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

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!

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.

Finally, some movement on the Limited Liability Partnership Bill

As reported across several papers, Shri Prem Chand Gupta, Minister of Corporate Affairs, in the government on Tuesday introduced the revised Limited Liability Partnership Bill, 2008 in the Rajya Sabha. The Bill provides for the formation and regulation of limited liability partnerships and for matters connected therewith or incidental thereto.

With the imminent opening up of the accounting and legal and other professional services sectors this Bill will play an important role in creating a level playing field for the professionals of India. The Institute of Chartered Accountants of India, has already made the necessary amendments allowing its members to partner with members of other professions. The other professional bodies are also making similar amendments to facilitate the process. This will help in creating larger multi-disciplinary firms which can service clients across domains.

Limited Liability Partnership (LLP) as proposed in the Bill, 2008 is a new corporate form that enables professional expertise and entrepreneurial initiative to combine, organize and operate in an innovative and efficient manner. In India, this need has long been recognised for businesses which may require a framework that provides flexibility suited to requirements of service, knowledge and technology based enterprises.

Services sector is playing a major role in the national economy and there is a growing diversity in the range of services being offered. The services sector would also find this form very useful. The advantage of the LLP form would be that it will not impose detailed legal and procedural requirements intended for large widely held companies on such enterprises. In this way it will also be useful for small enterprises.

The need for LLP legislation has been recognized for a very long time. Various committees and Expert Groups have, from time to time, recommended introduction of LLP legislation in India.  In the last decade itself, Abid Hussain Committee (1997) had recommended this legislation in the context of SSIs. The Naresh Chandra Committee on Regulation of Private Companies and Partnerships (2003) and Dr. Irani Committee on New Company Law (2005) had also made recommendations for a separate  LLP Legislation.

However, it is the recent initiative of the Ministry of Corporate Affairs that has enabled this legislation to be finalized and tabled in the Parliament.

Government had earlier introduced the Limited Liability Partnership Bill, 2006 in the Rajya Sabha on 15^th December, 2006. It was later referred to the Department Related Parliamentary Standing Committee on Finance for examination and report. The Committee submitted its recommendations in its report to both Houses of Parliament on 27^th November, 2007. The present Bill, 2008 has taken in view the recommendations made by the Standing Committee and other relevant inputs.

The salient features of the LLP Bill, 2008 are as follows:

(i)         The LLP will be an alternative corporate business vehicle that would give the benefits of limited liability but would allow its members the flexibility of organizing their internal structure as a partnership based on an agreement.

(ii) The Bill does not restrict the benefit of LLP structure to certain classes of professionals only and would be available for use by any enterprise which fulfills the requirements of the Act.

(iii) While the LLP will be a separate legal entity, liable to the full extent of its assets, the liability of the partners would be limited to their agreed contribution in the LLP. Further, no partner would be liable on account of the independent or un-authorized actions of other partners, thus allowing individual partners to be shielded from joint liability created by another partner’s wrongful business decisions or misconduct.

(iv)        LLP shall be a body corporate and a legal entity separate from its partners. It will have perpetual succession. Indian Partnership Act, 1932 shall not be applicable to LLPs. Since LLP shall be in the form of a body corporate, it is also proposed that the relevant provisions of the Companies Act, 1956 may be made applicable to LLPs at any time in the future by Notification by Central Government, with such changes or modifications as appropriate.

(v) An LLP shall be under obligation to maintain annual accounts reflecting true and fair view of its state of affairs. Since tax matters of all entities in India are addressed in the Income Tax Act, 1961, the taxation of LLPs shall be addressed in that Act.

(vi) Provisions have been made in the Bill for corporate actions like mergers, amalgamations etc.

(vii)       While enabling provisions in respect of winding up and dissolutions of LLPs have been made in the Bill, detailed provisions in this regard would be provided by way of rules under the Act.

Prior to introducing the LLP Bill, 2008, Shri Prem Chand Gupta withdrew the earlier Limited Liability Partnership Bill, 2006.

