The head of a trail-blazing City law firm found that aiming high works
Sarosh Zaiwalla has represented some of the most powerful people in the world, from members of the Gandhi family to the Tchenguiz brothers. He famously hired – and then let go – Tony Blair when the former Prime Minister was a jobbing barrister.
As the first non-white lawyer to start a practice in the City, his business story is one of tenacity, courage and a keen eye for a business opportunity.
When Zaiwalla came to the UK from India, he was following in the footsteps of his father. Ratanshaw Zaiwalla was the first Asian person to qualify as a lawyer in the UK, in 1925. “The difference is that he went back to India and I decided to stay,” said Zaiwalla.
Zaiwalla trained at the maritime law company, Stocken & Co, in Fleet Street and soon realised that he had a talent for commercial law. But aptitude did not guarantee success. “It was very difficult back then for an Asian solicitor to find a job in the City,” he explained.
The late Cedric Barclay, the renowned maritime arbitrator who was Zaiwalla’s mentor in the early days, told him not to join a big firm but to strike out on his own.
Zaiwalla recalled his advice: “He told me, ‘You’re good. One of the big firms will take you and a senior partner will take you for lunch at the end of your first year and say, good job, old boy. Every year, he’ll take you for that lunch and say the same thing and after 10 years you’ll still be in the same position’.”
In 1978, one week after qualifying, the ambitious young lawyer set up his own practice, Zaiwalla & Co. “All the other Asian lawyers were in Wembley or Southall and dealt with immigration or debt collection or divorce,” he said. “But I didn’t want to do those things. I found a single-room office in Chancery Lane and set up my practice.”
Zaiwalla had spotted a gap in the market for a City law firm that was outside “the old boys’ club”, and was prepared to undercut the competition. “I stood out among all the bowler hats,” he said.
He quickly built up a reputation as a first-rate solicitor, specialising in difficult cases and litigation. He was an instant hit among wealthy foreigners, wary of the closed Oxbridge communities that dominated the City.
His first clients were the Indian billionaires, the Hinduja brothers. Zaiwalla had met them at a party and hit it off. “I helped them start their bank in Geneva,” he said.
Today, more than 90pc of Zaiwalla & Co’s clients are from outside the UK. “We are a true export business,” he said.
But despite his success, it took many years before his peers accepted him. “The pathfinders don’t have the path paved,” he said. “But the people after us will run.”
Now, more than 32 years later, Zaiwalla is still in Chancery Lane. His £3m-turnover firm now employs 18 lawyers, and is about to go on a significant global expansion drive, opening offices in Dubai and Kazakhstan, and launching franchises all over the world.
“We reached a crossroads and had to take the next step,” he explained. “In Kazakhstan, the sovereign government has asked me to open an office.”
By injecting some competition, the Kazakhstan government is trying to improve the quality – and drive down the cost – of legal services. “The big firms charge huge fees and hold the monopoly there. My company is unique in that we are the only small law firm to punch above its weight. All our opponents are usually from the top 10 Magic Circle firms.”
Zaiwalla & Co has maintained its position over the years by sticking to its founder’s original business model: to focus on tough cases and undercut the larger companies. “Magic Circle firms put on a great show and they have high overheads, which they have to pass on to the client. So where they charge the client £1,000 an hour, I charge £500 an hour,” he said.
Zaiwalla has serious clout in the legal industry. His company made the headlines late last year when it represented the Bank of Mellat. The Iranian bank had been caught up in the sanctions battle between the West and Iran. Its assets had been frozen and the organisation was haemorrhaging cash.
Zaiwalla was asked to show that the UK sanctions were an indiscriminate attack on people living under unpopular regimes. “My firm argued that the Treasury had no evidence to suggest the bank had somehow helped Iran’s nuclear programme,” he explained. The Treasury made a last-ditch attempt to win the day by claiming that it had evidence against the bank, but that it had been obtained by secret intelligence and could not be shared for reasons of national security. Lord Neuberger, president of the Supreme Court, called the first “secret court” hearing in Britain so that the claims could be heard.
Zaiwalla sued the Government and won. He claimed it as a victory not only for his firm, but also for the UK’s justice system.
“It is not surprising that British justice is respected everywhere,” he said. “Can you think of any other country in the world where the supreme court will rule against its own government in favour of a foreign party belonging to an inimical, hostile country? That doesn’t happen anywhere else.”
The landmark win will help guarantee Zaiwalla’s firm a stream of work for many years. However, most of his time is now spent as an arbitrator. “That takes up about 40pc of my time now. It is much lighter than being a lawyer because you are the boss of your own tribunal,” he said. The legal system has come a long way in the three decades that Zaiwalla has been practising. But even as some issues are resolved, others materialise.
“Law is becoming the monopoly of the giants,” he said. “The legal service has now become very expensive. It takes a lot of money to get justice.”
Zaiwalla believes that law firms will be forced to split into smaller entities, and that new, disruptive firms will be created. “It’s a natural cycle,” he said. “The industry must evolve.”