their clients initially were startups and VC funds, who themselves promote a similar kind of work culture among their employees. 

I personally, and the millennial lawyers I know, would always prefer to work at an open, transparent, informal workplace rather than stifling and orthodox ones that swear by traditions and old values. 

When I joined Trilegal instead of Luthra, AMSS or some other law firms after law school, this was a reason that played in my mind too. I did not even sit for Khaitan interview at that time, not because I actually knew something about the firm, but simply because I did not know enough about it! Trilegal came across as a more cool law firm than the older ones. This was, of course, by design. Trilegal came and made a presentation on the campus and told us some amazing things that really impressed me. We didn’t understand all of it perhaps, but the coolness was undeniable. 

IndusLaw has the cool flavor too. I think IndusLaw has benefitted tremendously over the years from that DNA and the branding that comes with it. This is also something that is incredibly hard to retain as a law firm scales up and new lawyers and partners and cities and practice areas get added to the mix. 

That brings another question in its wake.

The biggest challenge while scaling a law firm is maintaining quality. How does IndusLaw tackle that issue? Given the major drive for growth in the last few years, that must have been a major headache for the management?

The answer is in training and knowledge management, according to Suneeth. IndusLaw attacks the quality issue with a lot of inhouse training, which are organized frequently. It is a hard problem to solve, but a relentless focus on training has helped a great deal. 

The other strategy for managing quality that has worked has been hiring only Tier 1 partners, and not those Tier 1 partners who left because they were not doing well, or because they wanted more work-life balance. Only the rising stars were hired from Tier 1 firms, and this has been a conscious strategy from day 1.

Also, IndusLaw prefers to hire from its long term internship programs rather than campus recruitment. Although now it is harder to eschew campus recruitment given the hiring volumes required, they still prefer hiring long term interns as far as possible, irrespective of their college of origin, after seeing their work, dedication and fit with the firm culture. 

This, probably, is another major reason for succeeding with quality management. There are a lot of firms who are good and bringing in new clients, but not so good at retaining them over the years. IndusLaw is definitely not one of those, because the entire basis of its long-term success appears to be its ability to retain clients over a very long period.  

And that comes from a powerful vision and very good execution. 

What is ahead for IndusLaw?

It certainly looks like the firm is ready to challenge the hegemony of big full-service law firms. It has been increasing the number of partners and areas of practice. It is definitely on the growth curve. 

It remains to be seen when clients or the legal industry will begin to consider it as a part of the exclusive club of big law in India.

I am looking to interview more successful law firm founders and bring you more stories from which we can learn about the legal industry and the profession. Please connect me with the lawyers that you think I should speak with.