Category: Features

Ravi Singhania (RS): how do you pick lawyers for your company?

Nandita Khurana (NK): When picking an outside counsel for our company, we are looking for a firm with an established track record in the practice area in question. We also want them to have an understanding of our industry, business model, company culture, and objectives. In addition, we are looking for lawyers who are genuinely concerned with safeguarding our interests and who can provide practical legal solutions suitable for our business.

RS: What are your service expectations from outside counsel?

NK: In essence, we expect them to be a strategic adviser to the company. We need counsel to provide a confident and well-thought-out solution on the issue concerned. In short, don’t present me with the options; provide me with a solution backed by your logic and experience.

RS: What kind of fee arrangement do you prefer?

NK: Billable hours are a passé. We are living in times of software and apps which provide real-time information and decision-making capabilities for live, short-term and long-term problems, as well as their financial management. We expect outside counsel to work as an extension of our in-house team and thus, expect more certainty and predictability in billings.

We prefer working with most of the outside counsel and law firms who offer alternative fee arrangements, options involving blended hourly rates, fixed fees, retainers, yearly fees, contingent fees, discounts and value-added services. We work on tight budgets and expect our law firm partners to help us manage those legal budgets.

It’s important, too, to find ways to offer more services in that money. For instance, an external legal counsel instantly becomes the apple of my eye if you are updated about my company through reading of our annual reports, news and social media. Be my trusted associate and keep an eye on what might positively or negatively affect my business to get that brownie point.

RS: Do you have different categories of law firms for different types of matters?

NK: We are living in an era of specialisation. Today, you have experts for every ailment. I see the trend is shifting towards boutique law firms that are experts in their fields and area of specialisation, be it infrastructure disputes, intellectual property, competition law, capital markets or aviation.

Therefore, we do prefer experts who have successful track record in their practice area and have experience of advising companies in our sector. It provides a better perspective, as well as saving us billable hours and a lot of spade work to make them understand what we do. A boutique firm with similar clientele in my sector has a better handle on my business, industry trends, competitors and challenges.

RS: What is your process for finding new external counsel?

NK: Word of mouth is one of the most important reference criteria when hiring outside counsel. We have our own due-diligence procedures, like looking at the ratings of legal directories like The Legal 500 and, at times, checking their references from other in-house counsel who have used their services.

Cold calls and legal articles on email are helpful if they are relevant to my particular area of focus, too. Spamming my inbox won’t help either of us. Know your client (or prospective client) before sending that newsletter or requesting for a meeting.

RS: Do you prefer local lawyers more than global firms?

NK: It depends on the kind of assignment and the complexity of matter involved. For multi-jurisdictional matters like M&A and antitrust approvals, we prefer firms which have resources, coordination skills, networks and management capabilities in the chosen countries and jurisdictions.

For local compliance involving both contentious and non-contentious matters, it is always better to hire locals.

RS: Lawyers have been receiving a lot of flak from the judiciary and the users of their services for using too much legalese. What is your take on the lawyer who does not speak legal language?

NK: I always prefer plain talk over legalese in legal opinions. I do not hire an outside counsel to spend hours reading a 20-page memo full of sections and clauses. Keep the language simple, so that I can also explain it to my management and board of directors who are not lawyers. In short, don’t send me an email with an attachment where you could have explained your point in a few words and then bill the company for a memo to client. In my experience, a lot of times I have felt that it was very much possible to explain a legal position in plain English in ten bullet points than a twenty page memo.

At the end of the conversation, Khurana asked where outside counsel feel a lack of support from in-house teams, to which Singhania replied:

For me, the general counsel is the best resource I have about a company. They understand the ecosystem of the business, the board of directors, and the management. We expect them to tell us everything which is relevant in helping them legally. Do not hide vital information and have faith in us.

We do not expect GCs to be the legal experts, after all, that is why we are there! But during the conversation and discussion on legal advice and the recommended course of action, at times GCs do not like to be treated like a novice and explained basics of legal position and procedure. When we assume they know it all, at times we’ve found that they were unaware and expected hand-holding. We are there to answer your question and no question is a stupid question; please interject and ask us as much as you want to know.

You mentioned that you look at ranking bodies when hiring a law firm. Therefore, after years of dedicated service, please do give out a positive recommendation to the legal directories and don’t ignore that email from the researcher.

Lastly, I have mouths to feed and maintain the momentum of the work being done for you. Plus, we do not have big budgets and cash flows like big companies. We are tirelessly working to ensure preventive compliance for you, strategies to save you millions in disputes, and managing your mergers and acquisitions. The least that we expect is being paid on time. If we are important to you, it should be communicated to the finance teams as well.

Also, trust me that I have the best interest of your company in mind, so trust my recommendation when I bring you the bad news and you should consider settlement.

India’s distinct cultural environment has given birth to a rich music scene that is fast-growing and ever-changing, but dealing with its gargantuan population and slowly developing telecommunications infrastructure may be key to a lasting legacy.

The average internet user in India spends 21.5 hours streaming music every week – nearly four hours more than the average listener elsewhere. But translating this enormous consumer base into strong bottom-line figures remains a challenge for the industry across the board.

Relatively speaking, India was an overdue entrant into the digital space for music. The late penetration of smartphones, combined with inadequate digital infrastructure made data consumption a premium service only available to the wealthy elite.

That changed in 2016, when telecommunications giant Reliance Industries and its mobile network subsidiary, Jio, entered the market. Following a significant investment by Reliance Industries into fibre-optic networks across India in the preceding years, the launch of Jio brought with it significant disruption to the domestic mobile landscape – namely, all inclusive and unlimited mobile data.

‘Reliance came in, gave away free data, and immediately changed the consumption habits of the average Indian user,’ says Ali Sachedina, general counsel and head of business affairs at JioSaavn, a domestic digital streaming service and itself a subsidiary of Reliance Industries.

‘Before Jio launched, people in India would send a WhatsApp message, turn off their data and turn it back on to receive a message because it was insanely expensive for the average Indian to have a proper data plan. After the launch, whether you were a doctor or a rickshaw driver, people were able to live stream on their phone – whether that was music or video – giving rise to companies like our own.’

Change the Tune

The sudden availability of free data in India had a dramatic effect on the digital environment. From a standing start in 2016, India now ranks as the largest consumer of mobile data globally, helped by the fact that it also boasts the lowest prices for data consumption.

‘This has given billions of consumers access to the internet and legitimate sources of content, which is really driving the legitimate growth of digital music in India,’ says Sankalp Dalal, head of legal at Zee Music Company.

Established two years prior to Jio’s data revolution, Zee Music Company had already snapped up a large chunk of licences for Bollywood music, but saw marked growth following improvements to the availability and accessibility of mobile data.

Similarly, JioSaavn also finds its roots in Bollywood music. Created as the result of a merger between JioMusic, the digital music arm of mobile operator Jio, and Saavn, an entertainment distributor focused on Bollywood and entertainment, JioSaavn is the strongest domestic player in India, accounting for 37.8% of the streaming market. Crucially, the 2018 merger combined two key business strands vital for streaming businesses: licences and users.

With 104 million monthly active users and the rights to more than 50 million tracks, the combined entity boasts a wealth of perhaps the two most important factors in the business. Those two factors are also inextricably reliant on the ability of the company’s counsel to both establish and navigate the complex web of licences. JioSaavn works with thousands of different record labels and music publishers, requiring constant negotiation by the business and its counsel in a constantly evolving environment.

‘There are three key stakeholders in any licensing endeavour: the finance team, who model and understand what our obligations are from a revenue perspective; the content team, who handle the day-to-day operation of the labels and licensors; and the legal team, who need to align everyone’s wants and needs in the agreement,’ explains Sachedina.

‘Legal needs to work closely with the other teams when forming and reviewing the agreements. We have to consider the various implications, especially when it comes to the revenue element and the limitations on a product or service. We have to ensure that everything is aligned, before effectively expressing that to the licensor.’

As the music industry in India evolves, achieving alignment across the business functions will become increasingly imperative. Like in many growth industries, short-term profitability – particularly when the entities are well funded – is often cast aside in favour of prioritising factors that will lead to long-term revenue growth.

In the digital streaming space, expanding the userbase and catalogue of licences are the top priorities. But, unlike in other industries, the nature of licensing – particularly in a global environment in which other jurisdictions have already reached maturity – means that costs are a major consideration from the outset. Compensation is generally determined in terms of the number of times the property is streamed, meaning that for each user listening to music, there must be an associated model for contributing towards the costs incurred.

‘Margins are getting smaller. A fair amount of our revenue goes to pay content licensors, both on the music publishing and on the sound recording side. It compels us to look at other avenues of revenue generation and ways to add to our bottom line,’ says Sachedina.

‘As legal, we need to look at everything from a risk management, compliance and value-enhancement standpoint. If there’s a new pricing structure we want to address, we have to look at it through a legal lens and how it affects us in our other endeavours. This requires us to have an absolute knowledge of the business.’

Face the Music

On a global level, as the music industry shifts towards a business model predicated on mass consumption via digital streaming – one where artists are compensated based on the number of times their properties are played – the potential of India and its 1.3 billion people is vast, with international players taking notice.

‘In the past, we were able to convince labels and licensors that India operates with a very unique set of circumstances – the userbase is different and their consumption patterns are different,’ explains Sachedina.

‘Now we’re getting to a point where the labels and licensors want us to operate on the same level as other streaming services around the world.’

