Doing the Job

Much is spoken in diversity and inclusion circles about the importance of ‘tone at the top’, and several of our participating senior in-house counsel shared their lived experience of the impact CEOs can have when they not only support, but advocate, for change.


‘We have found that when the CEO and the leadership team is consistently visible and vocal on D&I issues – where they’re showing up and speaking up at diversity events, including it in their employee town halls and talking about it whenever they can – it’s one of the engines that propels D&I forward within the company,’ says Wesley Bizzell, senior assistant GC at Altria Client Services Inc.


The in-house legal team may not necessarily be the first port of call for those looking to promote a D&I agenda, but most of the counsel we spoke to felt that inclusion and the general counsel’s office can be natural bedfellows. 


In fact, Hugh Welsh, general counsel at DSM North America, believes that in-house departments can turn any cognitive dissonance arising from a lawyer raising issues to their advantage in furthering diversity and inclusion. 


‘Typically, law departments are very risk averse. You may have law departments that are very actively involved in sexual harassment training, hostile workplace training and things like that, but from a corporate defensive position – essentially to afford the company an affirmative defense,’ he explains.


‘At a superficial level, there’s an appearance of a conflict but I think that when you have lawyers who are willing to speak emotionally and meaningfully about the importance of these issues, you move beyond compliance. Compliance and new rules and new processes are in many respects the worst way to drive that change. To make meaningful change, you have to change the culture and so to have the lawyers out in front on many of these issues goes a long way to changing the culture, because what they are about to say is so unexpected.’


In his own organisation, Welsh has played a role in bringing certain inclusion issues into the corporate context.


‘To make meaningful change, you have to change the culture.’

‘What I had experienced was that conversations around those very emotional but very topical issues stopped the moment you crossed the threshold of the corporate door. So we held a meeting at our New Jersey headquarters called an “authentic leadership summit”, specifically focused on creating a safe environment to have conversations in a corporation around #MeToo, Time’s Up and Black Lives Matter, in partnership with the Tri-State Diversity Council, and I can say it was an immensely provocative, deeply emotional and very effective meeting. The panel answered one question and then three hours later we were done – because of the audience participation.’”


The notion of corporate culture in itself can be inherently nebulous, but nearly all of those we spoke to as part of the research for this report felt that in-house legal teams are well positioned to be agents for change inside their respective businesses. 


‘Legal teams are in a position of strength to lead by example, because people do listen and I think it can have significant weight – so using that for good, and to express strong corporate values is really worthwhile,’ says Kate Karas, formerly senior associate general counsel at Lending Club.


One example of how legal departments can be well placed to lead on societal diversity can be seen at Hewlett Packard Enterprise’s legal team, which worked with the Girl Scouts of the USA to create a cybersecurity badge, to encourage young girls’ interest in a cybersecurity career. 


But the variety of ideas and activities showcased in the pages of this report points to there being no blueprint for a successful initiative – instead, what is key is an intentional and sustained commitment to furthering inclusion and diversity.


‘I have a sign that hangs above my computer that asks, “What good shall I do this day?” That’s really how I look at it: what can I do to advance the issue in both big and small ways on a daily basis,’ says Bizzell.


While a positive – albeit broad – North Star, Bizzell does however highlight some essential elements for inclusion, particularly for LGBTQ individuals: namely inclusive policies that clearly protect all diverse individuals – for example, clear anti-discrimination policies for sexual orientation, gender identity and gender expression – parity in benefits, and an expanded talent pool.


‘[Diversity and inclusion] is a complex issue and we need to address it like a complex issue, in a multi-dimensional way, throughout the career trajectory of an attorney from the law school and recruiting stage to the executive committee decisions,’ he says. 


The pipeline


The earlier inclusion starts the better, and school can also be a powerful tool to recruit members of diverse communities into the legal profession. Connie Brenton recalls her ‘life-changing’ visit to Southern University Law Center, where students are recruited for ‘grit and gratitude’:


‘You don’t walk into a room for an hour-long training and walk out unbiased.’

‘Many of them have had jobs for a long period of time, so they have a sense of what it is to work, alongside a passion for what they are studying and why they are studying. There’s a true desire to make a real difference in their communities. There’s an aspiration to learn and be exposed to a multitude of experiences so that they can bring that back and uplift their communities,’ she says.


The experience sparked the ‘Community of Legal Interns’ – a scheme to provide free online training to interns across the globe, thereby circumventing many issues that diverse students face when accessing high-quality training and opportunities, and investing in the future profession.


‘There’s opportunity in terms of creating the next generation of attorneys who have a fundamental connection with one another and a focus on diversity and inclusion from before they graduate. It becomes part of their DNA prior to even completing their legal training – so who knows what that will look like in another ten years?’ she reflects.


As diverse students and interns complete their education and enter the world of recruitment and employment, opportunities abound for law firms and legal departments to continue leveling the playing field in term of inclusion and diversity. 


To combat the universal human temptation to recruit and promote in our own image, Diversity Lab created the Mansfield Rule, inspired by the NFL’s Rooney Rule, which mandates that 30% of internal and external candidates considered by law firms for senior roles must be diverse. The Mansfield Rule for law firms has proved popular and effective, with 100 firms piloting its newest iteration and recently published results showing notable increases in the diversity of candidate populations and the composition of leadership ranks. Diversity Lab recently launched the Mansfield Rule: Legal Department Edition with 20 legal departments that are applying the Rule’s framework to their recruitment, retention and promotion processes, including hiring outside counsel.


‘We are very focused on the Mansfield Rule, which requires organizations to commit to considering diverse candidates in recruiting, developing and promoting people into leadership,’ explains James Chosy, general counsel at U.S. Bank.


‘Our in-house version just rolled out, and we were one of the first companies to agree and sign on – we’re very proud to be on the leading edge of that. We’ve since taken things a step further, and have actually asked about 40 of our leading law firms to formally commit to the Mansfield Rule.’


Conscious of the unconscious


The major thread in D&I approaches is that of unconscious bias training, in recognition of the fact that everyone has biases that affect their decision-making, often to the detriment of a diverse and inclusive working environment. But is it effective?


