Big believer in Growth

I'm a big believer in growth. Life is not about achievement, it's about learning and growth, and developing qualities like compassion, patience, perseverance, love, and joy, and so forth. And so if that is the case, then I think our goals should include something which stretches us.

As you begin to take action toward the fulfillment of your goals and dreams, you must realize that not every action will be perfect. Not every action will produce the desired result. Not every action will work. Making mistakes, getting it almost right, and experimenting to see what happens are all part of the process of eventually getting it right.

Jack Canfield

Budgeting and the arrogance of bureaucracy after 2,063 years?

 

“The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance.”

— Cicero, 55 BC

Bernard Madoff, former Nasdaq Chairman...Ponzi King!

Wow, this takes the cake. The man even went on to become the Chairman of Nasdaq under the very nose of the great SEC. We have still to get over the shock of the sub-prime crisis, the downfall of numerous organisations that had overleveraged themselves and now we have another situation resulting from the lack of oversight on behalf of the regulator. I am not sure who out of the Big Four is the Auditor of the US $ 50 billion empire of Mr Madoff but I am sure the Auditor too will have a lot to explain. Not to mention the rating agencies that must have been part of the big scheme spun by the spin doctors at his companies. What to say of the due diligence process carried out by the great investment bankers using their best practices for recommending investment  in these schemes!

A number of red flags were raised, and some newspapers even carried stories on the credibility of growth story spun by Mr Madoff, however, nothing came of it and now we are faced with another big scandal.

Helpless India looks on…… and waits for the Home minister’s usual spiel!

Its more of anger and frustration that pushes me to write this post. I am sure that a major part of the country is today looking on with helplessness as we see the terrorist attacks in Mumbai unfold and the death toll goes to 87 with another 185 plus injured.

We will again have our Home Minister come out and give us his usual spiel on how he will let us know as soon as he finds out more about the attacks (as he was sleeping throughout the night and could not be briefed on the same). We will also have the usual noises from the rest of the polity. However, as this time the attacks are on the elite hotels and foreigners staying therein, maybe, there will be greater pressure on the government to come out of its slumber and act!

Tourism advisories are sure to come out from most countries abroad which will effect the tourism industry. In any case what locus standi does India have to call off the cricket tour to Pakistan when its own Financial Capital is under attack!

Slowdown....lets jump the competition!

What I have said many a time, and strongly believe in, tough times are the best times to jump the competition and rapidly expand your marketshare. This the time when your marketing dollar (or rupee) gets you a getter bang for the buck as everybosy else goes into a huddle. Some interesting surveys have been done and reported here in this article.

Crisis, a word when written in the chinese alphabet, represents both Danger and Opportunity.

Darrell Rigby, head of Bain's global retail practice and Steve Ellis, Bain's worldwide managing director, said: "The tumultuous events of the past few weeks have battered financial markets and created uncertainty that companies will be reckoning with for months. But in the turbulence lies opportunity.

"Like dangerous curves on a racetrack, economic downturns create more opportunities for companies to move from the middle of the pack into leadership positions than any other time in business.

"Unlike straightaways, where leaders can thrive on raw power alone, steep curves require strategic finesse. That often results in dramatic differences in performance as leaders steer out of the curve."

Another characteristic of companies that do well from a downturn, say the two Bain executives, is: "They make bargain acquisitions to build up their core, even when it means taking calculated financial risks. As markets improve, they are well-positioned to accelerate." The latest example: Bank of America's planned acquisition of Merrill Lynch, which may turn out to be "the strategic opportunity of a lifetime," says Ken Lewis, Bank of America's CEO.

So are we all ready to take the plunge!