Driving that change has been the entrance of major global players into the Indian market. Earlier this year, Spotify and YouTube Music both officially came online in India, armed with deep pockets, expansive licences and best-in-class technology – as well as different value propositions for consumers.

‘If there’s one challenge that any music streaming service or content licensor has, it’s YouTube. You can’t argue with its scale or that their rates are so low – after all, it’s hard to compete with free,’ says Sachedina.

‘The challenges from a content perspective are large, but it’s primarily a pricing problem. The issue is with the Indian community itself: getting them to attribute value to a platform or service that delivers music. The difficulty lies in getting your average Indian user to see value in a premium service because, quite frankly, if it’s free – why should they pay for music?’

It is this struggle to compete with ‘free’ that has dominated the conversation around digital music services, particularly in India. Services like JioSaavn offer their platform for free, but give users the option to pay a subscription fee to gain access to a premium service – unlocking exclusive music, offline features and higher quality streams, in addition to eliminating advertisements.

Out of the 150 million active music streaming users in India, those who subscribe to fee-paying platforms make up only about 1% at present.

‘There are about one million paid subscribers, meaning there’s huge growth potential there. But they need to figure out a model which appeals to the Indian consumer. In my view, streaming services in India will need to find a hybrid between subscription and advertising models in the long term,’ says Dalal.

The challenge comes in convincing consumers that the premium option is worth paying for. The widespread accessibility of music on platforms like YouTube and the sizeable amount of pirated music create substantial problems in encouraging consumers to pay a fee for the additional benefits.

‘The traditional model of the free user and the paid user was that you could download music and listen to it offline. But as connectivity increases and improves, the advantage is lost,’ says Vijay Basrur, founder of OK Listen!, a digital platform for independent artists to earn money through streaming.

‘I think a lot of businesses are now trying to have a subscriber model drawn by original content, or an equal system around music which could extend further than any existing pure streaming services. Businesses like JioSaavn, Gaana, Amazon or Apple – everything is part of a broader system play. They have the benefit of bundling the music together with other services, which helps them by not allocating the entire subscription costs.’

Beating the Black Market

Shifting consumers on to platforms for the legitimate and legal consumption of music is a potential game changer for the industry. Both premium and freemium revenue models capture market share that was previously lost to piracy, bringing new sources of revenue into the mix that were unattainable before the advent of streaming.

‘In 2008, music was primarily consumed on phones via Bluetooth and pirated tracks. Outside of that, the industry was purely physical media sold at an incredibly discounted rate – the markup was set at a bare minimum, yet there was still rampant piracy,’ says Sachedina.

‘Piracy was tackled really effectively by Bollywood, where there was a physical product: DVDs, CDs or tapes. They would literally have police going out and shutting down pirate stores.’

The fact that music piracy has primarily moved to the digital realm does make tackling it a more involved process, but Sachedina points to the success of shutting down illegal cricket streams as evidence that it’s a solvable problem.

‘There’s nothing bigger in India than cricket. Hotstar deliver that content exclusively and have been very effective in stopping pirate cricket and World Cup streaming through a combination of both legislative and judicial orders,’ says Sachedina.

‘Music has yet to be given that sort of push, but that is changing. One of the reasons is because music industry organisations that represent us haven’t, until recently, made it a focus. At Saavn, we’ve been proactive in speaking to labels and helping them understand that piracy is a real issue. Not only this, but it’s an issue that, if properly addressed, would be of benefit to everyone.’

Cracking down on piracy has the ability to have transformative economic effects.

In 2014, it was estimated that 99% of all music in China was obtained illegally. Subsequent action by Chinese authorities resulted in millions of songs and a swathe of websites being taken down overnight, as well as commitment to ongoing enforcement.

Since then, China’s music market has transformed. Tencent Music, the music streaming arm of Chinese internet behemoth Tencent Group, counts 644 million monthly active users across its platforms and controls more than 70% of the market. Since its 2016 launch, the business has been spun off and floated on the New York Stock Exchange, with a $24bn market cap.

‘All we have to do is look at China, who were trendsetters with what they did. The proof was in the pudding: there is immense value in tackling piracy,’ says Sachedina.

‘We’re still missing an effective judicial and legislative protocol to address piracy, but the Indian government has been incredibly receptive. They’re getting ahead of the curve, but it will require a joint effort with the industry bodies in India. We need to find a solution that maintains neutrality – not being draconian by implementing a stringent anti-piracy regime that impedes personal freedoms or access to content but, rather, a balancing act.’

While a series of legislative responses will take time to materialise and be enforced, positive signs are being seen from the judiciary in getting on top of piracy.

‘The Indian courts are being proactive,’ says Dalal, noting that even small procedural changes can have a marked impact on the workload of counsel.

‘Recently, the Delhi High Court passed an order so that when infringing websites have been blocked, content owners only need to go to the registrar of the Court to then block any mirrored sites. You no longer need to keep going back to court to ask after an injunction for affiliated sites.’

Clear as a Bell

Barely three years on from Jio’s data revolution, India can now count itself as one of the most attractive markets for digital streaming globally. While revenue models and legislation are yet to reach maturity, the rapid development of infrastructure and subsequent change in consumption habits are causes for optimism.

‘I think we’re only just scratching the surface in terms of music’s potential in India, as now there’s an audience and an ability to reach them very easily,’ says Basrur.

‘There is an issue with revenue: monetisation can be particularly hard, especially when you deal with independent artists like we do. But we have already seen a massive change. If we take ten years as a measure of time, we have witnessed a massive shift occur in just the last two years.’

‘At present, music in India is getting around five billion streams every month. I expect that to rise to at least ten within the next couple of years, opening more opportunities for businesses and customers,’ adds Dalal.

The pace of change that has occurred in India, combined with the only very recent entrance of major global players, means that a maturation and sophistication should be expected as the industry settles in. But in order to capture that potential, ensuring that the regulations and legislation keep pace with innovation will need to be a priority.

‘We are moving at an accelerated rate, but I’m not sure that all of our infrastructure from a legal, compliance and regulatory point of view is in order; at least in a way that’s best for the Indian user,’ says Sachedina.

‘I do think that’s going to take a year or two to get ironed out and dealt with properly, but it’s getting there. I’m very optimistic about the future of streaming and content delivery.’

Everything is up for grabs at Teva Pharmaceutical Industries – well, certainly from an external law firm perspective. The Israeli-based company – the largest manufacturer of generic drugs globally – recently announced that all existing law firm relationships were under review, with a view to reducing the number of law firms used and to cut costs. While conceptually, that may not seem like anything groundbreaking in and of itself, Teva has taken things further than usual – going as far as warning existing firms that it is more than conceivable that they won’t continue to be instructed.

‘Revenue growth at Teva is flat. Law firms’ rates are going up. We have to do something different – that is it in a nutshell,’ explains David Stark, chief legal officer at Teva Pharmaceutical Industries. ‘We took a run at this five years or so ago. Things were hectic back then, and there wasn’t really the ato do it, and it was incredibly time intensive.’

The company’s well-documented cuts took place from late 2017, and the legal team was instructed to align legal spend with the wider business. A year ago, in mid-2018, the process of reducing outside counsel spend began.

‘The company had been in an acquisition phase leading up to this, and when you acquire companies, you acquire law firms.’ When pressed on how many law firms Teva uses, Stark admits it is many hundreds (our own research at The Legal 500 suggests around 700 in total). ‘The ultimate goal would be to use just one, but in the short term, that is just unrealistic. But we can make a significant reduction, even by 50% in year one.’

The process began with Teva writing to all of its outside counsel, informing them of the company’s review process and the reasons underpinning the exercise.

‘We wanted to have transparency, we wanted the firms to know what we were doing,’ says Stark. ‘With some firms, we have very strong relationships. It’s no comment on our current firms, but we aren’t going to move work around for the sake of it. It’s got to be a compelling reason, at a similar or lower cost. Firms that we are currently working with should see this as an opportunity.’

Knowing law firms as we do, this must have come as something of a shock – so how did they react?

‘A mixed bag, to be honest. Firms that are doing a lot of work for us, to be honest, don’t like it. They see it as a big ask, to effectively go through the pitch process again,’ says Stark. ‘Firms that do a little bit of work for us are the ones that are really excited. And firms that we don’t know at all, that we have invited in to tender, are not sure what to make of it.’

But Stark says that the firms that succeed as a result of the lean process will have bigger scope within Teva.

‘We are looking to have fewer people interacting with law firms, but there have to be smarter approaches. Yesterday I was in the office with a senior lawyer at one of our firms, and what he wanted to talk about was rate increases!’

Higher rates seem to be more of the norm at the moment, partly because many clients are letting them get away with it.

‘The economy is on fire, and top firms gravitate to easier clients. We may not be able to afford some firms, so we have to choose our set of firms very carefully. Firms we instruct need to have flexibility and be rate competitive,’ says Stark.

‘At present we have more high-end legal work, so why fool around with low rates? But a lot of that work is coming to an end. From here on, it will be slow but steady progress. It won’t be less money, more work, but instead more certainty around a broader bucket of work for the preferred firms.’

Stark is being deliberately cautious about the amount of external spend that Teva is currently making. While he coyly admits that it is ‘more than $100m’, our own research team has been digging deeper into this. Looking at the firms and types of work that is typically done, we estimate that the actual number will be over three times that, at around $330m. Some firms are estimated to be in eight figures for their fees, so there is a lot at stake for partners if they lost that work.