Not in isolation, says Caren Ulrich Stacy, founder and CEO of Diversity Lab.


‘You don’t walk into a room for an hour-long training and walk out unbiased. If it took 40 years to create the biases that you hold, there’s no chance that in one hour, or two hours or even five hours, you’re going to eliminate or even minimize those biases,’ she says.


‘Research shows that when you go to unconscious bias training, most people see something they could do different or better, they see that there is bias, but they think it’s much worse in everybody else than them. They leave and they say, “Wow, my colleagues are really biased, I have this little thing I have to work on but everybody in this group is really biased!”’ 


Private Practice Perspective: From Bystanders to Upstanders: Standing Together For Inclusion


What does it really mean to cultivate an inclusive culture? How do we engage more of our employees in our diversity efforts? Like many organizations, these are questions that Weil’s diversity committee grapples with to accelerate change.


In 2015, I embarked on a series of conversations with a cross section of internal constituencies as well as with external experts and diversity professionals at other organizations. What I heard was a desire for a broader range of colleagues to take an active role in diversity efforts and to speak up when issues arise. When I spoke to colleagues about engaging in inclusion, they expressed a desire to get involved but were fearful of saying or doing the wrong thing. 


Upstander@Weil is designed to inspire and empower all attorneys and staff globally to stand up for inclusion in the workplace, community and at home. Upstanders are allies, supporters, and advocates for people and communities who share a different background or identity than their own. To prompt bystanders to take action, tools and training are essential.


Weil promotes an Upstander culture with an internally created Upstander action guide detailing over 50 behaviors and an internet page with over 40 resources. The action guide includes behaviors that our affinity group members want from their colleagues. The effort was officially launched during Weil’s Global Diversity Month in November 2015. The kick-off event was video conferenced globally featuring a keynote address by executive partner Barry Wolf, a cross-office panel of internal ‘Upstanders’, and the debut of an internally produced video highlighting attorneys and staff of all levels. 


The centerpiece of our rollout was the 2016 annual mandatory diversity training requirement, utilizing interactive diversity theater with professional actors and guided group discussions to bring the Upstander behaviors to life. 


Following feedback that being an Upstander for racial diversity is particularly challenging, we devoted the 2017 training to ‘Talking Boldly About Race: Being an Upstander in a Time of Cultural Unrest’, facilitated by Verna Myers. 


While the Upstander initiative was developed entirely in-house, it is replicable in all kinds of organizations, large and small, across sectors. During the internal launch, we engaged clients to help motivate the firm to embrace the universal power of allyship, and later we shared our framework with clients to spread the Upstander message and tools. 


Weil’s leaders lead by example. Each affinity group has a management committee sponsor who is not a demographic member of that group. 


Four years after the launch of Upstanders@Weil, the term is in the Oxford English Dictionary, clients embrace the concept, and nearly 90 Weil attorneys and staff received Upstander@Weil awards. Everyone plays a role in cultivating an inclusive culture and all organizations can benefit from empowering all to be Upstanders.Meredith MooreGlobal Director of DiversityWeil, Gotshal & Manges LLP


Upstander Definitions


Oxford English Dictionary: A person who speaks or acts in support of an individual or cause, particularly someone who intervenes on behalf of a person being attacked or bullied. 


Facing History and Ourselves: An Upstander embraces the challenge to speak out, do the right thing, and make decisions that help create positive change in our world. They make a conscious choice to step in instead of stand by.

Upstander Actions


Listen up: 


  • Learn, read, ask questions and discuss to step into the shoes of someone of a different demographic group. 

  • Inclusion examples: request dietary preferences/restrictions; use gender neutral language when inviting guests; ask about holidays for scheduling; ask for preferred pronouns.


Show up: 


  • Attend, actively participate, and contribute to diversity programs. 

  • Inclusion examples: attend events where you’ll be in the demographic minority; join a board for a cause unrelated to your background; bring your colleagues who might not feel comfortable to diversity programs. 


Talk up: 


  • Lift up careers by sponsoring, opening doors, making connections and finding opportunities for colleagues of different backgrounds.

  • Inclusion examples: ensure diversity in panels and guest lists; equitably distribute office housework; mentor and sponsor across difference.


l

Speak up: 


  • Identify and interrupt bias and stereotyping, even if unconscious or subtle, whether in the moment or shortly after the fact.

  • Inclusion examples: highlight when a woman or person of color’s idea is overlooked and someone else gets credit; say something when you suspect that unconscious bias may impact how a person is evaluated. 


When undertaking any form of diversity training, in particular with unconscious bias, a key consideration is to ensure that individuals aren’t made to feel isolated or blamed. 


‘Sometimes bias training portrays that, which is problematic, because it makes them feel alienated as opposed to making them feel like allies,’ says Ulrich Stacy.


‘If you reinforce training with rewards and some of those things we know change behaviors, then it can have an effect, but not many law firms and legal departments tend to take that next step.’


The leading GCs we spoke to were aware that unconscious bias comes into play not just in the recruitment process, but in the day-to-day decisions taken by leaders that impact on the career progression of diverse individuals. To combat this, for example, Verona Dorch, chief legal officer at Peabody Energy, is intentional about nurturing the career progression of her team-members, even if they have not yet considered it themselves.


‘There are unconscious biases that can come into play, like the halo effect – someone looks like you, so you may be more willing to sponsor them or almost overlook deficiencies. It’s important to me that everybody is given that level of sponsorship and that I’m there advocating for people who others may not be advocating for,’ she says.


‘I want to make sure people are giving folks that may not fit their definition of someone that should be developed that opportunity too. It really is, I think, taking that broader chance on people, including those who may look and think different from you, but do deserve a seat at the table.’


The supply chain


As well as forming key partners, law firms are frequently a training ground for future in-house attorneys. In-house teams have for some time now been leading the charge in driving inclusion and diversity across the profession, enriching the profession with some creditable results. Law firms are often subject to much finger wagging by in-house teams, but the best supplier diversity schemes attempt to get under the skin when understanding a law firm’s culture, rather than simply relying on a set of numbers.


