While the India Inc. faces a roaring governance environment where compliance plays an inevitable role, corporates have now moved the conscious corner while taking decisions on who their compliance advisors should be. Amidst the galore, Lex Witness gets into a candid talk with Indranil Choudhary, Founder & CEO, Lexplosion Solutions.
Prior to venturing out on my own, I worked as an in-house counsel for various GE businesses. During my stint, I had seen compliance to be a very troublesome area as external support wasn’t readily available for it. The compliance space was handled by middlemen who worked to accomplish tasks associated with various government departments, but not provide end-to-end compliance solutions. Professionals well versed with laws of different states were readily available as opposed to those who knew what compliance solutions were implementable throughout the country. Moreover, MNCs and global giants were trickling into the Indian market in 2006-2007, which made it all the more important for compliance to be in place. Sensing a gap in the availability of a comprehensive compliance solution and its growing need, I chose to focus on this area as an external compliance lawyer.
Lexplosion was started by the four of us, who previously worked as lawyers for GE in 2007. Some of us knew each other from our student days in NLSIU, Bangalore. Three of us had already moved out to form a law firm. However, I was not keen on joining a law firm, as my experience had led me to believe it to be ring-fenced with its own defined grammar. I wanted to do something different, mainly in the field of compliance. The core idea was to put to use our legal skills in making businesses compliant, rather than act as a linkage between a business and the government.
Since compliance is spread across the organization, we realized that technology has to play a key role in synchronizing all that a company needs to follow. Our goals didn’t sync with the idea of a law firm, hence we started a separate private limited company, Lexplosion, with the tagline “Innovating Legally”. We wanted to work in the cross section area between law and technology. We wanted to bring legal support closer to people who needed it but could seldom afford it.
I think the fundamental difference between being an in-house counsel to an external compliance lawyer was that in the former position, I worked with the problems pertaining to only one company whereas in the latter, my work was spread over various organizations across different verticals. As compliance counsels, we have worked with companies belonging to industries such as FMCG, pharma and IT etc. The range of issues that we have had to deal with in Lexplosion is impossible to be accomplished as an in-house lawyer for a single company. As a business or in-house counsel, a lot of my time was spent sorting out immediate issues that arose, which hindered focus on the overall concept of law. Despite entailing hard work, an inhouse lawyer need not get into the depths that we typically need to. The two profiles come with their fair share of merits and demerits. Besides, Lexplosion is an entrepreneurial venture and it comes with its own interesting challenges.
When we started our journey in this sphere, mostly foreign-owned corporations and Indian MNCs were bothered about compliance. Their combined share formed only 2 to 5 percent of India Inc. Even large Indian companies that did not need to interact with global players were nonchalant about compliance. The first two to three years of our operations (till around 2010) went into explaining to firms the need for compliance. Between 2010 and 2013, (the period after the economic meltdown of 2008 and pre-institution of the Companies Act 2013), India-focused companies realized that things could go wrong and why they should take compliance seriously. Then on, the focus shifted from the need of compliance to what can we do. Not only did we feel that India Inc has realized the need to be compliant, but we also sensed that a lot of these companies were interested in compliance but seldom could afford the hourly rate of lawyers or large fees of firms. That is when we felt the need to introduce software-based support that works across multiple organizations. It would provide them with the quality of compliance support that they need, at a low cost. Thus, in 2011, we introduced Komrisk, the first cloud-based compliance management solution in India.
In the post 2013 scenario, when the new Companies Act was introduced, Sec 134 (5) (F) made it mandatory for boards to certify in the Annual Director’s Report that systems were in place to comply with all laws and that they were accurate. Irrespective of the scale and size of operations, companies have to mandatorily make the declaration. With this provision in place, several small companies realized that they need to comply especially if they want funding from VCs and angels. This turn of events made us realize that Komrisk is unsuitable for these organizations, as it is meant for large enterprises. Small enterprises needed a simple, online and clickable solution and this is where Komplify came in. Meant for SMEs, Komplify is currently available on www.komplify.com
We have helped a lot of organizations with our audits, assessments, updates and in understanding that their current scenario is not as comfortable as they believe. Our various compliance programmes explained to organizations that there was a lot more that needed to be done. With our systems in place, the process of compliance became transparent and ethical. For instance, Komrisk is used through an entire organization and the CEOs/CFOs can actually log in to see what’s happening. The system cannot be bluffed anymore and this acts as a driver for compliant behaviour. After the initial teething problems were overcome, it helps organizations and individuals keep track of what is required. They are regularly alerted through calendar reminders about the different compliances needed. Their life becomes a lot simpler and they do their jobs a lot better.
I think at the core of anchor point is our vast knowledge of law and compliance. Over the last 9 years, we have worked closely with some of the largest businesses of the country. We have had the opportunity of working with very compliant organizations, see how their businesses work and understand their ethical programmes from close quarters. We have gained exposure to compliances applicable across the various states of country. The vastness of our operations has allowed us to identify all the critical compliances across the country and we keep updating ourselves. The content that have built and the easy access that we provide to it through Komrisk and now Komplify, is our biggest strength.
At the outset, we want to make law more accessible to larger sections of business. Within the business space, we want to make compliance more available along with other forms of legal support to small and medium businesses. We believe that they need it the most and can afford it the least. Once they are compliant, they will be able to drive more business from the global market their way and instate safer work environments. Foreign corporations too will find it easier to set up units here. We intend to continue making law more accessible through simpler technology in future as well.
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