‘There will be benefits for the company,’ says Stark. ‘We will get some savings. But there are definitely going to be some surprises in store, and there will definitely be some lessons learned.’

Working with Teva and Stark on this process is Smarter Law Solutions. Founded by Trevor Faure, formerly global general counsel at Ernst & Young, Smarter Law consults with companies to cut legal costs and implement lean processes.

Under the Smarter Law led-system, firms that submit to the process are assessed on pricing and other data metrics and, following a period of research and interviews, a far reduced panel of firms will be announced by the end of the year. Just what that process entails is detailed in Faure’s new book, Smarter Law: transforming busy lawyers into business leaders.

I often find myself looking at theoretical books that might have some practical application in the field of law, but this book is based on the experiences of over 200 in-house case studies. What the book allows GCs to do is dip in and out of the experiences of their peers and cherry pick the techniques and applications that will work for their in-house departments. To find out how the kinds of techniques that Teva are using currently, the ‘Win: Win: Win RFP Process’ chapter is a must read. It explains how a tender process allowed a client to pay law firm bidders more than their proposals and still reduce spend by 44%.

In recent months, we have seen a growing movement back to simplicity, from the #bringbackboring campaign, to the simple mantra of ‘people, process, delivery’. The Smarter Law approach isn’t based on the future of law, it is firmly rooted in the here and now. What GCs can do right now to improve efficiencies, working practices and transform the function. The best learning comes from who have done it before. Don’t take my word for it, get a copy and delve into it yourself – you will benefit and you will learn. Available from: gcm.ag/smarter_law.

As the world’s second most populous country, India accounts for 17.5% of the world’s population. It lags behind China by just over 50 million – a hair in the grander picture. And it’s rapidly catching up: on an annual basis, India’s population growth rate of 1.2% is more than double that of China – as the latter still tries to recover from the rigours of its one-child policy.

But while population growth is largely seen as a means of economic development, so too can it signal demise. The burden on cities, services, and infrastructure must be both navigated and alleviated if a rapidly growing population is to reach its full potential. The need is such that the infrastructure question was a cornerstone of this year’s election, with impending change already apparent: the Bharatiya Janata Party, led by returning Prime Minister Narendra Modi, pledged $1.44tn towards infrastructure in stark contrast to its primary opponent, the Congress party, which instead planted a flag on the war on poverty and the battle to create jobs.

These projects – and the negotiations, deals and relationships behind them – are quite unlike anything that legal teams in other industries might face on a regular basis. Often spanning years, bordering on decades, helping guide these projects to fruition requires a different kind of legal management – and, for the teams that can thrive in this space, it provides the opportunity to play a vital role in the ongoing development of one of tomorrow’s most critical economies.

National Importance

When it comes to the development of infrastructure, the work being done by legal teams takes on an added importance, especially in a country such as India, where the infrastructure question is so closely tied to the nation’s future economic prospects. According to the India Brand Equity Foundation, India requires over $777.73bn worth of investment in infrastructure by 2022 if it is to enjoy sustainable development. And there is much work to do. Despite its massive potential, in 2018, India ranked at 44 out of 160 countries ranked in the World Bank’s Logistics Performance Index, a measure of countries’ performance in categories such as trade and transport infrastructure, and competence of logistics services.

The issue of electrification, for example, is one of the foremost priorities for India’s infrastructure, not least due to the fact that India’s 263 million farmers – those least likely to be connected to the grid – represent one of the country’s most significant voting blocs. A scheme to electrify all households in India by December 2018 garnered much attention when it was announced in September 2017. This was no small undertaking: government surveys at the time counted 40 million households without power. The goal was deemed by the Prime Minister’s Office as satisfied in December 2018, though the target was trimmed to encompass only those households who had applied for the scheme – some 25 million – and millions of households remain without.

‘Most of the countries who have experienced GDP growth have been coupled, historically, with increases in electrification. You have to provide power for industries to run, and for people to be employed,’ explains Tejal Patil, general counsel for South Asia at GE. Patil has advised many areas of GE’s multifaceted business, and as such, has seen the many ways in which infrastructure affects conditions on the ground.

‘The power sector is huge in India because of the size of the population – as is the case with industries like aviation and healthcare. A lot of what is being generated here is being consumed domestically, and that’s the enabler for GE – it plays a crucial role as enabler in critical growth sectors, which is really exciting.’

Being a critical adviser in an industry at the centre of the government’s largest concern – infrastructure – means that business is good and counsel are busy.

‘The government being interested in infrastructure is actually the best thing to happen to all construction companies, and that’s why so many international companies have come into the markets,’ explains Rashmi Kathpalia, legal head at TechnipFMC India.

‘It’s the opening of the infrastructure sector, which is very important to the growth of the country. When you are working on real Indian projects, you feel like you are in the mainstream, and contributing to the development of the country – because the country is nothing without its infrastructure.’

Grappling with Government

It is therefore critical that projects are awarded to contractors with the ability to deliver them to prescribed timelines and tightly managed budgets. In that respect, the government has its own role to play in ensuring India’s vision for the future is realised. As a contract partner, it is in the government’s interest to be as supportive as possible, something that Kathpalia has seen first hand.

For TechnipFMC, a recent example is the award of contracts for two fertiliser plants in Jharkhand. Enormous undertakings, the plants are designed to produce 2200 tonnes of ammonia and 3850 tonnes of urea per day – two products in high domestic demand. The project’s status as one of national importance has helped TechnipFMC throughout its lifecycle.

‘These fertiliser projects have been promoted by the Prime Minister’s Office. There was a public sector consortium entity that was created for the bidding, and because it comes with the promotion of the Prime Minister’s Office itself being interested in these two fertiliser complexes, the ministries work very well and very fast – negotiations are very fast,’ explains Kathpalia.

‘Government tenders can oftentimes take very long initiating and proofing and, at the end of it, the timelines that are required can become very difficult to achieve. In that case, very often what happens is that it is delayed for some reason – oftentimes leaving the contractor quite helpless. This can enact clauses included which mean you are not going to be paid any compensation for any delays, despite whether or not you are at fault.’

‘But if the Prime Minister is interested in that particular project then it becomes a lot easier for the whole process to conclude, so that the execution actually starts and concludes within the timelines – because they release the finances fast enough and, as we complete our work, the finances keep coming in with each phase.’

This is echoed in Patil’s experiences at GE, particularly when it comes to energy infrastructure projects, though she admits that having over 60% of the company’s work coming from the government has its pain points to go along with the positives.

‘There are pluses and minuses. I think one part of this is the entire government process. It is a public tender process that leaves little or no room for negotiation. The terms and conditions are pretty much set in stone and must be adhered to. There is a window to attend pre-set meetings where everyone sits together and explains their deviations. It’s not really a private contract, so from a legal standpoint it’s more about managing the risk rather than negotiating a very beneficial position. If all the bidders meet the technical specifications, then the one with the lowest price wins – there’s no other negotiation,’ she explains.

‘As the government is interested in infrastructure development, the size of these projects ensure focus. So, if you have obstacles or difficulties during the project execution, they can be addressed at the highest level since the government too becomes a key driving force to ensure successful completion of the task.’

Legal Engineering

When a large construction company closes a deal with the government to deliver a critical infrastructure project, the agreement between the two parties is often a far different creature to a typical B2B contract. These are agreements, for example, to build and maintain miles upon miles of railroads for a number of years, often decades. The in-house teams drafting and negotiating these agreements therefore need to have a firm grasp on the operational requirements of the project. What amounts of materials are required? How much labour will the project call for? Does the company have the technological capabilities required to deliver the project on time and on budget?

Kathpalia explains that all of these requirements mean her department must be of a different character to your typical legal team.

‘We have to understand how robust the project execution team is to be able to undertake that task, and so it’s not just regulatory. Our exposure is not just in terms of the price, but each contract comes with a particular timeline stating that it has to be concluded in X number of months. If our team is not going to properly assess the number of man hours required, or the price, or procurement requirements, or things like that, then we would be completely out of pocket,’ she says.

‘If you look at the bigger picture, when we assess the contract and then price the contract, when we understand the risks within the contract and we understand the full scope, legal is not just understanding what the contract says, legal has to understand from the risk and the project execution department what the exposure is. If, for example, it’s a revamp [of an existing facility], we cannot afford for the property that already exists to be damaged. Sometimes the owner may be having the indemnification for it, sometimes not, sometimes we may get insurance cover for it, sometimes not. So we have to work with that.’

GE’s Tejal Patil voices a similar sentiment: ‘In terms of anticipating risk, you cannot review these contracts in a vacuum – there has to be a return on experience. For example, you need the supply-chain members telling you whether they can supply something in time in order for you to accept a liquidated damages clause. If a lawyer reviews contracts in isolation, sitting at a desk, you’re never going to be able to assess the true risk.’

Building – and Maintaining – Bridges

For those companies delivering enormous infrastructure projects to India, the list of potential clients is a short one. The majority of the work will come from the government directly, but even in those instances where a company like Tata Steel, GE or TechnipFMC will be contracting with other private entities, there are very few players in the market with which to engage. Because of this, relationships are key, and disputes must be approached carefully.

‘Traditionally, India is a litigious country and the process of dispensation through the legal system is slow. Most companies will be straddled with a number of cases. Depending upon the industry, the portfolio of cases varies,’ says Dipali Talwar, former group general counsel of Tata Steel, who also spent several years at Pfizer.