‘I want to talk to some of the female or minority associates and partners. I’m very keenly interested in what happens when fifth- or sixth-year female associates decide to have children. What does the firm do to bridge that time so that talented associate is not set back on the partnership track? I find that, more often than not, they do nothing, which to me is an indication of what the culture in the organization might be,’ says Welsh.


‘I would love to see them have a senior partner at the firm assigned to them as a sponsor so that they have the sense of security that there is a senior partner at the firm who’s looking out for them, and they’re not going to get sidetracked or derailed, or put in a position where they feel like they have to opt out because they don’t have the protection that maybe a male lawyer in the law department would feel they have. Somebody to share with them what’s going on day to day, even if they can’t be there every day, so they continue to feel connected both emotionally as well as factually as to what’s going on at the firm, and that they continue to get choice assignments and choice client contact.’


Chris Young, general counsel at Ironclad, Inc, takes a similarly thoughtful and long-term approach when considering the external counsel he uses for staffing matters.


‘Externally, there are times when I make an express request to outside counsel for a diverse attorney not only to be assigned to the matter, but also to take on substantive work and to be afforded the opportunity to assume significant responsibility, if not a leadership role,’ he says.


‘I’m there advocating for people who others may not be advocating for.’

‘I also make sure that we maintain a roster of diverse outside counsel. I participate in minority bar associations and, having been part of a community of diverse lawyers for quite some time, I have been fortunate enough to build long-term relationships with tremendous lawyers who also happen to be lawyers of color. When there’s an opportunity to hire those lawyers, that’s who I go to first, not only because they’re diverse, but because I can trust them, and I know the work they do is of the highest quality.’


At CBS Corporation, data tracking is taken to a particularly granular level, providing nuanced detail which can then be used to understand and drive impact. Naomi Waltman, associate GC for litigation, explains the team’s system of tracking the diversity of law firms through billing software, ensuring a detailed understanding of who is working on CBS matters and, by extension, tracking the team’s own contribution to the diversity space. 


‘I do my best to ensure that all our matters for which we retain outside counsel are staffed with diverse teams, and that our outside counsel guidelines reflect our commitment to diversity and our expectations that law firms assign diverse teams to our matters,’ she explains.


‘We’ve instituted a system where we can track the diversity of law firm timekeepers working on each of our matters through our billing software. That allows us to hold firms accountable and also to measure how we are doing as a department on diversity. In addition, our outside counsel guidelines state that we expect firms to staff our matters with diverse teams. When law firms come in for a pitch, we reiterate that expectation.’


Measuring progress


Many of the in-house counsel we spoke to for this report underlined the importance of data in tracking diversity performance – particularly with regard to the selection of outside counsel – but some were keen to point out that metrics can say little about inclusion and the career progress of individuals, and must be carefully interpreted to take account of the incremental nature of change. 


‘One of the things I always fear is if you get too strict on measures, it takes such a long time to make change that I’m afraid to throw out the baby with the bath water, as they say. We’re so worried about showing improvement that if we don’t, we’re going to fear that it’s not working and stop tracking the diversity data and focusing on the metrics,’ says Carrie Hightman, chief legal officer, NiSource Inc.


‘But, in fact, it takes time to make change and so a lot of the work that we focus on at the company is how do you know that you’re making progress and making sure that measures are not just backwards-looking but forwards-looking. The last thing you want to do is presume you’ve failed and then stop the program when, in fact, change is very gradual.’ 


Many agreed on the importance of some measure of qualitative assessment to complement the quantitative, especially when investigating the complexities of building an inclusive environment among both external and internal colleagues.


‘I think most law firms have the best intentions when it comes to diversity and they generally do a good job attracting diverse classes of summer associates and new lawyers. That is not translating to more diversity at senior ranks and in partnerships, however. I think the problem is a lack of mindfulness and realizing that extra effort and attention is needed to make sure that diverse talent is getting the opportunities that will lead to promotion,’ explains Kimberley Harris, general counsel of NBCUniversal.


‘Law firms need to identify their talented mid-tier diverse associates and put thoughtful effort behind their development. It’s not enough simply to bring them into the building – you have to focus on making sure that they continue to develop and advance.’

Firm Focus: Vashi and Vashi

vashi-vashi

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.

All is fair in love and law

love-and-law

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.’

The legal framework governing mobile matchmaking apps in India is very much still evolving.

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.

Marketing Tinder across television, radio and online platforms was key to the app’s success in India.

‘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.

Horizons: Global trends in employment law Edition 3: Changing the tune – the age of the whistleblower?

change-the-tune

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.

Eu directive table

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).

Summary of the Directive

Approved in April 2019, the new EU-wide standards to whistleblowing were nearly unanimously agreed by MEPs – implementing significant new standards to be upheld and processes to be instituted. For reporting certain breaches of EU law, the directive broadly requires employers (except those in the private sector with fewer than 50 employees although exceptions apply) to:

  • Make available secure and confidential channels for reporting internally and provide information on how/when to report externally to public bodies/regulators. Internal channels may be operated by a third party.
  • Establish procedures for investigating and following up on internal reports within set timescales, including designating an individual or department to diligently perform this role.
  • Decide whether to make internal channels available not just to employees but also to others acquiring whistleblowing information in a work-related context, including the self-employed and those working for contractors, suppliers and subcontractors.
  • Protect whistleblowers against dismissal, demotion and other forms of retaliation if disclosers had reasonable grounds to believe the information was true at the time of reporting, it fell within the scope of the directive and they complied with its reporting channels.

The directive sets down principles indicating when internal, external or public disclosure is appropriate. For example, public disclosures to the media are protected if, amongst other grounds, the whistleblower has reasonable grounds to believe there is an imminent danger for the public interest or other channels have failed. In the event of retaliation, member states must provide effective sanctions, including interim relief, and whistleblowers are immune from legal proceedings in certain circumstances. No waiver of rights and remedies in the directive are permitted.

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.

