Corporate lawyers and what they do

CORPORATE LAWYERS AND WHAT THEY DO

The other day I had the refreshing opportunity to meet a young man aspiring to be a corporate lawyer. As a career how true does it hold for the Indian condition?

Till recently, from what I can see, the Indian corporations had not been allowed to go international and therefore remained small or fairly large entities with a controlling structure firmly in the hands of a patriarch or a small bunch of a family. The whims and fancies of the chief resulted in the decisions that the corporation then followed. The mind set was feudal and the management even more so. Nothing was straightforward. What the corporation purported to be doing and what it actually did to make a killing were two entirely different things. The Chartered accountant who knew what was going on would paint the correct picture for public consumption. The balance sheet would show red or black as the chief decided the need of the moment demanded and that was that. A public company was even more rampantly badly managed as the share holders were the final losers.

All companies were playing on the governments controls. The interest rates were high and monopolies were more the rule than the exception. The profit margins were high and clean business unheard of. In this scenario I would have failed to see a corporate lawyer making any headway. The companies would invest half their money in manufacturing or trading as shown on paper. The other half would be invested in other companies doing well for some reason or the other or in land. Fixed deposits would fetch up to 18% per annum. A profit that is difficult to achieve even by well managed companies today. Supplier’s payments would be delayed as long as possible so that interest could be earned on the amount and that would help the company keep financially afloat. All rules and laws were observed in the breaking more or less; the fear of the law taking speedily its course hardly being a deterrent.

The legal system of India with its tortoise speed actually encourages breaking of economic laws. Businesses actually want to go to court. Keeping arguments sub judice is in their interest. This way they can continue holding on to funds that does not belong to them or supply substandard products and services at favorable margins. When the time comes of a settlement it is done out of court. By then, in the interweaving years which may be anything from 10 to 20 years, the company has doubled or tripled its capital base by earning interest on the blocked capital. It even tempts the corporations to edge over to take criminal risks.

The activities are rarely illegal per se but highly unethical nevertheless. The corporate lawyer as I can see in the present context can only be a paid executive of the company doing nearly the same as any lawyer working independently. The only difference being that he becomes a specialist for that corporation’s activities. Still the question remains if he will ever get a chance to become an advisor and policy maker because that is where the actual fun is. Often the owners of the company play on the vanities of younger people to win their trust and promote them to director levels; they become unknowingly fronts for the owner and worse, get caught in the criminal net!

The opening of the economy has brought a different culture. A culture of a corporation working by certain principles laid down by the board is not exactly new to India but now is becoming quite accepted. All the international MNCs that have opened shop are bringing a whiff of some unknown managing customs. Good for us! In this change of managing methods, there is of course a place for the corporate lawyer. But gain I ask a question. In India where the legal system remains out of tune to the exigencies of the time, how much can a corporate lawyer really do? And if he will not be allowed to do much, is there a career in it? A corporate lawyer is at best a management expert with knowledge of the law for the time being and for some time it will remain so.

The answer is elsewhere. It is in the Law firms which are fast becoming a force worth emulation and aping. They act as consultants to corporations and also take their cases to court. The corporation’s prefer to pay them a consultancy and get expert advice and support rather then depend on untried employees with no chance to broaden their scope of experience in a small enclosed environment. The corporate lawyer is really coming into his own in these law firms.

While we are on the subject, why not think International? With international trade growing and corporations from other countries active here and vice versa, here is fodder for the next generation as long as they are not influenced mainly by the vision of a high profile life as seen in the movies and TV serials coming to us from the western countries where the jet-set corporate lawyer is a power to reckon with. He not only knows the law but also assists the corporations to walk the fine fence of “just legal”. He carries a lot of prestige and even political clout as he holds a place nobody else can boast of in the hierarchy of the corporation. He is the only one who understands and often the only one privy to the complete picture. Of course the position then gives him huge corporate benefits such as limos and secretaries with his own jet and what not.

If only life could be restricted to such glamorous visions!