Rebuilding corporate India

Law firms retool as their clients restructure and refinance their operations. Alfred Romann reports

Some India-focused lawyers are twiddling their thumbs these days. It’s a far cry from the same time last year, when they were in demand like never before.

Cash-strapped and shell-shocked by the financial crisis, their corporate clients are exercising extreme caution before engaging in any deal-making. When they do invest, they are demanding higher returns and greater financial guarantees.

“You see a lot of contemplation but little fruition,” says Abhijit Joshi, a partner at AZB & Partners in Mumbai. “People want to acquire but confidence is low.”

As one might expect, the legal discipline that is bucking the trend is that of restructuring and refinancing. “We have seen significant growth in the restructuring and refinancing areas,” says Anand Pathak, managing partner of P&A Law Offices. “Bank refinancing has become essential because of a decline in sources of funding to mitigate the financial pain of companies in the downturn.”

Not surprisingly, Indian and international law firms have been fast to retool in order to grab a slice of the action. Amarchand Mangaldas, Allen & Overy, AZB & Partners, Clifford Chance, J Sagar Associates, Khaitan & Co, Linklaters, Luthra & Luthra, Norton Rose, O’Melveny & Myers, Sidley Austin and White & Case are just a few of the major firms that are recommended by clients for their excellence in this highly demanding field of practice.

Growth industry

The shuffling of money and assets, the sudden need to extend payment periods or alter terms and the credit crunch in general have created “an unprecedented spurt in [restructuring and refinancing], and also in disputes,” say lawyers at Juris Corp, a finance-related boutique firm in Mumbai. The firm’s existing restructuring practice has been bolstered by the reallocation of staff from areas of law left languishing by the crisis, and by the addition of new recruits.