Diane Gilhooley’s Top TipsDiane Gilhooley

  1. Does your whistleblowing policy provide accessible and confidential reporting channels that are highly visible and understandable?
  2. Will your policy adhere to the new EU standards globally, or will it reflect local law?
  3. Will it be extended to third parties such as those working for suppliers?
  4. Will financial incentives be offered to whistleblowers, and how is anonymous reporting handled?
  5. Check whether the policy, and any proposed changes, comply with data protection, works council consultation and other legal requirements.
  6. Do you have systems for the diligent and timely investigation of reports and for responding to disclosers?
  7. How are disclosers protected against all forms of retaliation?
  8. Are managers trained in dealing with reports and supporting disclosers?
  9. Is whistleblowing actively encouraged – do workers believe that they can and should disclose their concerns, and will be supported to do so?
  10. How transparent is your whistleblowing policy – where possible, are outcomes shared with workers?

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.

Firm Focus: Royzz & Co

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GC: What differentiates Royzz & Co from its competitors?

Mahua Roy Chowdhury (MRC): Our firm represents the next generation of technology-oriented law firms, wherein our lawyers are either engineers or scientists. In view of this, our team goes beyond the books and is able to provide advice that is in line with the rapid pace of change in technology.

We have designed and built our own portfolio management and tracking software based on the amalgamation of our technical knowledge and wide industry experience. We provide use of these proprietary systems as a value-added service to our clients.

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

MRC: The market dynamics have changed with the advent of technology. Disputes related to ownership of technology, violation of digital licences and infringements in cyberspace are on the rise. We are seeing an array of new legal issues arising that were not foreseen in the past. We are also anticipating a rise in infrastructure-related transactions.

Being at the forefront of innovation, we are helping institutes and scientists to monetise their innovation by introducing another vertical to our practice area, which is the IP valuation and monetisation service.

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

MRC: We have expanded our practice areas to provide a full spectrum of legal services to our clients. We have inducted partners and associates in practice areas such as general corporate, India entry, tax, real estate and litigation.

We have opened offices in Delhi and a second office in Mumbai with complete litigation support, too.

In addition, we have changed our process of billing and now use either lump-sum payments or commit not to exceed fees calculated on the basis of our billable hours as a norm. The exception being only in long-haul contentious disputes, wherein we rely on billable hours. This assists our clients to budget and allocate resources accordingly.

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

MRC: Since inception, our firm has been a technology-oriented law firm. We are striving towards becoming a paperless office, too.

We provide web-based access to our clients to review their portfolio and receive additional notifications for deadlines. We also subscribe to several software solutions that assist us in effectively managing our client database, deadline tracking and monitoring the various portfolios.

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

MRC: Technology being our forte, we often cross-refer our clients and their products. We also update our clients and introduce them to the latest technology, and advise them on integrating the same to augment their reach or improve their products and services.

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

MRC: The role of law firms has gone through a metamorphosis. Clients are asking questions that are no longer limited to the legal aspect, but instead have widened to include business decisions as well. Law firms have to don the legal as well as the business hat to provide the kind of advice that clients expect from us.

GC: What is the firm’s primary focus over the next three years?

MRC: In the next three years, we intend to focus and solidify our position in the new practice areas introduced. We are focusing on empowering our team to become holistic lawyers who can provide out-of-the-box advice to complex situations.

Reaping what you sow

reaping-startup

2018 was a good year for Indian entrepreneurs. The world’s third-largest start-up ecosystem saw its base expand by 12-15% and investor funding grow by 108% year-on-year, as well as a rise in late-stage funding – sufficient to give a leg-up to unicorn status for eight companies, according to a 2018 report by NASSCOM and Zinnov Management Consulting, Indian Tech Start-Up Ecosystem: Approaching Escape Velocity.

But just a few years ago, things weren’t quite so rosy. Despite the dizzying success of e-commerce wunderkind Flipkart (sold last year to Walmart for USD$16bn) and its ilk, investment plummeted from $1427m to $583m between Q1 and Q2 2016 (according to CB Insights, October 2016) and businesses started to go under.

‘Investors were investing like anything. The majority of the time it was e-commerce and consumer services, and everyone was putting in money. The field became saturated, start-ups were giving big discounts to gain customers. And that model doesn’t work, because you are not creating customer loyalty,’ says Saugat Dutta, project manager at EY heading the Startup Himachal PMU.

‘The success parameter of a start-up was judged by how much investment it had secured, so it was a case of: “That start-up is very successful.” “Why?” “Because they secured millions of dollars in “investment”. Now, when I read a start-up story, the story is “Who’s that start-up which generated this much revenue within these many months?” – not the amount of the investment they raised.’

‘With any kind of herd mentality, you often will see a lot of people putting in money speculatively,’ adds Dibyojyoti Mainak, consultant GC of Mobile Premier League, a mobile gaming app start-up.

‘You started seeing cases where investments were made that were often valuing companies at far more than what they should have been valued at, even investing in companies without really seeing a business behind it. It became less about the product and more about a certain template of success within the market. So, if one content company has raised money, then you would expect every other content company to also raise money,’ he explains.

But rather than complete collapse, what followed was a process of maturation – building on established tech talent within the country, but with a renewed focus for strategy, sustainability and a global business plan to support those eye-catching ideas.

Laying the groundwork

Significantly, the government’s endorsement of the sector has mushroomed, evidenced by the creation of Startup India in January 2016. The flagship initiative was established to encourage start-ups that meet its criteria (and register) with benefits such as financial help with patent filing and fast-tracked examination, self-certification under certain labour and employment laws, and an income tax exemption for three years. In addition, Startup India has formed a 10,000 crore fund of funds to make downstream investments in venture capital and investment vehicles that target start-ups, promoted the creation of incubation centres and labs to foster both innovation and R&D in education and industry, as well as relaxed public procurement norms which previously excluded start-ups.

‘India has been an agrarian economy for decades. The new government [formed by Prime Minister Narendra Modi in 2014] wanted to bring about a shift to a knowledge-based economy. We have been exporting engineers and doctors abroad, so instead the goal was to see if we could use the skills and knowledge base here in India to achieve economic prosperity,’ explains Dutta, who works with state governments on initiatives to support and develop start-up ecosystems.

In order to drive a culture of nurturing the innovation ecosystem to the grassroots level, central government devised a framework to rank states on their efforts to support innovation along several verticals, intended to create competition and encourage each state to take ownership of its start-up environment.