Work/life balance....control and impact

“What we’ve learned over the years is work/life balance has to be defined at the individual level. It means different things to different people at different times in their lives. What is universally true is the importance of two key factors—control and impact. If our teams are working in an environment where they have an appropriate level of control over their schedule and their work is clearly having measurable impact, they can achieve their definition of work/life balance.” Steve Ellis, Managing Director, Bain & Company

Coming from a leader whose company has been consistently ranked in the top 10 of the best “places to work” in (Consulting Magazine), it is indeed very relevant and insightful. After having put in more than 27 years, post qualification, and seen different businesses from different angles and perspectives over the years I truly relate to his thought of work/ life balance meaning different things to different people at different times in their lives.

Without taking away anything from the concept of ‘control’ – all of us like to have some control over what we do, how we do it and when we do it, however, I also believe that a person will be ready to cede control to some extent in case he/ she is able to get the satisfaction of seeing the positive impact of the work being done by him/ her, whether at work or in personal life, and be appreciated for it.

India’s Corporate lawyers court riches

Well, I guess my last post on the topic of CAs and lawyers having a good time despite a slowdown in the economy and some job losses across the board today got support from an article in the FT which goes on to say -

While the world economy sags, India’s lawyers are enjoying a boom. Lead partners at the country’s commercial law firms are now earning over $1m a year.

“Corporate [lawyer] salaries have ex ploded. They are going up by 20 to 40 per cent,” says Anand Prasad, a partner at Trilegal, a law firm with offices in Delhi, Mumbai and Bangalore.

With rates for domestic corporate lawyers averaging $400 an hour, even junior corporate partners at top firms earn surprising sums – sometimes up to $250,000 before bonus es. Desai & Diwanji, for example, a firm with offices in Mumbai and Delhi, increased its staff remuneration this year by 200 per cent.

While liberalisation of the Indian economy began only in 1991 – making the modern practice of corporate law in India just 15 years old – the profession is already reaping huge benefits from a period of economic growth that will be slowed, but is unlikely to be halted, by the global downturn.

The shift has some painful ramifications, both for foreign law firms prevented from sharing in the bonanza locally by protectionist regulation and large corporations that are unable to use a single international law firm for all their work.

Global law firms such as Clifford Chance see India as ripe with possibility and the “missing link” in their worldwide coverage. There are clear advantages for the UK’s leading firms: India’s legal code has roots in British law, its language of business is English and its economy has been growing by 8 per cent for the past three years.

Yet for now they are shut out. Strict Bar rules prevent large international law firms opening offices or practising Indian or foreign law in the country.

As well as raising the costs of Indian legal services for incoming multinationals, this creates other problems. Lesley Jackson, chief financial officer at United Breweries in Bangalore, says she must work with foreign law firms out of hotel rooms, shuttling back and forth to sign documents in Singapore, and having two law firms (one Indian and one foreign) on every deal. “It makes it difficult not to be able to instruct legal one-stop shops, especially on global deals where it is important to have a brand name,” she says.

Indian corporate lawyers with the right skills to serve such clients are also thin on the ground. Bharat Vasani, general counsel at Tata Group, says: “Outsiders can be deceived by the overall size of Indian law firms. There are actually very few partners capable of doing top level corporate work.”

The profession faces a struggle to service India’s growing corporate sector and foreign investors. According to India Today magazine, the country requires 3,000 new corporate lawyers a year to keep pace with demand. Multinationals such as IBM and Hewlett- Packard and Indian corporations such as Infosys and Reliance have responded by expanding their in-house legal departments. Promod Rao, general counsel of ICICI Bank, says: “Our referrals to domestic firms are few. We even parachute our own guys in to do due diligence work.”

For foreign law firms that need to serve their global clients in India, the Indian Bar restrictions create tortuous logistical challenges. Ashurst, a UK law firm, has a liaison office in Delhi but the firm’s visiting partners say they are careful not to meet clients or give legal advice at these premises, which are more akin to a personal apartment than a law firm office.

Sandeep Katwala, Linklaters’ India head, spends a lot of time working out of his “house hotel”, the Oberoi in Mumbai. Various other hotel suites double up as offices, not only for lawyers but for other professional firms such as Morgan Stanley and Nomura.