‘I think the requisite skills for lawyers and particularly in-house counsel would be their ability to take a proactive call on risk and foresight to ensure no dispute arises in the future. Counsel must excel in applying their judgement on current legal trends, impending legislation as applied to their industry and, more particularly, the business process and agenda of the corporation they are part of. The unique ability and opportunity of the in-house counsel is to be able to prevent disputes or non-compliance. In-house counsel should also be able to partake in discussions on an area where impending legislation may result in change.’

Another wrinkle in the disputes issue is the complexity and long-term nature of these projects, where all too often it’s not until years down the track that grounds for dispute are discovered.

‘When the going is good, everything is good,’ explains Kathpalia. ‘It’s only at the end of the project that you realise you are out of pocket, or that you have been short-changed and you want to raise the claim, whether it’s against the owner, or against your consortium partner or a sub-contractor. This means that, as a team, we have to be engaged and ensure we are operating partners throughout the lifecycle of the project.’

Because the industry runs on low-volume, high-value, project-based contracts, there are very few bridges available to be built and burned. Fortunately, this is a reality that is largely accepted by all corners of the sector.

‘Most sectors are small and close knit, so it’s important to find a way to collaborate and have meaningful dialogue and resolution with relevant stakeholders – be it the government, competitors, vendors, channel partners or customers,’ says Talwar. ‘It is often not worth the cost or the time to enter into formal disputes – litigation or arbitration.’

‘The organisations are used to supplier disputes,’ adds Patil. ‘Even if you have a dispute, it doesn’t prevent you from getting the next order, because they understand that it can sometimes happen in large contracts. The public sector undertakings in India don’t like to settle claims (sometimes even large claims) during execution – account reconciliation is usually at the end of the project. It may be ok for a large corporation like ours but, from a cash-flow perspective, for a smaller company, it gets challenging if the payments aren’t made in time or the dispute isn’t settled along the way.’

Given the cost associated with pursuing disputes in this industry, and the particular need to protect vital relationships, the focus must necessarily shift from reacting to disputes themselves to preventing them in the first place. This, explains Kathpalia, is an art in and of itself:

‘While there are many companies that will put some amount towards disputes expenses, we rely more on our execution: that our execution should be so masterful that we should not have to go into claims at the end of the project; to bring it to light on a regular basis so that the client too can assess what the changes are. And so, I hope I’m not speaking too soon, but so far we do not have any litigation or arbitration pending as far as our projects are concerned.’

Arbitration

One less adversarial method of dispute resolution is, of course, arbitration – a mechanism that is becoming more common in these industries. But the usefulness of an arbitration clause is restricted by the infrastructure that is in place in the relevant jurisdiction, and India, like many countries, is beefing up its capacity to meet the needs of businesses in this respect.

A judicial committee convened in 2017 highlighted the barriers to the development of arbitration in India: namely the time taken for such proceedings to progress through the courts, and what was called ‘an excess of judicial involvement’. The committee recommended a reformation of arbitration in India with a view to establishing the country as a globally competitive arbitration destination. These recommendations were approved and resulted in amendments to the Arbitration and Conciliation Act 1996. Among the changes were the establishment of the independent Arbitration Council of India to promote the use of arbitration and other alternative dispute resolution methods, and the introduction of time limits for the presentation of submissions before arbitral tribunals.

‘Arbitration as an alternate dispute resolution avenue is growing. There are about three new arbitration centres which have been established in the last few years. You have the Delhi Arbitration Centre, the Mumbai Arbitration Centre, and a couple of private arbitration centres, and they’re expanding with many retired judges and lawyers on their panels. Where there is still a bit of a gap, is technical expertise,’ says Patil.

‘For disputes of this nature, you need a technical person on the panel. Recently we have some good experiences. Major disputes tend to use what we call ad-hoc arbitration, where one party appoints one arbitrator, the other party appoints a second and then a third who is chairman of the panel is appointed by both. These usually tend to be retired judges of the Supreme Court, High Court or eminent jurists.’

These ad-hoc arbitrations – as opposed to institutional arbitrations held in the kinds of large centres now opening – are still the primary preference in India, despite a finding by PricewaterhouseCoopers and Queen Mary University of London in 2008 that 86% of global arbitral awards in the preceding ten years had been from arbitral institutions. The committee was sceptical of the use of ad-hoc arbitrations in its 2017 report, citing the time taken for such arbitrations to conclude and the high costs associated with them. But with a concerted effort by the Indian government to make institutional arbitration a viable option, this may change.

‘The positive change we’re seeing is the government moving towards institutional arbitration in its contracts. In the past, there were contracts stipulating a single arbitrator, who would be a government employee,’ says Patil.

‘These three centres are growing. We have not used them, but we are looking into their services as more government contracts are incorporating them now.’

GC: What do you think should be the priority areas/sectors for the re-elected Indian government?

Shailendra Singh (SS): The long term priorities of the government should be environment, affordable housing, drinking water and sanitation, waterways development, financial inclusion and development of hard infrastructure.

Capital investment in hard infrastructure development, drinking water and sanitation, renewable energy and energy efficiency schemes, among others should be in focus. Electricity distribution should be another focus area.

GC: Which steps taken by the previous government in the infrastructure sphere need a further push by the re-elected government?

SS: Over the years, the speed of road construction has become the benchmark for India’s infrastructure creation. Now, the central government has set in play a new integrated infrastructure programme, which involves building roads, railways, waterways and airports. The centre has also been trying to leverage roads, railways and waterways to bring India’s logistics costs down to 8%, to make the economy competitive. India has long grappled with high logistics costs at 14% (as a percentage of product cost), which make exports uncompetitive vis-à-vis those of China, where logistics costs are about 8-10%.

The last five years have seen massive spending in roads, railways, water, irrigation and urban infrastructure. Where roads are concerned, 52 projects worth 37,019 crore were awarded between 2015 and 2018, under the new 30-year lease toll-operate-transfer (TOT) model introduced to recycle capital and auction operating road assets to private equity investors.

With the view to reducing India’s carbon footprint and ensure faster movement of goods, inland waterways are being explored as an alternative. The continued push for transport through waterways is required to make it competitive and a viable option. The development of terminals at Varanasi, Sahibganj and Haldia, and the development of NW-1 needs to be expedited.

Further, to ensure faster and more predictable enforcement of contracts, the arbitration and other alternative dispute resolution mechanisms have to be given a recognised statutory basis. Sectoral regulators promised for certain infrastructure sectors such as MRTs and coal should be implemented as soon as possible.

GC: What are the key areas of focus in the power sector and what steps can be taken to increase usage of renewable energy and ensure global commitments to reduce India’s carbon footprint?

SS: Reforms in the power sector are necessary to ensure that all stakeholders improve their financial health. The regulatory commissions have to be made more professional to implement in spirit the mandate of the Electricity Act, too.

With regards to the renewable energy sector, while the mandate under the existing laws is clear on renewable purchase obligations that must be met by the distribution licensees in the procurement mix; the enforcement of the deterrent needs improvement. The distribution licensees must be held to strict renewable procurement obligations, as well.

GC: What are your thoughts on the potential of public-private partnerships (PPPs) and the impetus that the government should give?

SS: Funding India’s wide-ranging, $500bn programme of infrastructure expansion over a five-year period is likely to be beyond the means of total government funding, so policies have been designed to facilitate private investment to the maximum level possible. If the Indian government’s targeted level of private sector involvement and investment are met (approximately 30%), the quantum of funding required would be around $150bn – dwarfing the investment achieved over the past decade.

The government has, in the last three years, undertaken some noteworthy steps to strengthen the PPP framework and the enabling ecosystem in India. This includes formulation of guidelines for new innovative PPP models, with due consideration to the extant risk outlook and investor appetite, like monetisation of publicly-funded highway projects worth approximately 35,600 crore under TOT and construction and expansion of over 60 highway projects under Hybrid-Annuity-Model (HAM). With the implementation of PPP models like HAM and TOT, the government has taken over the project implementation risk and thereby revived the interest of private players and financial institutions to a considerable extent. Furthermore the government has liberalised the exit policies for concessionaires to free up equity for re-investment into new projects, approved the policy of railway station development through PPP and is currently in the process of formulating suitable PPP policy for newer sectors and asset classes.

Some of the other measures include the setting-up of a National Infrastructure Investment Fund (NIIF) to channel foreign institutional funds into infrastructure; introduction of a PPP component in the new metro policy; amendment of the Arbitration and Conciliation Act 1996 to make dispute resolution more cost-effective and time sensitive; 2.11 lakh crore plan to recapitalise public-sector banks aimed at reviving bank-lending; and introduction of ease of doing business (EODB) state-level ranking, to help the government to push through reforms in sectors that are primarily state subjects.

GC: What legal impediments do you foresee for a prospective investor in infrastructure?

SS: For any prospective investor, certainty of the regulatory regime is of prime importance. Regulated sectors generally assert the rules of the game upfront and there is regulatory certainty of the trends that one can expect in the sector. To improve investor confidence, sectoral regulators need to be actually set up – a mere policy announcement will not do. This also assumes significance since there is an arms-length distance between the government and the participants of that sector. Therefore, existing sectoral regulators such as AERA need to be strengthened and new ones for urban transport and coal, for example, needs to be set-up to increase investor confidence.