Are global layoffs likely to benefit techies in India

As I have pointed out in my earlier post, Offshoring is good for America, and even Jack Welch has stated that Outsourcing Is Forever - Jack & Suzy Welch, thus this story, in the Econimic Times, which has a slightly different take, is worth a look. In the end, I Think,  it will come down to how effectively the Indian side handles the PR wrt this issue.

Global pink slips in the tech industry may end up benefiting India. As big-wigs like Intel, Sony, CA, IBM and Sun Microsystems announce the return of retrenchment, Indian HR honchos foresee a spurt in demand for low-cost, high-skilled destinations like India in the near future.
The chip-maker-in-distress, Intel, on Wednesday announced that it will reduce its global work-force by 10,500 by mid-07. But this is unlikely to have a huge impact on its India operations, which incidentally, is its largest development centre outside the US. The company refused to put any India numbers on the table, but indications are that investment commitments of over a billion dollars will stay, so the local layoffs may not be high. However, indications are that there could be a cap on hiring.

Indeed, with cost-cutting a major priority, Intel may outsource more to India, say market sources. “India could stand to gain from these global layoffs. Due to talent availability at cheaper costs in the Asia Pacific, Central America and East European regions, business processes are being restructured and shifted to these locations," says Pradeep Udhas, KPMG executive director and CEO, KPMG Resource Centre.

For instance, IBM, which announced axing of 13,000 jobs in Europe and the US, followed it up with plans to treble its investments in India over the next three years by pumping in $6bn towards its operations here.

Rakesh Malik, practice leader-global sourcing (India), Hewitt Associates, said: “With global competition fuelling restructuring efforts to attain greater efficiencies at low costs, firms are exploring different geographies outside the US.” A talent crunch in some markets further triggers the search for newer alternatives, he added.

Terming layoffs announced by Intel as a ‘correction’, Nasscom president Kiran Karnik said: “The industry goes through a business cycle. It is a temporary phase where the company is attempting to strike a balance between manpower and demand. As the business moves towards an upcycle, I am sure they will add people.”

Experts, however, point out that India Inc, through industry associations like Nasscom, needs to intensify efforts to manage its PR globally in order to deal effectively with the sensitive issue of job losses in countries such as the US.

“Networking & Capacity Building”

Vinay Talwar’s Beat

A couple of days ago I attended a Seminar organised by the Institute Of Chartered Accountants of India on “Networking & Capacity Building”. I had more gone there for the heck of it and to also see what the CA community is doing wrt ‘Networking’.

I must say that I was pleasantly surprised to find around 400 attendees for a topic that I thought was alien to this staid profession. One of the speakers turned out to be an old friend of mine, Vinod Jain, who has been very active in the affairs of the Institute and has played an active role in the Regional Council as well as the Central Council. Vinod made a very powerful presentation on the various aspects of Networking & Capacity Building and most of all on the “need” for the same. I feel the most important take away for me, and for most of the participants that I spoke to, was for us to get out of the thought process of the past ( ekla chalo re ) and the urgency to adopt this collaborative approach for ‘survival’ let alone growth. Vinod’s story telling style, he gave an excellent example from Mahabharat, aptly got the message home to the participants.

Amal Ganguly, who retired as the head of PwC in 2003 was the Guest of Honour and he did a good job of answering the doubts and queries of the participating CAs. His clear message wrt partnerships and their longterm survival was – forget this ‘goodwill’ business and the only claim that an exiting partner should have should be to his/ her share of ‘Capital’ and nothing else, only then will partnerships thrive and survive !

Roy, Dy Secretary of the Institute, took the participants through the various provisions of the Guidelines framed by the Institute wrt Networking as well Mergers & Demergers between its members.

Having been in business for most of my active working life, for once, I came away with the impression that the Institute of Chartered Accountants is taking a proactive interest in furthering the cause of their members by helping them keep pace with the times. With the GATS discussions rapidly moving forward this topic has assumed much greater importance. I am sure there are a number of issues that still need to be thrashed out, both legal and cultural, but as it is said – a job well begun is half done.