Linklaters is one of the most active law firms in India and has advised underwriters on some of India’s largest public listings, such as Cairn India’s IPO and that of DLF, India’s largest real estate company. Last year it formed a referral relationship with a recently established Mumbai law firm, Talwar Thakore & Associates.

Although independent, the firms refer work to each other, share training and run secondments. Kunal Thakore, whose father Shobhan is one of TTA’s named partners, is a partner in Linklaters’ Hong Kong office. Mr Katwala says: “We probably still work as much with other Indian law firms [as with TTA]. But on the Vodafone-Essar transaction, for example, working with TTA allowed us to offer the client an integrated team approach.”

To ensure they gain access to leading domestic lawyers, multinationals and foreign law firms have similar relationships with Indian law firms, such as Amarchand & Mangaldas and AZB & Partners. However, nearly everyone wants to instruct the top partners at these firms, so availability of talent is a problem. For example, during the demerger in 2005 of Reliance Industries, one of the country’s biggest conglomerates, Amarchand & Mangaldas acted for each of the Ambani brothers and their mother.

This type of arrangement would unsettle most western lawyers. “Conflicts in India are scary,” says Mukesh Bhavani, general counsel at Essar Group, the Indian conglomerate. He feels that although the Indian legal market is maturing, it still has some way to go before lawyers can claim to have put proper Chinese walls in place.

Foreign firms, meanwhile, are beating legal restrictions by developing India practices outside the country – and picking off the brightest graduates to staff them. Rajesh Begur, managing partner at ARA Law, a Mumbai-based firm, says he is already feeling the pinch of foreign competition in graduate recruitment. “I went to Jodphur just after [UK law firm] Herbert Smith had been there and I could not recruit one law student.”

The inroads made by foreign firms, however, can spark passionate opposition. Lalit Bhasin, head of the Society for Indian Lawyers, says: “UK Magic Circle firms want to emasculate the Indian legal profession in what amounts to a hostile takeover.”

Such sentiments contributed to the Indian Bar Council’s rejection of liberalisation proposals in November 2007. Firms believe it will be anything from three to five years before India opens up its legal market. For now, international law firms must look on with envy as the country’s local lawyers enjoy the rewards of exclusivity.

Copyright The Financial Times Limited 2008

4 Secrets of the Successfully Self-Employed

Sometimes one comes across an article which immediately strikes a cord as it is on a topic which is being discussed somewhere in your life at that very moment – at work or at home with the family.

One such short note is by Marc and Angel and, I think, it is most relevant for all the young professionals who are now setting up practices in their professionals fields. Once this concept of Time and Money is clear to them then at least they will be in a position to set goals which would help them plan their life. Enjoy.

#1 – We Only Have 2 Products: Time and Knowledge

No matter how you make a living or who you think you work for, you only work for one person, yourself.  Likewise, you only have 2 products to sell, your time and your knowledge.  Here are a few example scenarios:

• Migrant Farmer – Sells hours of his/her life to pick fruit or vegetables for a farmer in exchange for money.  A perfect example of trading hours for dollars.
• Doctor – Sells hours of his/her life to perform medical treatments based on the knowledge stored in his/her brain.  A perfect example of trading hours and knowledge for dollars.
• Best-Selling Author – Spends time crafting a book based on his/her knowledge or intellectual capacity and then sells the book (knowledge) many times over.  A perfect example of trading knowledge for dollars.  The key benefit here is residual, passive income.

In almost all cases of the self-employed, the small business owner is taking information out of his or her brain and spending the necessary time to convert it into a product of value.  This concept confuses some people, and to others it seems obvious.  The bottom line is that customers pay you for your time and knowledge.  Success is achieved by properly crafting the two into one convenient bundle that can be sold many times over (think of products vs. services).

What knowledge do you have in your brain that provides value to others?  How can you extract this information and sell it?