The central government’s push for ‘Digital India’ (which promotes the use of innovative technology in government) and ‘Make in India’ has led to some cross-pollination with state government initiatives. For example, the government of Andhra Pradesh, has started to put all land records on a secure, blockchain-based platform, and is also using drone-based solutions for state security and checking municipal infrastructural compliance. In addition, it utilises Internet of Things solutions for inspecting the cleanliness of government-supported school toilets. Such initiatives have begun to create opportunities for start-ups to cater to technology requirements, facilitated by relaxed public procurement rules allowing state governments to order directly from technology-focused start-ups. The companies gain user validation and also secure a state government contract, boosting their credibility with private sector customers.

And access to innovation is expanding beyond the usual hubs. The city of Bangalore is synonymous with tech-based innovation – it is home to 25% of India’s tech start-ups, with Delhi and the National Capital Region (NCR), and Mumbai housing 21% and 14% respectively, according to the NASSCOM/Zinnov report. But the same report notes that an increasing presence of tech incubators, tech parks and affordable work spaces is allowing tech start-up hubs to flourish in cities such as Hyderabad, Chennai, Pune and Kolkata, with additional growth in tier two cities such as Jaipur and Chandigarh.

Tech parks and affordable work spaces is allowing tech start-up hubs to flourish in cities.

But, success has not been unqualified, according to some.

‘For you to be a start-up, you needed to get a certification of sorts from, inter alia, one of the recognised tech institutes in the country, or have a registered patent in your name already,’ says Mainak.

‘That essentially cuts out 90% of everybody in India, because we are not a very patent-savvy nation, not to mention [the fact that] the patent regime in India is quite restrictive. You can’t expect a 23-year-old or a 25-year-old who is still in college, mostly on parental money, to have the financial wherewithal, or even the knowledge, to do something like register – it’s a very complicated process. That was a specific problem with the start-up definition – but that’s something the government’s already worked on solving. New notifications brought in in February 2019 relaxed many of these rules, and now require, among others, just a write-up justifying how you are innovative/will create jobs etc,’ he says.

‘Secondly, the Indian bureaucracy is a behemoth which answers to multiple interests/powers. It is not centralised enough for the central government to simply push policy and expect that all departments will follow. I’ll give you one classic example: the government has said that labour and employment compliances are cumbersome, which they are. So they said, “Ok, everybody until about three or five years in, you can self-certify.” Very good. Except then, they brought in a new tax law. Tax is covered by one department and employment is covered by a different department, and what that means is that taxation doesn’t follow that logic, so overall, the number of compliances you have to do has not reduced sizeably. If one goes down, another comes up – it’s a little bit like fighting like a hydra.’

Clearing the way

To exist in this space means grappling with a very particular set of challenges.

At the intersection between India as a jurisdiction and start-ups as an ecosystem is the issue of safeguarding ideas: in India, the process for obtaining patents has been historically sluggish, while time is of the essence for a burgeoning start-up economy working to reach its full potential. Recognising this, Startup India has introduced expedited patent review and rebates on filing fees.

‘India’s IP system has to catch up, people are not getting patents granted for five years in some instances. They file and wait. And, in the mean time, the technology loses its edge. So still, we are shaky, we cannot hope to compete in the international market that way,’ says Dutta.

‘The very restrictive licensing and the restrictive patent and IP regime that we have in India makes it tougher for you to protect your brand. And that’s the first challenge I see: brand protection. Because most start-ups don’t take that very seriously and this is why everybody has a copycat problem. Essentially, there’s somebody else who’s trying to do the exact same thing and often even copying your name,’ adds Mainak.

‘The gaming sector, where I am now involved, is very litigation prone. And it’s not just litigation, it’s prone to action from various different government departments who don’t necessarily understand the business. There’s a lot of confusion regarding whether this is entertainment or whether this is sports, and how we want to see it. Those kind of regulatory challenges are there for many sectors.’

Despite much regulatory relaxation for start-ups, penalties for non-compliance in some areas can be prodigious. Nevertheless, labour and employment, Goods and Service Tax, Shops and Establishments Act and Registrar of Companies compliance, as well regulatory requirements to combat sexual harassment, can be areas that those at the most nascent stages might be tempted to neglect.

‘Contrary to how the situation was about 15 or 20 years ago in India, when it was easy for somebody to miss out on certain compliances and still the law doesn’t catch up with you, today it has become extremely stringent. The law will catch up – if not tomorrow, definitely three years down the line. The fallout of not doing compliance is way higher than the money that you spend getting compliance done,’ says Janhvi Pradhan-Deshmukh, lead legal counsel at Startup Box, a firm that provides legal, consultancy and secretarial support to start-ups.

‘For bootstrapped start-ups, it’s a little difficult to convince them of certain things. With certain innovative business models, the law is not exactly made for them and, as such, they think that it’s ok to not do certain compliances because they don’t fall exactly under the ambit of the law. But in a start-up, time is more important than money because the start-up world is so dynamic – it changes so frequently, so fast – that to catch the trend, to catch the market is very important. You can’t be wasting time on answering legal notices and replying to queries.’

Running the farm

In recent years, India has experienced a cultural shift – doing away with past attitudes towards entrepreneurialism, and rethinking the concept of failure.

‘When someone wanted to start his or her own business you were looked down upon. If you had not secured good marks and were not academically qualified, or had not got a good job, that’s when you were starting something of your own,’ says Dutta.

‘But now, having a start-up – even having a failed start-up – has started to become a badge of honour.’

This has attracted not just young and ambitious minds, but also experienced executives into the field – and start-up adviser Pradhan-Deshmukh has found that her role is to handle not only legal issues, but to understand the psyche of all types of co-founders.

Neglecting the small print now can cause future headaches, or even financial hits.

‘The young generation, they are fresh out of university and have an amazing bunch of ideas. Unfortunately they are a little blindsided by the Flipkarts of the world and they cling to that: “Oh, I’m going to become a billionaire in a short period of time when I sell off the shares in my company, and I will then become a serial entrepreneur and I’ll use that money to invest somewhere else.” It doesn’t work like that. When you come to me with that kind of idea, you have already made up your mind to sell your own baby before it’s actually born,’ she says.