Also, overlapping jurisdictions in the context of multiple statutes needs to be addressed. For example, the Specific Relief Amendment Act that was recently notified seeks to cover a gamut of infrastructure projects within its ambit that are specified in the Schedule to that Act. However, a bare reading of the Act raises three primary concerns: one, the said statute is applicable to a ‘contract relating to an infrastructure project’, making it sweeping in nature to potentially include within its ambit sub-sub-contractor(s)-level project agreements. Second, since the provision is limited to suits for specific performance under the Specific Relief Act, it may have a limited impact since any contract that has an arbitration clause would effectively be out of its ambit. Third, since many, if not all, infrastructure sub-sectors annexed to the Schedule of the Amendment Bill are governed by their respective sectoral regulators, the interface between sectoral regulators, the players/elements of the sectors that are regulated and the contractors who can avail the protection provided under the proposed regime would throw complex and myriad legal issues.

From a contracting perspective, the contracts in the infrastructure contract need to be more balanced and both the oncessionaire and the authority must share risk and reward appropriately. The idea that all risks need to be passed on to the concessionaire, while tempting, from the government point of view must be resisted to produce much more bankable documents and to encourage global participation.

GC: What are your thoughts on the recent amendments to the Commercial Courts Act and its implications for infrastructure development?

SS: The government, on 3 May 2018, promulgated an ordinance amending the Commercial Courts, Commercial Division and Commercial Appellate Division of the High Courts Act, 2015 (Act). These amendments are an attempt to expand the scope of commercial courts in India. It reduced the dispute value that can be settled in the commercial courts to 3 lakh rupees from the earlier 1 crore rupees limit, and, it introduced mandatory pre-institution mediation.

This would bring a large number of disputes within the ambit of the commercial courts which were previously outside their scope. It appears that the intent is to meet the parameters used to gauge enforceability of contracts in the World Banks’s Ease of Business Report, since the cases considered for the report are the ones with claim values worth 200% of income per capita or $5,000, whichever is greater. With this change, it is expected that the data of the commercial courts constituted under the Act would now be used as the pecuniary jurisdiction starts from 300,000 crore. However, specifically as it regards infrastructure, it would have limited impact since the cases that would fall within the realm of the Act would be disputes arising at the SLA level and the key project contract and the disputes thereof would still be the subject matter of the sectoral regulator.

GC: What are your views on the impact of the GST regime on the infrastructure sector?

SS: The biggest bugbear that GST poses to the infrastructure sector is the restriction on availment of credit of input side GST, if it has been incurred for construction of ‘immoveable property’ (other than ‘plant and machinery’, as defined). For several large infrastructure projects which are coming up on a PPP basis, the cost of the construction of the project assets is significant – the GST incurred on this cost of construction being unavailable as credit against output GST by the project SPV leads to significant spikes in project cost, followed by litigation to invoke ‘change in law’ provisions under the relevant concession agreement to pass on the cost to the end-customers/users. This aspect ought to be remedied soon if investment in infrastructure, especially on a PPP basis, is to be boosted.

Further, while no GST is payable on advances for goods, GST becomes leviable on advances for services even though the credit of such GST incurred on advances for services is available at a later point when the services are actually received. This is effectively the proverbial double whammy, leading to significant cash-flow issues, especially for construction-sector players.

More specifically, ambiguity prevails over applicability of GST on concession agreements for construction of roads, especially under the HAM, which needs to be clarified along with clear guidelines about recouping such GST (if any) by the private concessionaires from National Highways Authority of India (“NHAI”), the nodal agency of the Indian government in charge of construction of national highways.

Also, there prevails a lot of ambiguity apropos GST applicability in solar and wind power projects despite several representations and recent amendment. Here too, we at Advaita Legal have represented the Wind Turbine Manufacturers’ Association before the Delhi High Court, seeking to achieve greater clarity and a more beneficial GST implication for wind power projects.

GC: What are the key contractual disputes that are arising out of the Goods and Service Tax regime?

SS: In our experience, there are a number of instances where contractual disputes have arisen owing to the onset of GST:

• Impact of ‘change in law’ benefit: in calculating the change in contract price necessitated by a ‘change in law’, disputes frequently arise as to whether there is actually an increase in tax burden or the other contracting party is trying to profit from a change in the tax regime. Disputes of this nature are not only leading to arbitration claims but also to scenarios where the recipient threatens the supplier with a complaint to the anti-profiteering authority as a strategy to avoid arbitration.
• Delay as an excuse to nullify a ‘change in law’ benefit: construction contracts provide that in the case of a delay on the part of the contractor, the employer is not liable to pay increased tax rates or new taxes. Therefore, if the employer is able to prove that the project was delayed by the contractor then the whole incremental tax cost due to GST or any change in GST rate will have to be borne by the contractor. However, establishing such a delay is a lengthy process often leading to arbitration, and until then the contractor has to bear the burden of incremental taxes. This is emerging as a serious challenge in large construction contracts.
• Forcing the contractor to adopt or continue old contracting structures: before GST, the conventional wisdom in tax structuring of contracts involved splitting a turnkey scope of work into separate supply and services contracts. However, after GST such structuring has mostly been rejected by advance ruling authorities, who treat the multiple contracts together as one composite or mixed supply. Such collapsing of separate contracts leads to a higher GST liability and unless a clear indemnity is pre-negotiated, this leads to heated contractual disputes (and at times arbitration claims) in respect of such incremental GST liability.

The foregoing is not to say that contract structuring is are longer possible under GST – however, the principles underlying such structuring are often different under GST; the difference in such principles and the concept of ‘substance’ needs to be duly factored in, while planning any contract structuring.

• Forcing the contractor to pass on input credit agreed in the contract pre-GST: often, long-term contracts entered pre-GST would contain a stipulation that the contractor pass on a specified quantum of input tax credit to the customer. The amount agreed would, of course, be based on the earlier pre-GST tax regime and common sense would dictate that, post-GST, such terms should either be specifically re-negotiated or be agreed between parties as irrelevant or unenforceable owing to a change in the law. Unfortunately, many customers are pressing hyper-technical contractual interpretations to force the contractor to pass on the same pre-agreed quantum of input credit, failing which, arbitration claims are being raised or threatened against such contractors.
• Disputes on GST on liquidated damages: it has been internationally recognised that no GST can be levied on liquidated damages as they are in the nature of compensation or damages. However, Indian tax authorities (as well as advance ruling authorities) have taken a different stance. This leads to disputes between the contracting parties as to whether GST is leviable and other related issues.

Across the world’s business markets, the legal profession is stuffed to the brim with the cream of corporate minds, the elite of the elites. But, in India, that wasn’t always the case.

Despite being the first chosen career of icons like Mahatma Gandhi and Jawaharlal Nehru, by the latter years of the twentieth century, the legal profession in India had suffered something of a fall from grace.

‘The joke always used to be that you would only become a lawyer if you were the son of a politician, a gangster, or somebody who couldn’t get in anywhere else,’ recalls Navneet Hrishikesan, director of legal services for service provider, Asia Pacific and Japan, at Cisco.

‘Growing up in the late 70s, 80s or 90s, there was a general feeling in India that the quality of legal education was not very good and that people attracted to the law were not of the calibre that you would like.’

That all began to change with the creation of prestigious National Law Schools, providing a five-year legal degree for those who pass a challenging entrance examination, usually the Common Law Admission Test (CLAT).

‘Over time, the law got a reputation for excellence, it became known to be something people would aspire to,’ says Hrishikesan. ‘For people like us, who joined in the early days, it was a bit of a shock to find people actually knew why we were doing law, as opposed to laughing at you.’

The National Law Schools of India University Act 1986, under which the first National Law School – the National Law School of India University (NLSIU) in Bangalore – was founded, stated that among the school’s objects was ‘to make law and legal processes efficient instruments of social development’.

‘The idea was that you would have people trained in the law who would actually go out and then change the country and help people with problems, with justice, human rights and fight for the downtrodden and the sick. Our illustrious director at law school, the late Dr Madhava Menon, called it “social engineering”,’ explains Hrishikesan.

But as the Indian economy opened up in the late 1990s and early 2000s, the wealth of opportunities in the commercial arena began to tempt graduates, who found themselves suddenly in demand. And so the legal profession in India returned to the ranks of the elite.

Beyond the barriers

Social stratification in India is famously such that it is often said that India lives in several centuries at the same time – and the barriers to a legal career for less privileged hopefuls are many.

A legal education of 201,000 rupees a year (for general undergraduate students at NLSIU Bangalore during 2018-2019, for example) is prohibitively high for the average household income of less than 160,000 rupees (figure reported by Centre for Recording Indian Economy in 2015). It is perhaps no surprise that a 2014 survey of first year students at five of the top law schools conducted by Increasing Diversity by Increasing Access (IDIA) found that over 50% came from families earning an average annual income of a million rupees.

But the obstacles stray beyond the financial into the cultural, and even the linguistic, for less privileged aspiring lawyers. Despite not being the majority language in India – which teems with Hindi, Bengali, Marathi, Telugu, Tamil, Gujarati, Urdu and many more tongues – the importance of English for white-collar jobs means that large numbers of students are excluded from law school due to being educated in their vernacular.

An IDIA survey found that only five students from the top five law schools studied in vernacular medium schools, and that more than 70% came from families where both parents spoke fluent English.

