Senior Advocate Dr Abhishek Manu Singhvi, Raian Karanjawala, Managing Partner, Karanjawala & Co., and Senior Advocate Rajiv Nayyar speak to Tarun Nangia on the Legally Speaking program aired on NewsX about how litigation has changed in the time of the corona pandemic.
T.N: Sir, we may now discuss the flip side of corona the impact on the business of Law, Litigation and Law Firms. I will read out a small comment which Senior Advocate Harish Salve made recently. I won’t read the whole comment but two lines from the comment which hit very hard was “Never in my Life have I Experienced Clients telling me do you mind cutting your fees. It’s happening for the first time with me. Normally, I would throwa tantrum but now I say for sure I understand. So, has this been an experience for all,including the Law Firms? He also said that people don’t have an appetite for litigation. I may personally not agree because India is a highly litigating society, people still don’t have Mediation at the top of their mind. Is there an attitude change here?
Karanjawala: Let me be frank. I have unfortunately never been in the position of Mr. Harish Salve where never in my life earlier have people not asked me to reduce my fees. It’s something that our Firm has to face on a day to day basis over the years because that’s what a Solicitor’s life is and that’s how Firms are. I mean clients are forever asking you to reduce your fees. I mean it’s almost as if it is part of the in-built vocabulary of clients. We must remember that lawyers by no stretch of imagination are charging less. All of us here on the show who are lawyers are earning way beyond what we ever expected to earn when we began our careers. So, for a client to ask you to reduce your fees, is something at least I don’t find surprising. In fact, years ago our Firm had evolved a different kind of way of tackling the issue namely sometimes what we did was whenever a client had a lot of litigation, we just worked out a monthly retainer system, so we charged him a monthly retainer and did any amount of work that he sent our way in the same. So, for us to have clients asking us to reduce our fees is something we have always dealt with. Has there has been an incrementalamount of asking for reductions? Yes, I think there has and that is because the pandemic more than even economically affecting people has psychologically affected them. I have a lot of friends in the industrial world of India and when you talk to them you suddenly find that generally the talk is all gloom and doom. There were many zoom conferences that I had with people who are leaders of Industry and whilst just chitchatting away the general talk was always talking down the market. General doom and gloom and conversations that went in the direction of oh my god things are going to get much worse. So, in a situation like that when the head of a company feels that he is going to see bad times, the first person he talks to, is his Law officer and says you better bring your budget down. This impact is going to be felt by us because the soft target is always the Firm because we are less likely to argue. Also one has to remember that people like Manu, people like Rajiv, they have a limited amount of time they can spare in a day and there are just so many cases they can do in a day. On a good day running from court to court they could have done it in double figures but the fact still remains that in covid times and also because of the way the whole process of arguing on video is dealt with and because you can’t really flit away from one video screen to another video screen without a judge noticing that there is a gap on a particular screen. Ability of counsel to handle many matters is reduced. Their ability to take numerically the same amount of cases they could take earlier is not the same. Therefore, the top counsels have at least reached in their case a saturation point and frankly they may be getting more cases than they can handle, so their desire to reduce their fees is much less. A Firm frankly never almost never says no to work. I don’t know any firm who says look boss for the next 3 months we are too busy with work don’t come to us with any new case. We have to take whatever comes our way. So, obviously we are much more prone to being bargained with.
Having said that, I have noticed one thing which in the first part of the interview I wanted to allude to, and I think this is the appropriate time to do so. I have noticed (though I am not really able to understand why) I have suddenly found in these times that people are coming to the Firm as clients who never came to the Firm earlier. I won’t take the names of the clients, but they are important clients coming from different avenues to our Firm for the first time. Clients who never looked in our direction have suddenly started looking at us. I kept on asking myself why is this happening? The only answer I can give is that sometimes in moments of stress the law officers of companies prefer to go to what they feel are safer hands. I, therefore, feel that the firms are certainly better circumstanced in these times than the individual lawyer. The individual lawyer I think is having a harder time than we the big firms are. That’s my sense of things.
T.N: That’s a frank admission by Karanjawala where he gave bot0h the flipside and the benefits of litigation in times of corona now the gold is costing highest more which we never paid for gold which is about 51600 rupees but there are corona time and gold is expensive but if we I Dr. Singhvi beat corona or not I have to pay for gold.
Singhvi: I Let us be clear first of all this general point that this perception corona has worked better for elitist is a wrong perception there is perception of virtual hearing elites there is a perception of corona favouring elites I don’t think corona is respectable of no person corona is respected of no status number two general point there is a cut across the board as I said weather you are at the very top or low categories of the very top in quantum number 3 there is cut across the board in the income in your earning all of us are very good earning very high income tax payer but all are income tax return will reflect that there will be a diminution a significant diminution it is not a very small diminution I can very frankly say and I think a lot of people will share their experiences why will not there be if there are 23% contraction in one quarter in the GDP and the projection for 12 months is 10% negative in the GDP I don’t think it’s all surprising to make candidate vision so the whole thing is contracting you are not an inland you can apply securely across sectors same I would imagine for the top doctors, it would be same for engineers, architects. This is a difficult time and people are doing the essentially necessary bearing with minimum that’s the general point need to be understood and I have no hesitation in saying that all lawyers of all kind and obviously you are at the bottom of the heat it hurts you more obviously our safeness is higher so we don’t suffer much. Secondly I think it is important that I don’t think it’s fair to say nobody ever asked for discounts where in normal times the firm always because knowing the Client’s profile knowing the stakes in the case always ask for adjustment that is normal given take the only difference is more done in the firm in the friendly basis in a minor way today that is centrally higher and today many times the client himself in the contract tells Infront of the firm person that look sir what is happening to my industry what is happening and people accommodate so that is other reason for the contraction I think everybody even the officially notified feast of the top of council would have seen a decline settled so I think it’s none of surprising I think we have to realise that the access is now getting opened to new class of person this virtual hearing has another good advantage to some extent disadvantage at minor way mostly an advantage access is changing access through virtual hearing for the far of the Supreme Court I have already said in the last episode it is big thing people can save travel not coming here and participate access is very important part of justice and I think that’s a big virtue of virtual hearing.