‘But there’s another set of co-founders who have worked in huge corporates at high levels and then they decide, “Ok, I don’t want to work for someone else anymore.” These are the people who are mature. They understand the importance of compliance and legal, they understand the importance of having the right professionals on board – having chartered accountants, a company secretary, a lawyer. Unfortunately, they are extremely fixated on certain things – they sat in senior positions in their companies and they think that they can treat the new business in the same way, or they can tell professionals what to do and what not to do. But again, it doesn’t work like that because the start-up world is extremely different to a company which has been in the market for a hundred years.’

Home-growing innovation

Despite the burgeoning popularity of entrepreneurialism at both ends of the career spectrum, Dutta believes there is more work to be done to fully embed a culture of innovation, particularly among schools and the academic community, where the teachers themselves must be trained to develop a more innovation-friendly mindset.

‘The government of India has started funding to create small tinkering spaces called Atal Tinkering Labs (ATLs) in schools. So the infrastructure is getting there, but who will actually give the soft learning part, the teaching part? That’s missing. The hardware is sitting under lock and key because no one is actually there. In the colleges, also, the curriculum needs to be revised and the professors need to lead from the front in being innovative and entrepreneurial in the endeavours. We will soon have bullet trains, but our curriculum is still stuck at steam engines!’

Incubators, accelerators and innovation spaces are popping up across the country, but although the tech scene is flourishing with an abundance of talent, some believe that a world-leading innovation marketplace is a little way off.

‘Many Indian start-ups are essentially copycats of foreign start-ups. These are not home-grown basic ideas, they are essentially very good copies of what is already listed in the market,’ says Mainak.

‘We are aiming to be on par with Silicon Valley or, now, China. China is now a very serious contender to become a global start-up giant. Everyone is now heading to China because of a lot of unique innovations – they used to replicate, now they are innovating. India is still stuck at the replication stage,’ Dutta adds.

‘Things are coming, but I wish the growth trajectory would be steeper, because I am amazed by how China is doing – they are first pushing money into R&D and now it has started bearing fruits. India needs to do that; India is not pushing money into R&D. Mostly, we are trying to replicate and customise ideas to our socio-economic contexts. I don’t think it’s a bad thing because, of course, it’s generating money and employment, and is innovative at a basic level. But to have an edge over other countries, you need to pursue radical innovations and aspire to be inventive.’

A lawyer in the mix

For most embryonic companies, absorbed by passion for a new idea and the pitfalls of establishing a company, hiring in-house legal support has not been the first priority. But Mainak advocates greater diversity on core teams – including lawyers.

‘In India, the legal system is extremely pyramidical. We have a phenomenon called “grand lawyering”, where essentially there are a very, very small group of senior advocates who corner most of the influence. You will often not have access to these guys when you are a very young company and you can’t afford their rates, which then means that established clients will always have an advantage going into any kind of litigation. This is why it is important for most start-ups in India to ensure that they never get into litigation.’

However, he adds: ‘Most still wait till their first run-in with the legal system or bad/unfair contracts – in other words, whenever the first “crisis” hits.’

In a fast-growing company, investment in company culture and good policymaking often falls by the wayside, and a toxic environment can emerge, incubating issues that further iterations of the organisation will have to face. And neglecting the detail now can cause future headaches, or even financial hits.

‘When you try to raise your third round of funding, or later on when you are listing and you are trying to raise a huge amount of funding and they are trying to do a due diligence assessment, a lot of these issues come to the fore. At this point, it’s a huge pain trying to solve all of these problems – maybe four years down the line the company realises that it hasn’t signed a non-disclosure agreement, or a pensions agreement, or even employment agreements, in some cases. That is when they would bring in somebody legal,’ says Mainak.

‘It’s not the best strategy, particularly with a system that is so regulation-heavy (India remains one of the most regulated economies in the world), so you would do well to have a legal mind right at your board stage, right when you are trying to strategise. Lawyers tend to bring logic and structure, and are able to play devil’s advocate.’

For start-ups rushing to market, or scaling fast on a shoestring budget, it can be tempting to assume that a lawyer will do nothing more than hamstring a fledgling business. But, when the realities of compliance, process, litigation, contract negotiation and management, brand protection and strategy development converge, there is a fertile world of opportunity for advisers to bring a critical eye to proceedings, and weed out potential problems early on.

Redefining the ‘Old Boys Club’

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The battle to build a diverse, highly skilled workforce, particularly at the leadership level, is continuing around the world – and India is no exception.

Female representation within the Indian legal profession is strikingly low. At present, only three female judges (of 31) sit on the Supreme Court of India, and only 6% of high court judges are women.

46% of those surveyed in Monster’s Women of India Inc study felt that there was an obvious perception that women cannot put in the same hours as men in the workplace. Remarkably, only 72% of men surveyed felt that both men and women ought to receive equal opportunities at work.

Although India ranks fifth lowest in the world in having females in leadership roles according to Women in business: beyond policy to progress, a 2018 Grant Thornton report, this figure has risen from 14% in 2014 to 20% in 2018.

But progress is gradual.

Workplace gender and cultural bias

The prevalence of scepticism regarding a female lawyer’s professional capability and counsel is reflective of gender bias at several levels, with female lawyers often labelled as ‘aggressive’ or ‘unfit’.

A high-profile example of this came in 2012, when comments made by a high court judge caused outrage throughout India. Justice Bhaktavatsala of Karnataka High Court was reported as saying that an unmarried advocate arguing a matrimonial case was unfit to argue, as she was an unmarried ‘spinster’:

‘Family matters should be argued only by married people, not spinsters. You should only watch. Bachelors and spinsters watching family court proceedings will start thinking if there is any need to marry at all. Marriage is not like a public transport system. You better get married and you will get very good experience to argue such cases.’

Following a successful petition, Justice Bhaktavatsala was removed from sitting on family matters.

