These functions work as an ethical watchdog to provide a distinct commercial perspective for better decision making
When Sunny Deol exploded into a thunderous monologue in court during Damini and went on to deliver one of his most iconic dialogues – ‘Tareekh pe tareekh! Tareekh pe tareekh!’ – millions of Indians felt his seething frustration about the legal system.
The lawyer was depicted as a court room hero fighting for justice for those who cannot fend for themselves. The younger generations are probably taken by the glamorous and glitzy depiction of what lawyers do (and how they live) in the Suits. These diverse depictions of lawyers pretty shape the popular perception of us ‘men and women in black’. The reality of being a lawyer, however, is sadly more mundane.
The traditional role of a lawyer in India has been that of an ‘advocate’ who argues cases in a court, or that of a ‘solicitor’ who drafts wills, property deeds or other legal documents, or both. Lawyering, being a traditional and conservative profession, has traditionally not been closely associated with the myriad complexities of the world of business.
Impact of 1990s Liberalization on India’s Legal Sector
The legal sector, like many other sectors, witnessed dramatic changes following the liberalisation of India’s economy in 1991.The demise of the license permit raaj coupled with privatisation, globalisation and foreign investment inflow, and the unleashing of free market forces increased the volume of demand for legal services and also created demand for new types of legal services across a wide swathe of commercial, corporate and financial laws. This also led to the growth of large corporate law firms specialising in providing such types of legal services.
Corporate India soon realised that it was far more viable to build ‘in-house’ legal services i.e. hire lawyers with relevant technical expertise rather than outsourcing the same work to external service providers. This led to the growth of the in-house legal function in India. Increasing regulatory burden also made it prudent to build internal compliance functions. Just like HR, Marketing, Administration, ‘Legal & Compliance’ became a key function in relation to which companies were compelled to decide on what and how much to insource or outsource. The in-house lawyer was expected to:
get legal work done cheaper (than external lawyers)
provide legal services faster and more tailored to the company’s needs
coordinate with external lawyers
ensure that the company is compliant with applicable laws
Further Reshaping of Role of In-house Lawyers
It has now been more than three decades since India’s liberalisation. We are a part of a globalised world where transformational technological changes are occurring at an explosive pace in a polarised and volatile political environment. Businesses and industries have become increasingly complex and dynamic, and legal and regulatory systems that regulate them have expanded significantly. And we have just emerged from a global pandemic which tested businesses at their core.
In this new environment, the role of in-house lawyers is getting increasingly broadened and sophisticated.
In-house lawyers are required to execute complex work that requires wider technical expertise and experience, and hence need to constantly upskill. In addition, in-house lawyers are under increased pressure to understand the strengths and suitability of a diverse group of external lawyers who can provide services to the company and bring in external lawyers with relevant technical legal expertise and industry experience at an optimum cost.
There is increasing pressure to do more with less; find appropriate solutions, whether it involves employing technological solutions to scale up execution, employing appropriate project management tools or smart structuring of fee and work arrangements with external lawyers to reduce cost.
Taking a more proactive attitude to risk mitigation is becoming critical. Since products and services are constantly evolving, to be effective in delivering value, in-house lawyers have to be one step ahead in their understanding of existing legal frameworks and creative in finding solutions that help in operationalising innovations.
At a senior level, the role of in-house lawyers is becoming more strategic, from both outward and inward standpoint:
Given the dynamic interaction and intermixing of legal and business problems, companies benefit from getting the participation of in-house lawyers in strategic decision making, whether it is structuring a new acquisition or launching of a new product. Relying on their legal, industry and institutional knowledge, in-house lawyers can provide a distinct commercial perspective that would contribute to better decision making. In-house lawyers are an integral part of senior management teams in crisis management situations and other situations where the reputation of the company is at a stake.
In-house lawyers play the role of the company’s ethical watchdogs and play a pivotal role in formulating and implementing internal policies. While some internal policies are mandatorily required by law, others are become critical given the rising awareness and need to comply with ESG standards. Formulation and implementation of such internal policies is not just an ethical but also business imperative for companies to enhance brand value, attract investors and build relationships with customers and other stakeholders.
The Legal and Compliance function in the LV Group has evolved in sync with the exponential expansion of the Group. We are now a Group with interests in diverse businesses from real estate to ed-tech, with ambitions to get into more sectors and industries. The Legal & Compliance function of the Group is embracing the newer and diverse challenges with gusto and is constantly striving to up its game to support the Group in achieving its ambitions.
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