‘Those who speak better English find it easier to get into these colleges and also stay in them. They are educated well in English, so they find it very easy to express themselves,’ says Aditi Kamath, executive vice president at IDIA.

And, with the concentration of National Law Schools in cities, children in the myriad of small towns and villages across the country are further faced with transport and accommodation costs, even to access coaching and training for the entrance exam – prerequisites for the rigours of CLAT.

The reality for sizeable sections of the population, not to mention those with disabilities, is that a legal career is not on the radar of students who otherwise have the ability and drive to succeed in one – if only they had the chance.

Planting seeds

IDIA is one organisation which hopes to change all that. Founded in 2010 by legal academic Dr Shamnad Basheer, IDIA works to increase diversity in the Indian legal profession and empower underprivileged communities by creating lawyers from within their ranks.

‘[Basheer] was teaching at one of the national law universities and he realised there was not enough diversity in these schools. He knew of many students who came from towns and villages who wanted to study law but they had no access to a quality legal education. This is when he decided to do something about it,’ explains Kamath.

Comprised of chapters in 21 states, each with 20 to 30 student volunteers from the existing (more typical) law school population and led by a student team leader, IDIA conducts ‘sensitisation’ sessions with high school students, identifying and encouraging those with the potential to get into law school. It then trains them to pass the entrance exam over a period of one or two years and supports successful applicants throughout the process of training to be a lawyer.

‘In India, especially in small towns and villages, people don’t really know what a lawyer is able to do in the real world – the only representation is the lawyers they see on the television and in film. So when we conduct sensitisations for these communities, we make sure we tell them the various things you can do as a lawyer, which is not just argue in a court of law – you can join the public services, you can do policy work, you can have your own NGO and help people in your community. These marginalised groups that our scholars come from have faced a lot of injustice in their lives, so these are things that really push them to be able to say that: “I want to study law to be able to help my community to do better”,’ says Kamath.

‘What we look for more than anything is a passion to do better in your life. The fire in your belly. You can be taught things, but the passion and the drive cannot be taught – that has to come from within.’

After passing an aptitude test based on academic grades and a personal interview, as well as a means test, 50 or so students are enrolled in coaching centres to prepare for the law school entrance tests. IDIA fills out their forms and arranges for the coaching to take place for free, while current student volunteers tutor them in areas like logical reasoning and current affairs. Those needing to travel are given accommodation and expenses for transport, food and lodging. Currently IDIA has 35 trainees getting ready to sit this year’s exam.

The money tree

For those who pass the entrance exam and receive a law school place – like the 64 students currently receiving IDIA sponsorship – IDIA also funds their education. It’s a huge financial undertaking, and the organisation often struggles to find donors. Some leading schools have instituted fee waivers and scholarships for IDIA scholars, and others are in negotiations. Where schemes are not in place, IDIA taps into the legal fraternity in India.

‘At the end of the entrance exam, we know which ones made it through. Once that list is out, we make up their profiles, and we circulate them to our donor group. Usually a lawyer picks one of the scholars and says, “I commit to sponsor this scholar for the next five years of law school.” We have scholars who are being sponsored by a particular law firm or sometimes a corporate group – Citibank sponsors five scholars,’ explains Kamath.

She adds: ‘We still have a few scholars without committed donors though, and we often struggle to match donors with scholars. Donors are also more willing to contribute towards scholars, but not towards organisational expenses like paying salaries, organising events, publicity and outreach, etc.’

‘Every year, we file a biannual progress report to each of our donors, saying, “This is how your scholar is doing right now, these are the grades, these are the internships they were picked up on, these are the seminars they have attended.” At the end of the year, we tell them that “Yes, the scholar was accepted on to the next year and this is how much we need to pay this year.” We write to donors and we attach the entire projected expenses for the scholar for that academic year and they send in the funds.

Holistic support

The legal community also provides practical support to IDIA scholars in the form of mentorship and internships. Mentors are assigned according to the individual needs of scholars, and relationships often continue past law school.

Cisco is one such company that offers backing in this way, assisting with sensitisation sessions, occasional mentorship, and regular internships – although Hrishikesan would personally like to do more.

‘Actually, that’s one of my grouses with the Indian legal education system. In Australia, for example, we have interns with us for up to a year, and the same in Spain. Here in India, course restrictions mean that we are not able to keep them for more than two months or three months at a time, which I think is unfortunate, because to change the legal profession and to change the way we teach our lawyers, I think more practical aspects are what’s required, not more theories from books,’ he says.

‘Particularly in an in-house environment because, unlike a law firm, our deals and our engagements tend to go on for a while, so to be able to actually gain value from it you need to be involved in it for a while. I’m a little frustrated by the fact that the educators in India are not willing to consider different models for their law schools.’

A new world

But IDIA and its professional stakeholders also recognise that there is something even more involved in developing lawyers from underprivileged backgrounds. Although extraordinarily gifted, these students are crossing not simply an academic bar, or even a linguistic one – they are entering into a whole new world.

Yamuna Menon is in her fifth year at NLSIU Bangalore. Academically, she is currently Rank-1 in her batch and was recently selected by the Ministry of Youth Affairs and Sports in India to represent the nation abroad in a youth delegation. But, despite an English-medium education, as an IDIA scholar from a small town in Kerala, fitting in was a process of cultural adjustment.

‘I cannot deny that in the first few months here I actually questioned the decision I made. It was difficult to adapt to this place initially because there were people with a different cultural makeup; their inclinations and interests were different from mine. I was unable to understand things which were happening, like the context, or being part of normal conversations with people for that matter – just like being in a friend circle. They might have a joke and I might not get it,’ she explains.

‘I can never forget my roots and where I come from and what values I hold. But at the same time, I had to make some changes to myself for the professional environment that I am getting into, and I think that’s part of the process. So right now I’m really enjoying it, but adaptation has to take place and, in that journey, I have made some really good friends for the rest of my life.’

‘Mental health is also a part of concern for us, because they are coming to a big city and a big college, where students are well-informed about the world,’ adds Kamath. ‘At that formative age, where you are can be quite intimidating for the scholars sometimes. Some of our scholars do feel a little insecure and get a little bogged down, so we offer help in that scenario also – find them an accredited counsellor and we make sure they feel better.’

Hrishikesan, a classmate of IDIA’s founder Basheer, recalls that the movement could always be characterised as personal.

‘We had a classmate who was very smart and intelligent, but he came from a very humble background and struggled in law school as a result, because ultimately what happens is that the rest are a bunch of these westernised, well-to-do kids who have very little in common with you. It’s difficult enough being a teenager in a new place. On top of it, you are almost forsaken, nobody is really socialising with you, you probably struggle with English a bit, the quality of education is probably high compared to where you have come from and what you have been used to, you don’t read English books at home, and basically you struggle to fit in,’ he explains.

‘I think Basheer took a lot of that to heart, because he looked at it and said, “Ok, it’s not just about helping somebody to get into law school, it’s also about helping them through that process – how do you make sure that people don’t feel left out while they are in college?”’

The future

So, has IDIA set out to create a regiment of socially conscious lawyers, armed to tackle the injustices of society? Not exactly, although it describes its core aim as the creation of ‘community leaders and leading lawyers’. Many current and former students speak of a desire to use their skills to help their communities.

‘There are IDIA scholars who, while they are in law school, have taken on local mafia-type organisations and fought for the rights for villagers around,’ says Hrishikesan.

‘But I think it’s very much left to you, personally speaking, what you would like to do. And I think that’s the right approach. I don’t think there’s an expectation that you have to say no to the commercial sector.’

And the opportunities for graduates are certainly there. Menon harbours ambitions to complete an LLM abroad, perhaps Oxford, Cambridge or Yale.

‘I have had exposure to both [law firm and other organisation] areas. Definitely an aspect of giving back to society and making a difference is something that I can’t do away with but, at the same time, commercial law gives you a lot of opportunities in diverse areas, and I enjoy the same. I believe that there is no need to cut off commercial law from public policy, so I’m trying to balance it out.’

IDIA is up-front about its end-game, which is to ultimately render itself unnecessary – not only through the empowerment of underprivileged communities, but by also creating the circumstances whereby the more typical, privileged students are better equipped to carry the torch themselves.

‘Our idea is to become obsolete after ensuring that law schools – and national law schools particularly – become more diverse, and more people from marginalised and underprivileged communities get up and see that they have this opportunity open for them and that they can do a lot for their own community. We would love it if there was no reason for us to exist!’ says Kamath.

‘We want to produce better lawyers who have more empathy towards other groups, who know that not everyone comes from a privileged background and that people need help sometimes. It is very important to put them in a diverse environment so they can interact with these scholars from other, marginalised groups and find out how, as lawyers, you can work to create a better situation for everyone.’

(If you wish to support IDIA in any manner, write in to info@idialaw.com to know more)

GC: What differentiates Vashi and Vashi from its competitors?

Vivek Vashi (VV): Since we opened in 2017, Vashi and Vashi has expanded to now have two offices in Mumbai, with a total strength of 21 lawyers. The firm is well positioned to handle various complex and high-stakes disputes across India, focusing on quality-driven dispute resolution.

The firm also encourages advocacy. Subject to client preference, the firm’s lawyers are encouraged to argue before courts, tribunals and regulators. Moreover, the firm provides its associates with state-of-the-art infrastructure and resources, which further encourages and facilitates them to service clients with accurate and prompt guidance.