Zia Mody, founder and managing partner of AZB & Partners, India

‘The foundation of my pathway into law was laid down when I was fairly young. I used to sit on the dining table over dinner and watch my father, who was a senior barrister (equivalent to Queen’s Counsel), talk to his solicitors about the next day’s matters, what he wanted to argue, what the other side would argue. It was truly exciting.

I am one of the founding partners of AZB & Partners, and the firm was born in 2004. Today, we have become an important pan-India law firm with nearly 450 lawyers. We have grown as India has grown.

Women pursuing leadership roles face the same challenges: lack of time, the need to multitask, the guilt of an absent parent and, sometimes, the inability of their seniors – male or female – to understand the safety net they require at a given point in time.

Mentorship is imperative to create and retain young female leaders. Most mentors today will still be male, so it is critical to sensitise them, to go and engage with them. To be willing to articulate your reasonable demands is absolutely critical to successful retention.’

But institutionalised biases remain: an inherent social prejudice or ‘glass ceiling’ subsists for females wishing to advance in the legal field, including in-house. The Women of India Inc study found that 47% of women reported an inherent view that, once married, women were far less serious about their work. And other stereotypes persist.

‘Today, in India, we’re still discussing “Does she have a voice?” and “Should she be taken seriously?” in the workplace,’ says Preeti Balwani, general counsel for India at The Kraft Heinz Company.

‘One of the most critical things that women face is the fact that stereotypes interfere with them being taken seriously.’

She adds: ‘They also judge you based on your appearance – they believe that a certain type of appearance denotes that a woman may be more invested in her appearance than her work.’

Maternity and demanding work-life balance

With the work day – and perhaps night – split between client meetings, case preparation and court hearings, the life of an Indian lawyer, whether at the bar, bench or in-house, does not readily sync with the demands of raising a family.

‘A major challenge would be managing perceptions and the unconscious bias people have towards flexible working hours. For example, when women return from maternity leave,’ explains Shelly Kohli, assistant general counsel for South Asia, Middle East and North Africa at Levi Strauss & Co.

‘Despite being on call 24 hours a day, seven days a week, we still feel pressured if we have to leave early or come in late, whether it’s because of childcare or any other commitment. I also feel that there is a challenge in being perceived as high potential working flexible hours – this whole stigma around working only when you’re visible is a very big challenge that women lawyers continue to face.’

‘Whilst hiring a woman, management consider if she’s going to get married and have children in the near future,’ adds Balwani.

The Women of India Inc study found that 46% of women felt that taking maternity leave would lead to a view that they would also quit, with 59% describing the transition back to work as challenging. This was due to various reasons: unaccommodating executives, pressure to leave the company and their commitment to work being in doubt.

Debolina Partap, general counsel, Wockhardt Ltd, India

‘I think female empowerment in India is still growing, and that women lawyers are learning to have that work-life balance – understanding that it’s possible to have a professional life as well as a social life and to do justice to both. I think, firstly, you need to be a good mother and a good sister, then a good lawyer. That is something we need to understand – if we are good in our roles – we can be good at everything.

The voices of women are being heard more and more, but there are still miles to go. In India, there are very few women legal leaders at the top – I would say if you looked at the top general counsels in India, there would be 5-7% who are women. Personally, I encourage women in the profession and, where I work, women are the majority.

When it comes to balancing my work and home life, I have very supportive family members – whether it’s my son, husband, parents, in-laws or my other relatives. We give space to one another. We respect our roles and respect what we are doing. I think that’s very important to achieve harmony in the work-life balance, and respect what the other person is doing.

As a GC, it’s my job to help the business grow, but the right way. Whilst our office hours are nine to five, I work at least 16-17 hours a day. Out of these hours, five or six are always with management in an advisory role – advising the board, the chairmen and the managing directors, and on the implementation of various strategies with my co-business partners.

My one piece of advice would be to always be open to learning from anyone, including your most junior colleague. Young professionals look at a problem from a different angle, which sometimes you might miss. If we are not open to their ideas, we could be boxed in. We should be open to any new perspectives from anyone. I have had a lot of reverse learning and up-learning – this way you can learn even what you might not be expected to know.’

But, in 2017, the Indian government modified the 1961 Maternity Benefit Act to increase the length of maternity leave from 12 to 26 weeks to females with fewer than two surviving children. While on maternity leave, a female is entitled to ‘maternity benefit’, a fully paid absence from employment to take care of a child. The amendment also included ‘work from home’, and crèche provisions for companies that employ 50 or more employees.

‘I was thrilled when the 2017 maternity law amendment was finally passed – I think it’s a welcome step,’ says Kohli.

‘These changes actually position India as one of the most progressive countries in terms of providing maternity benefits: enhancing maternity leave from 12 weeks to 26 weeks enables women to combine their professional and personal life successfully without jeopardising their health or job security. I believe there are surveys that suggest that 25% of women lawyers actually forgo their careers after childbirth. These amendments address this challenge quite a bit – it also addresses having crèche facilities and ability to work from home, and I think this will eventually show demonstrable results in the form of more and more women employees coming back to work after maternity leave and helping the retention process.’

But not everyone is uncritical of the changes.

Says Zia Mody, founder and managing partner of AZB & Partners: ‘My thoughts on the 2017 maternity leave provisions are that it provides women with the safety net, which creates a good deal of comfort to them. I think the problem for employers is that they will have to pay six months and if, after that, a woman does not return to her workplace but joins a competitor, well – that’s that!’

Additional financial burden on employers could mean that some corporations are reluctant to invest in female employees, considering maternity leave and other associated benefits as wasted resource.

According to Balwani, there is still more work to be done.

‘The 2017 maternity leave provisions are an improvement on the previous law, considering that the previous law was very rudimentary. The new law has increased the amount of weeks, so without a doubt it’s a step in the right direction. Is it comparable to the maternity leave provisions in countries like Norway? No. We need to look around and see where we stand on the global platform – why is a mother in India at a disadvantage against her peers across the world?’

Gender pay gap

A gender pay gap exists whereby women in India earn on average 19% less than men. According to a Monster Salary Index Report, this gap increases to 30% for highly-skilled occupations. The report also showed that 60% of the working women in India surveyed felt discrimination at work and a third of those felt that they were not easily considered for leadership roles. However, of those surveyed, 71% of men and 68% of women felt that gender equality should be a prime concern within their organisation.

