Last month, India's ICICI Bank raised $5 billion in the largest equity offering ever by an Indian company.
That kind of money isn't unusual for a market as healthy as India's -- second only to China in economic growth rate.
"The India market is very strong, and it's across many sectors," said Michael Sturrock, the Latham & Watkins partner representing the underwriters in the ICICI deal. "Especially in India, it's gotten to the point where the market is so robust that we have to turn away a fair amount of work."
The soaring Indian economy is generating tons of work for U.S. firms, from international public offerings to overseas acquisitions. Prevented by law from setting up shop or practicing in India, many coordinate work from Singapore or London or, as one lawyer said, "surreptitiously practice out of hotel rooms."
It's worth the hassle -- global work originating in India is lucrative despite the downward pressures on rates from some Indian clients.
Most lawyers for that international work have hailed from the United Kingdom, with local Indian counsel commissioned for local issues. These days, lawyers say, U.S. firms are ascendant because Indian companies are doing more work now in the United States.
That work ranges from outsourcing deals to the billion-dollar IPOs. High-end securities activity is dominated by New York firms such as Davis Polk & Wardwell; Cleary Gottlieb Steen & Hamilton; and Shearman & Sterling, as well as California's Latham, lawyers say.
Wilson Sonsini Goodrich & Rosati is strong in tech, followed by such Silicon Valley firms as Fenwick & West or Pillsbury Winthrop Shaw Pittman, lawyers say.
"Many of the Valley firms feel they missed the China wave," said Raj Judge, the leader of Wilson Sonsini's India practice, "and they certainly are not inclined to miss the India wave."
FROM BANAL TO BILLIONS
As India's economy has grown, the legal work has evolved from licensing agreements, an occasional joint venture or the opening of a U.S. office to today's billion-dollar offerings, Judge said.
In the late 1990s, Wilson represented Infosys Technologies in the IPO that made it the first Indian company listed on the Nasdaq. That, Judge says, is when an explosion of Indian tech companies hit the United States. The dot-com collapse was a boon for some Indian companies, since struggling U.S. businesses looked to save costs through offshoring.
A few years later, Sand Hill Road's venture capitalists turned their eyes east. Just last year, Sequoia Capital joined forces with Westbridge Capital, India's largest venture capital firm, to launch an India-focused fund.
"As venture money and private equity money has globalized, you go where the money goes," Judge said.
That doesn't mean a generic international strategy will work. Abrar Hussain, a senior counsel at Akin Gump Strauss Hauer & Feld, notes that the red-hot growth in China is largely government-fueled, while India's is driven by external financing such as private equity. It's not a matter of apples-and-oranges differences, Hussain said. It's like "comparing apples to fish."
Firms such as Perkins Coie are doing substantial work in the business process outsourcing, or BPO, sector representing the U.S. companies working with vendors in India -- something partner Shaalu Mehra says is high-margin work that requires no discounting.
As that outsourcing market develops, it's moving in reverse: Indian vendors are looking to acquire U.S. companies. "Now vendors are interested in getting a foothold in the U.S.," Mehra said, "betting they can charge higher rates for U.S. staff."
Several months ago, Indian outsourcing firm HOV Services acquired U.S. provider Lason Inc., in the largest leveraged buyout, using debt as a component for the $150 million transaction.
"The speed at which the Indian markets are becoming more sophisticated is staggering," said Hussain, who worked on the Akin Gump team representing Lason.
But the work isn't just in the tech sector or with large outsourcing companies. Lawyers say work is across the board, from real estate to infrastructure. Last month, Latham and Sterling completed the $1.75 billion initial public offering for Sterlite Industries, an Indian mining company.
EARNING EVERY PENNY
Despite the abundance of work, Indian clients are still tough on U.S. firms' rates, often trying to cap costs, lawyers say.
"Indian issuers are very difficult on fees, so they squeeze investment banks, and the investment banks squeeze their counsel," Latham's Sturrock said. "If you're good at estimating and stay on track -- which is very difficult for Indian deals -- you can get close to your normal rate, but generally, it's not as good as other markets."
In the United States, lawyers sometimes get a premium for a highly successful deal, but in India, the client may still ask for a discount, he added.
Wilson Sonsini has created models for venture financing in India, making transactions more efficient by mimicking the format of prior deals.
"Our billing rate hasn't changed, but the efficiency has increased," Judge said.
On the Indian side, a handful of top-tier indigenous firms brings in rates of $350 to $450 an hour, even though associate salaries are between $1,000 and $2,000 a month, Hussain estimated.
Rates aren't the only difference.
While attorneys play a pivotal role throughout the deal process in the United States, in India, lawyers often come in only when the deal is already negotiated, Hussain said.
Most Indian deal teams are also reluctant to say, "No," he added. "They will say, 'Let's see; let me talk it over,' and it just keeps going," he said.
Indian companies also tend to be more consensus-oriented, wanting everyone on board with a decision, Perkins Coie's Mehra said. Dealing with such differences requires finesse, he added.
"We all have our tricks," he said. "One is having relationships. I am South Asian, so I leverage that to some extent to cut through some of the cultural barriers."
Those tricks will continue to come in handy. Under the WTO arrangements, India must open its legal services market. While no one is quite sure when or how, that move will reshape the field.
In the shorter term, the work is definitely going to continue for the foreseeable future, lawyers say.
"I would expect India to continue, but the question everyone is asking is: How much longer can this market continue going forward?" Latham's Sturrock said. "I've been here eight years, and this is the craziest I've seen it."