#2 – The Implementation of Knowledge is Power

Knowledge alone is not power!  The implementation of knowledge is power.  Knowledge is simply a commodity; it’s a product like any other that has the potential to be sold.  How knowledge is organized, packaged, presented, shared, and received by others is what makes knowledge so powerful.

Knowledge is useless unless it’s effectively shared with others.  Your ability to educate others in a way that allows them to effectively apply the instruction is what makes knowledge an asset… something worth buying.

#3 – Time is More Valuable than Money

One of the most important points to understand is the fact that there are two basic forms of currency, money and time.  Of the two, time is the most valuable, for it cannot be replenished.  A surplus of time, and the unfettered liberty to do with it as you choose, is the true measure of success.

Your time must be extracted from the formula of making money.  No matter how skilled you are at transferring your knowledge to others, if you are paid on an hours for dollars basis, your ability to expand your business will eventually plateau.  You will run out of time.

The successfully self-employed have made this realization and concentrate the majority of their time and effort on the single greatest secret of self-employment: generating passive income.  Passive income is achieved by applying what you know into a package that can be designed and built once, and then repeatedly sold over and over again.  Finding a unique way to promote and sell this knowlege is the key.

Passive Income Examples: Useful books and guides, time saving computer applications, etc.

#4 – Success is About Knowing What You Want

Self-employed success is not the byproduct of working your way up from the ground up.  It’s based on knowing what you want, understanding your abilities and implementing them diligently to achieve your goals.  There are plenty of people who get laid-off from their 9 to 5 day job and end up making millions in a few short years of self-employment.

Take a look at some of the success stories around you that emerged from nowhere.  These success stories were not initiated by people paying their dues to someone else’s initiatives.  These success stories revolve strictly around perception and choice.  The people in these stories know their capabilities, what they’re doing, and what they want.  Once people make this realization, and the conscious choice to act on it, the possibilities for success are limitless.
Photo by: TeeJe

Job loss? Not for Chartered Accountants and Lawyers

With the economy slowing down there is a definite fear amongst professionals of various categories of either loosing their jobs or facing a cut in their salaries. However, there is one category of professionals who continue to be in high demand and that is my tribe of warriors, namely Chartered Accountants. Despite the slowdown the world still has to compile its accounts (which are on increasingly complex IT systems) and get them audited and that is where the CA scores over a number of other professions in a slowdown.

Further, with the regulatory environment becoming stricter and more complex by the day there is a distinct need for more professionals with hands on experience of ERP systems, taxation, auditing and now with IFRS implementation looming on the horizon – persons with knowledge of IFRS.

Similarly, lawyers too are in a good position as with increased regulatory control and, businesses increasingly facing problems due to the tight money market conditions, legal issues are cropping up everyday which are generating more work for the profession. Increased amount of legal work being generated in the developed economies, due to the mortgage crisis, is also a good sign for the LPO (legal process outsourcing) Industry.

SEBI Takeover Code - creeping acquisition norms eased for persons holding 55% and above but below 75%

In a bid to help the market sentiment SEBI has eased the creeping acquisition norms so as to allow promoters to increase their holding beyond 55%, upto 75%, through creeping acquisition of upto 5% per annum. The earlier limit of 5% per annum still remains and only promoters who are currently holding more than 50% would benefit in the near term as they are the ones who will be able to increase their holding beyond 55% immediately, the others who are currently holding say, 40% or so will take at least 3 years to go beyond the 55% mark and as such their share prices, at this juncture, do not get any support because of this move.

It may be noted that Sebi has mandated that such acquisitions could be done only though open market operations and not via bulk, block deal, or through preferential offer.

Further, till now, for any increase in the holding of promoters pursuant to buy back, exemption under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations was required to be sought. SEBI has now decided to automatically exempt increase/consolidation up to 5 per cent per annum as a result of buy back by a company.

I am not sure how much of an effect this is going to have in the current tight liquidity scenario as, although the promoters have a great opportunity to increase their shareholding beyond 55%, but do they have the hard cash to do so, is the moot question.