From The Summit Chair’s Desk
It gives me immense pleasure to connect with each of you in this noble legal profession, which in my view is very valuable to share the insights and processes that contour in-house legal counsel. And The Grand Masters 2018 Summit Series – A Corporate Counsel Legal Best Practices Summit Series happens to be one of the most ideal platforms that we have today. The series starts with its 2018 debut edition at New Delhi on the 8th February 2018 followed by the Mumbai edition on 16th February 2018 and the concluding edition on 23rd February 2018 in Bengaluru.
There is no denying the fact that the in-house legal function has emerged from its shadows as a back-end working arrangement to a front-end leading function. Going forward, I have hope and belief that the legal managers of today are the CEOs of tomorrow, synthesizing the right inputs, and integrative goal with business. I wish to share a few insights on how best to transform in this epic journey that lends name, fame and financial upliftment to the in-house legal counsels.
A famous quote by Louis D Branders says “If we desire respect for Law, we must first make the Law respectable. Apt and aligned to the saying, if we want the in-house professionals more respectable; let us first make the function respectable. Which are those means? Let’s review.
Leadership & Management Challenges
Essentially the role of an in-house council precipitates to advisory, business enabling, transaction facilitation, compliance and defending company’s interest in multiple forums. Over a period of time, the role matured from being risk spotters and general advisors to strategic partners and business enablers. In my view, the role should transcend from where it is now, to manage an eco-system of legal services which originate from multiple sources. The shift in emphasis, therefore, has to be from being a resource tomanaging an eco-system of legal services. This is not possible, except though the support oftechnology. The eco-system I am referring to rests on the four pillars of business enablers, legal risk managers, becoming knowledge coaches to colleagues and leaders of domain expertise to take over business at the right opportunity. In the spectrum of quartet talent and career management are the most important issues in striving to meet the challenges of present times. Like a captain to a game, it is the individual and team performance that determines and showcases the function as what it should be, than what it might be. Thus, the lead is in your hands to take to a level, where it can be strategic & productive.
Slew of Legislation
With the change in government at the centre and states in the last threeyears, we found legislative enactments of substantive magnitude in the areas of Company Law, competition law, Arbitration law, Regulatory andadministration of justice. On the micro level, we are confronted by the regime of NCLT, RERA, Environmental law, Arbitration Amendment, besides others which are in robust pipeline like Data Privacy and Muslim Personal law. It is,therefore, imperative for the in-house counsels to be abreast with the changes and challenges in legislation and procedures. A hands-on expertise always gives the advantage to the organisations, in lieu of its dependence on external counsels for advice. However much one strives, absorption of this wisdom is realistic only with a technology back up. It helps on two counts, one to augment the existing knowledge and two to encompass the new age legislation.
Cross Border Transactions and M&A
India, now is a world power. Power is defined by a country’s economic environment, ease of doing business, political leadership and a trusted judiciary. India lacks in none, and is on the way up with growth rate pegged at 7.4% per annum, as we speak. It is but natural that the technology of the world knocks the Indian doors. The “Make in India” emphasis makes it imperative for the world leaders to join hands with Indian entrepreneurs for partnerships. I have never seen times better than this for a legal professional executing so many agreements on this front. This demand offers a big push to the in-house legal counsel to gear up to the specifics of deeds and documents, subscribing to international jurisdiction, choosing the seat of arbitration and even getting expertise in handling disputes with these international partners. The role of M&A is no less, which in itself rests on the pillars of successful due diligence, liaison with international legal firms, execution of definitive agreements, comprehension of regulatory compliance with RBIetal. These activities make the function a dynamic interface between the business aspirations and functional exuberance. The in-house counsels need to map these challenges in their brainstorming sessions to rise to the demands.
Reward,Remuneration and Succession Planning
It is no secret that the salaries of in-house legal departments are significantly lower than those in private practice.On the other hand, retention of talent became a daunting task to ensure that the company has horses for the courses. To bring in a robust work culture, aligned with the line of business an organisation is in, it is essential to recruit the best talent at all levels, entry to mid-level to senior level with a respectable compensation. This in itself motivates the layers of working to expect career growth and for the fresh grads to take up corporate assignments. Succession planning is yet another imperative one need to focus on, with the twin objectives of retaining the talent and getting the maximum from that function. It is thus the responsibility of the HOD of legal departments to discuss with the HR and top- management of the company to ensure fair compensation to the recruits. In the absence of the same, there will be a sure tilt for the practice at legal firms than being a part of an in-house legal counsel. If so, the companies, in the long run, would be on the waning proposition in their legal talent, which in turn affects their budgets going for a toss on legal working.
Blending Balance between External Legal Costs vs Internal Talent
Typically, it is a matrix one need to carefully plan and implement as an SOP, since the external legal spend is coming under greater scrutiny with the costs going up. A sense of confidence is needed to be instilled in the management to guide that a majority of work will have to be done in-house, in preference to the external firms. The disadvantage in outsourcing is that the in house talent tend to depend for everything and anything to the external firm for ease or convenience at the cost of fortifying the internal acumen. It has been my observation over a period of time that more we engage an external firm, the lesser the chances of a robust internal team. It is therefore suggested that a right blend would be to outsource the top end scrutiny of documents to the external firms, while templates for most of the routine document should be done in-house. Further, the competency and skill set to do the due diligence, which is critical to legal working, should be developed in-house, which in turn reduces costs. Legal professionals must recognise that budgets are sacrosanct and should contribute to the organisational profitability. Networking with foreign firms gives a substantive advantage in overseas transactions, at the right opportune time.
Integration with Technology
With the advent of huge repository of data, be it applied on transaction documents or for litigation briefing, proper tools are required to critically examine the contours of legal knowledge, which include statutes, case law, transaction experience – domestic and international, data analytics, communication from multiple resources, project management legal challenges and emerging facets of law. All this is not possible, while being on routine job, and also expected to develop on sunrise applications. Hence, proper tools should be sourced to update the domain knowledge and interpretative analytics for a better advisory. The tools that help out in this direction are data mining systems, work flow systems, contract generators and artificial intelligence systems.
It is with this brief, I set the tone for us to deliberate further, and raise the curtain for interesting deliberations during the day.
Senior Vice President, Adani Group
Summit Chair – The Grand Masters 2018, New Delhi Edition