The law firm’s business model is unique, and to some it would seem to limit the firm’s chances of corporate success. By Shariah law, it cannot invest in funds linked to – or that bear – interest. It also maintains a Shariah board of scholars who provide rulings on the firm’s constitution, structure, deals and transactions, not unlike a corporate board, but un-secular.
Where most other firms are locked in decades-long competition around league table rankings to judge the number of deals closed, the Shariah-compliant firm may not be as competitive as its international counterparts. Agha’s firm cannot welcome every potential client; it must turn away those from certain businesses – including ‘conventional’ international banks, insurance companies, and clients linked to gambling and alcohol, and others from Islamically impermissible areas.
“We’ve had to turn away a fair degree of business that is by mandate, proscribed for us,” Agha said. “It’s a significant carve out, and the kind of work and clients we can work with are limited. That hasn’t been an easy decision because in this market it’s obviously helpful not to have to turn work away.”
Conventional work and clients are largely behind the success of the world’s biggest law firms. Global law firms are arguably dependant on these clients to survive. So can a new-model law firm thrive on its principles? The managing partner of Malaysian firm, Azmi & Associates, said that although Agha & Shamsi may have carved out a large portion of high-value work, there is enough business and global clientele to sustain it.
“The pool of clients might be limited, but on the other hand in a globalised world the market is huge. There should be plenty of opportunities for a Shariah-compliant law firm in crossborder transactions,” said Azmi Mohd Ali. “If a Shariah-compliant law firm has skill-sets needed by clients, then those firms will remain sought-after within those bounds.”
Agha & Shamsi’s clientele includes members of the royal family, Islamic mortgage financing companies, highnet- worth individuals, and of course, Islamic banks and entities. If client feedback is any marker, it seems the firm’s ‘niche’ status has been welcomed.
“The reaction from clients has been very favourable. They are generally pleased and intrigued by the concept of a Shariah-compliant law firm and have a very positive view of the firm’s ethical mandate,” Agha said. “We’ve had considered growth at our firm.”
Whether the rest of the legal industry follow in Agha’s pioneering footsteps remains to be seen. Azmi & Associates for one, welcomes the move, but did not say whether it would consider something similar. “We congratulate Agha & Shamsi on the achievement of their new business model, and look forward to working with them on cross-border deals between Malaysia and the Middle East,” said its managing partner.