DO YOU FEEL THAT THE ROLE OF GENERAL COUNSELS IS EVOLVING IN TODAY’S BUSINESS SCENARIO? AND IF SO, HOW?

The role of a General Counsel in leading Legal teams in Corporate India is paramount:

In the shortest of terms, the role is ‘paramount’ or even fit to be called as ‘ indispensable’. Today no corporate (whether MNC or Indian) can survive without a sound legal team

There are many reasons for this:

• the ever-increasing compliance requirements under a plethora of laws in India and their even increasing numbers;
• the sudden awakening of the regulators to take action against non-compliant companies
• the daring kind of business threatening moves taken by business competitors and resultant corporate wars;
• ever increasing ‘vigilante’ consumerism and judicial adventurism
• shareholder activism
• the ever-threatening actions of the ‘environmentalists and conservationists
• the ever-increasing public interest litigation
• the rampant media trials and many more factors

Business today needs the legal function for:

• ensuring compliance with the tons of applicable laws and thereby avoid any adverse regulatory action which could endanger the directors and other top brass of the company besides exposing the company to the risk of adverse media publicity. In absence of a strong legal and compliance function any such regulatory action can seriously threaten/ jeopardize the business prospects of the company besides erosion of confidence of the investors, lenders, banks, financial institutions, investment companies, mutual funds, private equity investors etc.;
• ensuring safety of the business by proper drafting, management and custody of critical legal instruments. In absence of a good legal function the company would be at the mercy of the external lawyers, who may have the expertise but not the time and dedication which are normally the hall marks of an in-house legal team. Only a vibrant in-house legal team can properly advise the company on drafting of contracts, registration (in respect of Real estate), payment of stamp duties, etc.

It is worth noting that any miss in complying with any of these steps can expose the company to the risk of litigation and make it vulnerable to action by regulators. This is apart from the major risk of business loss if the documents have not been given an evidential value by in house dedicated legal professionals. Even drafting of a basic contract requires careful vetting by in-house legal team since it could have implications under any of the laws viz Competition law, labor laws, environment protection laws, administrative laws, corporate laws, securities laws etc.

• Protecting the company’s interests by taking legal action or defend legal proceedings in courts. Today a corporate face the threat of litigation from the competitors, shareholders, investors, workmen, consumers, debtors, lenders and regulatory bodies.

While the external law firms appear on behalf of the company before the various courts, it is only a strong in-house legal team which can keep track of the hearings, brief senior counsel and ensure that they attend (instead of taking adjournments) the hearings on the fixed dates. Unless the in-house legal team is strong the external lawyers may not understand the gravity of a legal matter from business point of view. A truly vigilant in-house legal counsel can only absorb the business pressure and strike a balance between the business needs and compliance with the law. In event of litigation, external lawyers take their own time to understand the matter since they do not closely understand the specific business of their client. However, a strong in-house legal counsel can guide the entire legal course basis his close understanding of business;

• Protecting the company’s I.P rights and taking action against infringers, counterfeiters. This also helps protect the society and consumers at large.