T.N: So one point I would like to add I mean getting Dr. Singhvi to fly down to Bombay or Calcutta then to hotel fees, transit, chartered Aircraft at least the client saves in all of that?
Singhvi: let’s be very straight the client says Sir that forget the hotel forget the aircraft the client simple argument is that you are not going outstation at all when you talk of the three day and I have physically done the three in one may be outstation fees the outstation fee, is redefined for everyone there is no outstation fees in old since you are doing slightly higher version of the in-station fees on the basis when you are reaching out for electronics that’s about it and I think client is far smarter then all of us put together if a client spends 100rs when he finds at the benefit to be rs1000 or at least 10000. He is not a fool.
T.N: One good thing about Dr. Singhvi is his front admission he is very candid when he speaks which is one quality which I always like about him and which is my viewers also appreciate when they see his show so I want to go to Mr. Nayyar sir I want to know from you you when somebody goes to Mr. Nayyar he has in his mind that he is getting the top council that he can get in Delhi High Court and how has the Delhi High Court practised taken litigation in times of corona discounting prevalent or area client cashflows are affecting is that effecting the Delhi High Court?
Nayyar : Tarun I want to actually disagree a bit with both Abhishek and Rayan in the sincethat asking for more of fees by client is not only a corona effect this is being going on for times in memorial because in Delhi High Court for the instance when by the time you have unlikely the Supreme Court practise of special leave petition which is over in one or two in Delhi High Court of course in every High Court cases are on t rolling basis by the time client realises instead of one or two appearances he have rejected he is down towards five so when he hasn’t paid for five hearings then he will come to you and say would it not be possible to just charge for four you know on that particular days just went on for five minutes so the industry or the MNC’s etc who are not unknown that they have been asking for deduction in the past but now also we have had great battle even in the pre corona to get our fees I mean you know there are huge outstanding I know Abhishek is far more meticulous in stating his case outstanding or our worse than that but I find that even in pre corona you would have huge outstanding but know you could chase people but now you feel guilty in chasing people for money that there is one impact of corona because you know you can’t chase people with same frequency as you could have chased in the past and I have had huge bed debt I am sure Abhishek must have heared and if a client case is over then how do you get him then the law firm will also hold it and have been said sorry the client has also left me also so how much you can chase and for how long will you chase.
Karanjawala : Chasing clients to pay their dues is a very genuine problem that law firms have always had because frankly it’s no secret that a sought after top counsel charges seven 7 to 10 times what the law firm may charge, so very often, when we have briefed a top counselon three or four occasions and earned only about 10% of their fees, we find it very difficult to make ourselves liable to pay counsel’s fees, in case, the client does not do so. I was therefore very happy when several of the top senior counsels started insisting on being paid in advance unless the client was a well-known one. This greatly reduced my own responsibility.
Nayyar : Now you can’t ask fees in advance you will be lucky to get your fees after it I mean you have to have number of appearances but the other expect is in the Dekhi High Court I mean for the instance I mean I am finding in the past you could have had lots of repeatable apperances in the sence of 5 minute appearance, 2 minute appearance now the client is only using you in the effective appearences so obviously the number has also come because he is getting cost concious.
T.N: I would concur with Mr. Nayyar because one of the my somebody was known to me he suggested a council who was not there fairly up but went to do council and the client said I want an in- house arguing counsel he would have never in normal course time never ingaged in the in- house council of that Laew firm it was very supprising to me that I could hear such a thing but it was somebody mentioned it to me recently.
Singhvi: let’s Consciousness and awareness has become much more now forget the client even when an advocate engage us there is the 5 minutes spent in the begging what is the fees could it be this much I would revert to you will take some time because he has to meticulously check and even a few lakh rupees is very major issue it might sound marginal in the pre corona time it is a very major issue that is the consciousness and awareness had which people have because of the doubter of everybody’s economic time I am not taking about the bugbear barriers it is a nightmare for many of the council so I hate to talk about to our airerssheet is just a kind of a nightmare reminding sheet which many of us forget everytime from category 1 and category two it goes into bad debts and those are jigantlyb trouble some figure but you must clipped with it.
Nayyar : Now just to add Tarun you are saying the impact just the Abhishek said we have asafety mess that’s good but I am myself estimating that my own revenue this year would be down to my 2011 figure that’s the kind of impact so you know if this impact the Abhishek is saying I am also having I am sure Rayan must be having impact then by the time percolates right down obviously everybody will have a hit.
(*transcribed by Pranshi Agarwal)