While 2013 was a year of deadlock and inertia, 2014 is likely to see movement on many fronts
It is increasingly likely that that the inactivity of recent months will not last much longer. For not only are efforts to rejuvenate the economy making themselves visible, but more importantly, the surprising result in recent elections in Delhi has made it apparent that the electorate is flexing its muscle. Maintaining the status quo is no longer an option and there are clear signs that the government and the main opposition parties have read the writing on the wall. The dithering cannot continue. Has India reached its tipping point?
With a general election due in May, corporate India has already factored in the political changes that may lie in store. But what of changes on the legal and regulatory front? How prepared are general counsel to embrace the challenges that 2014 will undoubtedly throw at them?
Writing in this issue’s Vantage point in-house lawyers from nine leading companies along with a senior advocate provide insights into what they predict will be the greatest challenges and opportunities in the year ahead.
Several focus on corporate compliance, which they believe will become a much more important aspect of doing business in India. Suprio Dasgupta, the India general counsel at Schneider Electric, goes as far as to say that he expects “a sea change in attitudes” in this regard, largely on account of the evolution of the Companies Act, 2013, and the new Jan Lokpal anti-corruption law that is in the offing.
Taxation and labour law are flagged as two potentially problematic areas for in-house counsel, along with the burgeoning amount of work that will accompany an expected economic upturn.
On the whole, our commentators foretell a good year for India-focused in-house counsel. Shruti Dvivedi Sodhi, the legal director at Colt Technologies, is looking forward to “a period of calm following the volatility that 2013 threw at us”, while several others predict that 2014 will be a year in which in-house lawyers will grow in stature and take on new areas of responsibility. Challenges loom large, but our commentators suggest that the testing times will ultimately be good for the in-house profession, giving it the opportunity to prove its worth and boost its cachet.
Continuing with the same theme, our Cover story finds that the growth in stature of in-house counsel has actually been underway for some time.
Indeed, their empowerment has now gained sufficient momentum that it has triggered a subtle but important change in the relationship between in-house counsel and law firms. As Devdas Baliga, the vice president legal at Coca-Cola India, explains, “there is a realization from law firms that it is now the in-house lawyer who will make the calls”.
Furthermore, as lawyers in private practice reluctantly begin to kowtow to their in-house brethren, in-house lawyers are no longer indulging them with the reverence they once enjoyed. “Earlier if you got a call from a senior partner you felt good about it as an in-house counsel … now it doesn’t matter at all,” says Vijaya Sampath, a senior partner at Lakshmikumaran & Sridharan who was formerly the general counsel of Bharti Enterprises.
This, combined with the fact that today’s in-house lawyers are seen as more assertive, knowledgeable and experienced than their predecessors, means that companies are increasingly relying on their internal lawyers, rather than external law firms, for advice. “The in-house lawyer is now asked for advice and no longer is he asked to obtain legal advice,” notes Baliga.
So, does this spell the end of business as usual for India’s law firms?
Shardul Shroff, the managing partner of the Delhi office of Amarchand Mangaldas, expresses confidence that law firms will retain an important role working on “heavier matters rather than routine matters”.
Rajiv Luthra, the managing partner of Luthra & Luthra, meanwhile, sees the need for law firms need to increase efficiency. He says this can be achieved through “increased use of technological tools and smart knowledge management, and a focus on utilizing the time of our counsel most effectively”.
This will be quite a change for a profession that is certainly not famed for its eagerness to embrace new technology.
Change is also afoot in the board rooms of Indian companies. In New directions we investigate how the Companies Act, 2013, has transformed the responsibilities, rewards and liabilities of independent directors. Our coverage exposes potential areas of conflict in the new rules and examines the challenges that companies will face when implementing the act’s provisions.
In Unlocking potential we turn the spotlight on private equity, a sector that many observers believe has failed to fulfil its promise in India. Of particular concern is the lack of attractive exit options. Our coverage analyses the legal and regulatory impediments to successful exits, and explores the options that are available to investors with existing portfolios in Indian companies.
As 2013 draws to a close, India Business Law Journal presents its annual coverage of the most significant deals and disputes of the year. The deals showcased in this feature point to efforts by companies to drive deals forward despite the uncertainty of the times. In recognizing the deals, we once again celebrate the skill, innovation and practical expertise of the lawyers and law firms that brought each deal to fruition.
Clearly they have what it takes to stay the course in what may well be an exciting, albeit challenging, year ahead.