GC: Which practice areas do you see growing over the next 12 months? What is driving these changes?

VV: The firm works on a broad gamut of domestic and international matters, with our primary focus being commercial dispute resolution. Recently, the firm has capitalised on the evolving areas of domestic arbitration and insolvency, where we are focused on streamlining dispute resolution to provide litigants with speedy and effective recourses to justice. Recent amendments to the Arbitration and Conciliation Act, 1996 have brought about a significant increase in the speedy disposal of arbitration proceedings with the introduction of a capped time period for completion of proceedings. This has further resulted in an increase in litigants opting for alternative dispute resolution process as opposed to litigating in court. Similarly, in the most recent amendment to the Insolvency and Bankruptcy Code, 2016, homebuyers have been included in the class of financial creditors which has provided them with a level playing field as against larger developers / builders in a plethora of cases involving delayed construction projects in India. As a result, in the last year alone, our firm has handled substantial matters before the National Company Law Tribunal and Appellate Tribunal.

GC: How is technology changing the way that you interact with your clients and the services you can provide them?

VV: Technology has made lawyers easily accessible to clients in need of urgent and speedy advice. This has made dispute resolution less time consuming and more cost effective for clients. At the same time, evolving technology has largely benefitted the legal profession with myriad sources of news and online databases at their fingertips. This enables lawyers to provide more comprehensive and well-informed strategies and advice to clients. Access to such information through growing technology has also encouraged the legal fraternity to stay abreast of current affairs, growing industries and evolving laws and practices across jurisdictions. Technology has also introduced a competitive element to the profession, ensuring clients receive the highest quality of services at all times from their counsel.

GC: What is the main change you’ve made in the firm that will benefit clients?

VV: The clients’ interests have always been a foremost priority of the firm. As a result, the firm’s practice is not limited merely to dispute resolution; an integral part of the practice is preventative advice which helps clients preserve value. A number of potentially high-value disputes, mainly in relation to in-bound investments, are resolved by early identification and resolution of issues.

The team is also encouraged to work out of their comfort zones in a way that their exposure is not restricted to any one niche practice area, but extends largely to all-round client servicing of their matters and requirements. This not only introduces a higher degree of responsibility in the associates, but also improves their growth, matter management, rapport with clients and, resultantly, secures client confidence in, and loyalty to the firm.

GC: Can you provide a practical example of how you have helped a client add value to their business?

VV: In dispute resolution, as a practice, we provide a cost-effective analysis of most matters to our clients before advising them to pursue litigation as a remedy. This is mainly because the Indian judiciary is overburdened with a considerable backlog of pending matters, and speedy justice is still a pipedream. In many cases, clients are advised and have benefitted from strategic out-of-court resolution of the dispute in its nascent stages, rather than having to incur huge expenses in prolonged and avoidable litigation. Additionally, the firm discourages clients from engaging in a multiplicity of proceedings and / or exhausting resources in pursuing futile litigations merely as a pressure tactic; rather, they are encouraged to consider the merits of their case and have an informed and strategic resolution approach.

Further, it is often the case that larger, financially able litigants solicit advice from multiple law firms on varying aspects of their disputes, resulting in piecemeal strategy with no logical goal in mind. The firm therefore encourages clients to share a holistic view of their matters, so as to enable providing them with comprehensive and strategic advice while keeping their interests in mind and financial resources in check.

Based on such experience, a client has recently engaged the firm to act as its’ legal department, owing to promptitude of turnarounds and quality of work product and advice.

GC: Are clients looking for stability and strategic direction from their law firms, as opposed to purely legal counsel?

VV: It goes without saying that clients require stability and strategic direction from their legal teams; however, clients also need versatility. Using the illustration of the firm, clients do not look to us only to represent and advise them in dispute resolution but also to assist them in related matters. The firm is their first point of call.

India is a predominantly conservative society, with courtship customs that have been passed down for generations. However, times are changing: a combination of improved smartphone technology (and accessibility), affordable internet services and a growing middle class has prompted a cultural shift.

Over the last six years, the Indian matchmaking scene has undergone a complete makeover. Apps such as Tinder, OkCupid, Aisle, TrulyMadly and Woo – to name but a few – are transforming the way a whole generation of Indians are finding love. Although the uptake of this new technology has been slow in rural regions, dating apps in urban cities continue to grow at staggering rates.

As the industry thrives, it falls to the business people and in-house counsel to discover ways to overcome legal obstacles surrounding privacy, marketing and IP, in an effort to strike a balance and find success during a period of cultural change – while operating in an environment still very much reflective of traditional customs.

What’s love got to do with it?

India at its heart remains a country steeped in tradition – notably so, considering the melting pot of cultures and customs present. The practice of arranged marriages dates back centuries, but remains a conventional way to find a partner. But in 2014, almost all at once, mobile dating apps from international and domestic companies flooded the Indian matchmaking market.

‘Over the course of 12 months, we had Tinder, TrulyMadly, Woo and Aisle, amongst others, all come up and showcase what they have,’ says Able Joseph, founder and CEO of membership-based dating app Aisle.

Aisle is just one of a number of Indian-owned-and-operated dating apps vying for market share in an increasingly crowded mobile dating space. Its strict prescreening process underpins a curated community that brings together users of similar interests. Other homegrown apps include TrulyMadly, which matches up locals on the basis of interests and preferences, and Woo, an app that focuses on finding matches for well-educated professionals.

‘There was a sense that times were changing and there was a new need that people were having that nobody was really addressing. That is probably what led to a lot of the applications being launched at the same time,’ says Joseph.

He believes this was the beginning of a cultural shift and, since launching Aisle six years ago, he has seen India become wealthier, better educated and more accepting of western customs:

‘I think a lot has changed in India. When we launched, India was still a super-conservative society and, ever since, we have seen signs of incremental change: a small wave of feminism, the #MeToo movement and Section 377 [of the Indian penal code, which criminalised homosexual acts as “unnatural”] being abolished. There’s no doubt that, slowly, India is liberalising itself. All of these directions that we are moving in, in particular the pace of change, I don’t think that sort of speed is seen in other parts of the world.’

Mumbai local Chinmayi Shinde represents a new generation of educated, career-driven women. Working in pharmaceuticals – specifically contraception – for the last four years, she says she has seen a rise in the number of people, particularly women, using dating apps in major hubs like Mumbai, Delhi, Bangalore and Kolkata.

‘Educated and professional women are more inclined to use such apps, since they are looking for people from a similar background and are open to meeting new people,’ says Shinde.

‘The Metro cities see higher penetration of these apps. Most women move to cities to pursue either education or career. More access to smartphones and cheap internet has helped a lot of people explore the world of internet and apps.’

Swiping right

Despite the fact that dating is still a relatively taboo subject, Indians are swiping right on Tinder more than any other dating service on the market. Heading up in-house legal operations is Jared Sine, chief legal officer and secretary of Tinder’s parent company, Match Group.

‘India for us is a huge opportunity; we see a generation of young members of Indian society who are really exploring who they are, how they date and how they find love,’ he explains.

‘There are some cultural challenges in India because of some of the cultural norms surrounding how relationships and marriages and all those things start – it’s a little bit different than some other areas in the world. So we had to really think about the best way to approach that. In terms of legal, our initial approach was to take the best practices and best standards that we have in other countries, then apply them to what we are doing in India.’

The legal framework governing mobile matchmaking apps in India is very much still evolving. Witnessing this cultural and legal change is veteran matchmaking service, BharatMatrimony. The company has been in the dating market for almost two decades and is the flagship brand of matrimony.com.

‘Matrimony.com is a pioneer in online matchmaking in India, having rolled out their services in 2000. Laws and policies have been dynamically changing ever since. Over the years, our team has built expertise in legal matters related to the matchmaking industry,’ says head of legal and regulatory practice at BharatMatrimony, Ravichandran Subramanian.

‘Dating is a fairly new concept in India, but our team is equipped to deal with any changes in this category.’

Starting as a computer-based service, the company has diversified operations to include a mobile dating app in order to remain competitive.

Laws of attraction

Despite a significant cultural shift surrounding dating ideals in India, local laws still reflect the nation’s conservative roots. A lack of specific regulations requires in-house lawyers to be more strategic when implementing internal polices.

‘There is certainly an element of trying to see where regulation is today and predicting where it’s going to go, then subsequently taking actions to push yourself there,’ explains Sine.

‘That’s a big part of the job of being a chief legal officer, being general counsel. If you’re only focused on today, you’re not looking far enough ahead.’

Joseph draws similarities with the advent of ride-sharing apps when explaining legal reform in the mobile matchmaking industry – something he sees as inevitable: ‘When Uber came to India, there were no laws that restricted it, because all our laws belong to the era where we were all travelling in bullock carts. So there needs to be reform, and it’s very slow, but it is definitely happening and is something we need to be conscious of as a business.’

Despite the current absence of a legal framework specifically regulating dating apps, certain general laws governing computers and the internet do apply. The Information Technology Act, for example, covers issues around wrongful disclosure and misuse of data, including data collected by mobile matchmaking services – data that could be seen as particularly sensitive in India.

The privacy debate

When Sine first joined Match Group in 2016, GDPR had just been adopted by the European Parliament and was still almost two years’ away from enforcement – with many companies yet to firm up their data privacy policies. Fast-forward to 2019 and privacy protection is a contentious issue dominating news headlines the world around. It is an issue that has also grabbed the attention of lawmakers in India.