57% of Indian businesses surveyed by Grant Thornton in their 2018 Women in business: beyond policy to progress report, indicated that the Indian government ought to be proactive in its approach and do more to tackle the issue of gender disparity in the workplace and business leadership at a statutory position. Yet, of those 57%, only 31% stated that businesses and government should work in conjunction with each other in the domain of gender disparity.

The introduction of The Companies Act in 2013 made it compulsory for all listed and large public companies with a share of 100 crore or a turnover of 300 crores to have a minimum of one female director on their board in India. This was the first obligatory quota for female board members, covering all fields of employment, including legal.

‘Any kind of regulation such as The Companies Act 2013 requires compliance, and people take compliance very seriously. There has been a significant shift between what started off as tokenism versus actual seriousness about compliance. Some of this was already existent for public listed companies, so it’s still early days, but there is a move in the right direction. It’s too early to judge its success yet. I think if you give it another five years, we’ll be able to really sit back and evaluate whether the Act was successful in driving inclusion,’ says Balwani.

But some, like Kohli, argue that enforcement needs to beefed up:

Shelly Kohli, assistant general counsel for South Asia, Middle East and North Africa at Levi Strauss & Co

‘Compared to where we are now, women lawyers have really come a long way. We are continuing to witness growth in the number of women who are graduating from law school but, for women to carve out a successful career in law, still it appears rather challenging or daunting. There are statistics that suggest women lawyers and partners in top law firms are rather low. On the in-house side, I feel that we have seen better progress. This could be because in-house lawyers generally tend to have a better work-life balance and that there are more leadership opportunities.

There is also a gender wage gap between men and women. I think it is pretty consistent across different professions and so is not unique to lawyers. But, whilst this can vary depending on which industry or how big the company is, I think there are a lesser number of women in senior leadership roles. This makes it extremely challenging for women to find able mentors to guide and help them navigate and climb up the corporate ladder.

I am a big advocate of mentorship. I believe that the importance of mentorship for young female leaders – especially those who aspire for professional development – cannot be overemphasised. The promising thing is that many organisations today structure mentorship programmes where women can learn from each other. I strongly believe that mentors can actually facilitate both professional as well as personal development.

Never hesitate to seek out mentors and sponsors who can advocate for your success. I think, as women, we are always hesitant. We seek out mentors, but we tend to always shy away from promoting ourselves and our work. Remember, too, to be patient. I think a lot of young lawyers can improve on this – they want results quickly, but this is a profession which demands a lot of patience and spending time to build expertise.’

‘Whilst this law, certainly on paper, helps improve inclusion and gender diversity in boardrooms, I feel much ground really needs to be covered. There has been data compiled by PRIME Database which has pulled up corporate reports filed by companies as of December 2018. It suggests that 118 of the top 500 national stock exchange listed companies do not have an independent female member on their board,’ she says.

‘These are not very promising numbers; I’m hoping that companies will implement this more seriously and that would really help women coming into more senior positions in companies. I think it’s a compliance issue and I would like to see how the authorities would react to this.

The Equal Remuneration Act 1976 requires the payment of equal remuneration to both male and female workers. However, eliminating discrimination in the workplace has proven to be a difficult task in practice.

‘We haven’t yet gotten to the conversations around the considerable pay gap. I think there is a very high presupposition that women don’t understand finance and that we as a gender don’t know how to ask for what we deserve,’ says Balwani.

Despite government legislation, representation of women in the in-house legal community is lagging behind. Female lawyers in top roles, including in-house, are still the exception rather than the rule. While overt discrimination towards women in the legal, and in-house, field has somewhat decreased, a common view is that this progress has largely been restricted to box-ticking.

Legislation alone cannot force headway, and organisations committed to genuine change and development concerning diversity within the workplace have aligned their policies with a genuine belief that diversity is essential for the advancement of society.

In-house and outside counsel: A love/hate relationship

love-hate

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.

Ravi Singhania, managing partner, Singhania & Partners

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.

Now Playing: The Future of India and Audio Streaming

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.

‘The difficulty lies in getting your average Indian user to see value in a premium service.’

‘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.

Ali Sachedina, General Counsel and Vice President of Business Affairs, JioSaavn

Taking an unusual path to the top legal job at Indian streaming site JioSaavn, Sachedina discusses his journey into music.

‘Before I joined Saavn, I started my career as a criminal defence lawyer. I was obsessed with music, but moved to New York City and worked in compliance at a bank – and it wasn’t for me. It was at that time I decided I was going to jump straight into the music industry. I wrote to a guy who was managing one of the artists I really liked. I ended up becoming his intern and went from a six-figure salary to zero for two years, but I was happier than I’d ever been.

I started managing bands, but I didn’t really understand how law, music and media tied in together. Eventually, I met a lawyer who had worked in the music business for almost 40 years and was working in-house for the company that managed Aerosmith. He was an old-school, Irish lawyer who told me: “I’m not going to pay you, but what I will do is teach you everything you need to know to set up your own shop.” That’s how I started my career in the music industry – as a lawyer, at least.

I went to India for the first time in my life in 2002. Over the course of a number of trips, I started meeting artists and musicians, helping them understand their IP rights, what to look out for in terms of management deals and recording contracts. At the same time, I had a practice in New York primarily representing hip-hop artists, bands like Mobb Deep and artists out of Canada. I was working on an entire spectrum of deals – anything that came my way, I’d do it.

Working with South Asian artists, I had heard of Saavn and had even done panels with some of their members. Then I started negotiating deals against them – representing artists who were being signed to the various programmes they had. In 2017, they approached me about being their general counsel and the rest is history. I’ve been here since April 2017, so it’s not a long tenure, but it’s been an incredibly sharp learning curve for someone who was living a very rock-and-roll lifestyle as a music lawyer!’

‘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.

‘China were trendsetters with what they did… there is immense value in tackling 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.’

On notice: Teva’s entire $330m legal spend could go to one law firm

teva

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.