‘We have always taken privacy seriously. These laws and regulations coming into effect make people think about things a little differently, and we said we should build a global privacy programme that needs to meet all of the applicable GDPR standards. So if you’re a user in the US, or if you’re a user in the EU, if you’re a user in India, if you’re a user in Japan, you have the same protections and the same rights, the same access to data, the same rights to have your data deleted as anyone in another country where the laws may be more restricted,’ outlines Sine.

‘Instead of taking a country-by-country approach, we took a global approach, and it has actually paid off. We’ve now got a programme across all of our companies and all of our brands that brings everybody to the same level.’

Joseph believes it is only a matter of time before dating app consumers begin to push for better privacy protections. On a local level, concerns around privacy are already beginning to develop among the middle and upper classes.

‘When you look at a normal consumer using mobile apps in India, be they Uber or food tech, their concern is not really privacy because they have to deal with their daily sort of things,’ he says.

‘But there is a certain community of affluent Indians who are aware of international laws and who are aware of the privacy issues, in particular with the things that can go wrong. For those people in particular, this is an issue that does matter.’

Marketing matchmaking

One of the major legal issues surrounding the growth of dating apps in India has been marketing. In-house lawyers often have to work closely with marketing managers to ensure campaigns meet strict legal guidelines – not uncommon by international standards, but with its own quirks when considering the culture and tradition apparent in India.

‘In a lot of countries, Tinder just grew virally. In India, there was some viral buzz, but not on the same level we saw in European countries or in the US,’ says Sine.

‘We built a local team there that really started focusing on creative marketing around how we message the story of Tinder. Legal plays a key role in marketing – we have to find a way to make sure our IP is protected and that our marketing messages are accurate.’

Marketing Tinder across television, radio and online platforms was key to the app’s success in India. From a legal perspective, advertising laws in India are not specifically problematic – particularly considering the number of jurisdictions in which Tinder is used. But there’s more to finding success than following the letter of the law, says Sine.

‘There wasn’t anything specific in Indian law that made it difficult or otherwise obstructed our ability to be able to market. There are some countries where if you are an online dating platform it is very difficult to market on television and, fortunately, India is not one of those countries,’ he says.

‘Oftentimes people use laws to try and apply cultural norms that maybe need to be changed. That forced us to think about how we were going to structure these campaigns: what channels are we going to be working with? Are they going to be influencers or are they going to be regular PR agencies? How are we going to contract those companies to make sure we are getting what we need and they’re getting what they need?’

To have and to hold

With the explosion of dating apps across India, protecting intellectual property has come to the forefront of concerns for in-house counsel. Dating service veteran BharatMatrimony has seen the focus shift within its legal team as a result of increased market competition.

‘Over the years, apart from regular legal functions, the legal team has evolved to focus on IP, since it throws up new challenges all the time,’ says Subramanian.

‘We fiercely protect our IP and quickly act upon any violation of our trademarks and copyrights. We have been very successful in doing that and have obtained favourable decisions in many cases at the courts. The low online entry costs, high legal expenses and difficulty in scanning and detecting violations in the vast online space often lead to big- and small-time competitors trying to misuse our trademarks and confuse users by diverting traffic that legitimately belongs to us. Our team works with other teams internally to detect violations and pursue them legally.’

Global conglomerate Match Group has also implemented IP protection practices across its entire business.

‘We deal with the lawsuits, we file for tax purposes, we protect our IP – like the one we filed against Bumble, to ones where we are not the asserting party. Some people look at us because we are a big company, we have deep pockets,’ says Sine.

‘[In India] there were the typical legal hurdles you had to get over, making sure our IP is protected and that we have those elements taken care of and our messages are consistent with the legal requirements on truth and accuracy and all those things.’

As long as we both shall live

Moving forward, as the regulatory framework surrounding dating apps develops in India, privacy remains a forefront issue for legislators and regulators.

‘They want to make sure that people know where their data is being processed, they know what rights they have in relation to who is getting access to their data and ownership over that data,’ says Sine.

‘There are a whole host of new proposals that are being discussed at the legislative level in India that we need to be aware of as a business.’

In particular, there is a push from lawmakers for data collected in India to remain in India. At present, there are no regulations in India that state where and how data can be collected, stored or processed. But regulators in India are currently working towards drafting a comprehensive piece of legislation for data privacy, which could have a major impact for international apps such as Match Group’s Tinder, where all data is stored and processed in the US.

‘We’re aware that those kind of discussions are happening, but we will wait to see how the laws turn out. We are engaged, we are having conversations through our trade associations to make sure our perspective is shared, as well as other perspectives of some of the platforms that are out there,’ says Sine.

‘Our approach is to partner with regulators to try and find common ground in order to help expand not only our footprint as a business, but also the ability for people to have more choice.’

It seems that traditional approaches to dating in India are being superceded by that empowerment of individual choice. As technology continues to improve, mobile matchmaking services will continue to thrive – but how regulators and lawmakers balance a bright future with societal norms will be a delicate decision.

LuxLeaks, Cambridge Analytica and the Panama Papers are just a few examples of recent scandals propelled to the public’s attention by whistleblowers. Workers are increasingly speaking up against corruption, fraud, sexual harassment and harm and, in the process, preventing scandals from progressing and even saving lives. Yet some have encountered retaliation or have simply been ignored.

But this is set to change.

Piecemeal action by governments over recent years had already started to strengthen whistleblower (also known as ‘protected disclosure’) laws. However, the European Union’s agreement in April 2019 to implement comprehensive new whistleblowing legislation across its 28 member states marks a significant step change – one which will have practical workplace consequences beyond Europe.

In particular, those multinationals applying a one-size-fits-all global whistleblowing policy will need to decide whether to apply the EU’s higher standards beyond Europe. Considerations will include issues such as whether to make reporting channels available to contractors and suppliers, broadly defining protected disclosures, as well as requiring investigation and the provision of feedback to disclosers within three months.

In this age of the whistleblower, employers failing to provide easy access to confidential reporting mechanisms or handling disclosures and disclosers inappropriately risk problems escalating, reputational damage and, increasingly, significant sanctions for breaching whistleblowing regulation.

Recent legislative changes to whistleblowing protections

In 2018, the EU listed ten member states with comprehensive whistleblower legislation in place (Ireland, France, Hungary, Italy, Lithuania, Malta, the Netherlands, Sweden, Slovakia and the UK), much of which has been introduced or strengthened over the previous five years (see table on p51).

Other countries, including non-EU states, have announced new whistleblowing legislation or are in the process of implementing change. For example, Switzerland, Poland, Slovakia, Norway, Qatar, the United Arab Emirates and Australia are all strengthening existing regulation or seeking to introduce new rules on protected disclosures by some sector-specific employees or more broadly. In Asia, Japan’s Consumer Affairs Agency is considering amendments that would see the effectiveness of Japan’s current whistleblower protection laws improve, as well as increase in scope. The changes are expected to go through the legislature in late 2019. Hong Kong has seen increased calls for general whistleblowing legislation following several corporate scandals, and it is only a matter of time before the government responds.

The United States has a long-standing, complex system of whistleblower legislation that includes federal statutes as well as certain state law regimes. Recently, there has been an increase in whistleblowing activity which, is likely to continue. The US Securities and Exchange Commission (SEC) reported that it awarded more dollars to whistleblowers in 2018 than in all prior years combined. The SEC also has a long-standing policy challenging confidentiality provisions in employee agreements that have the potential to chill whistleblowing activity – a practice that has impacted the drafting of employee-related agreements even for companies not subject to SEC oversight. In a recent development, the US Supreme Court unanimously extended the time for bringing claims in certain cases under the False Claims Act.

The EU Whistleblowing Directive

In April 2019, the EU Parliament agreed to a new directive to protect workplace whistleblowers, revealing breaches of EU law in a wide range of areas including public procurement, financial services, product safety, and consumer and data protection. The law must be approved by EU ministers, after which member states will have two years to make their national rules compliant.

EU states with limited whistleblowing protections currently, such as Germany, Spain and Austria, will be required to introduce wholesale change by 2021. Many others, including Ireland (regarded as having comprehensive rules already in place), will also have to act. For example, widening the scope of protection to volunteers, suppliers and contractors, and introducing a requirement on employers to investigate and provide follow-up reports to disclosers within set time scales.

Practical implications – beyond Europe

Workplace whistleblowers play a significant role in uncovering wrongdoing and alerting employers. Despite this, managers can be wary of whistleblowing channels, fearing malicious reporting.

However, these concerns should not cloud the case for instituting a robust whistleblowing system and embedding a culture of speaking up in the organisation’s DNA. Without this, the fear of suffering retaliation will have a chilling effect on whistleblowers, depriving employers of the opportunity to investigate and address issues away from the glare of publicity and the attention of both government bodies and the courts. A 2017 EU survey found that 85% of respondents would rarely report wrongdoing, fearing negative repercussions.

The changing legal landscape, spearheaded by the EU Directive, requires employers to review existing whistleblowing procedures for compliance. At the same time, employers should take this opportunity to assess their own whistleblowing culture. Like with GDPR, which forced businesses to take an honest look at their data handling and protection policies, this latest EU legislation will prompt many to review key elements of their whistleblowing systems – including leadership, commitment and accountability.

After all, good governance should encourage workers to speak up internally – for the sake of the company’s health, longevity and financial wellbeing.