Indian Lawyers and the State

From The Practice January/February 2018
Touch points in the policymaking process

The summer of 2017 marked the 70th anniversary of Indian independence. While the leaders of this world-changing event—Mohandas Gandhi and Jawaharlal Nehru—are widely known, it is perhaps less noted that both of these individuals were British-trained barristers. They were lawyers. (It is also noteworthy that Muhammad Ali Jinnah, Gandhi and Nehru’s frequent foil who eventually became a leading voice for partition of the subcontinent and went on to become the first prime minister of Pakistan, was also a British-trained barrister.) Indeed, many of the prominent roles in India’s Constituent Assembly, the body that drafted its constitution, were also filled by lawyers. And, the first session of Lok Sabha (the lower house of India’s Parliament), inaugurated in May 1952, was comprised of 26 percent lawyers, which constituted the largest professional group in Parliament at the time. Thus, it would not be an exaggeration to say that India’s early years and much of the country’s initial progress were driven by members of the legal profession.

The propensity for lawyers to enter directly into Indian politics and policymaking has not, however, remained constant. Today, lawyers make up just 7 percent of Lok Sabha—a nearly 20 percent drop from 1952—illustrating the declining dominance of lawyers in the county’s highest legislative body. By way of comparison, research found a similar trend in the United States, where in the early 19th century, nearly 80 percent of the U.S. Congress was comprised of lawyers. Today that number is down to less than 40 percent. (For more on how this trend has taken hold in the United States, see “Declining Dominance.”)

At first glance, one might not view a declining number of lawyers directly elected into the Indian government as a paramount concern. However, this decline is taking place against a backdrop of significant policy problems that lawyers are arguably among the best suited to solve. One example making headlines in recent years is the implementation of India’s Aadhaar program. Originally launched in 2009, the program was established to address difficulties related to personal identification for underserved populations trying to access government programs. Today, the Aadhaar program boasts the world’s largest biometric database, containing not only individuals’ contact and demographic information but also photos, fingerprints, and iris scans. On the one hand, Aadhaar is an innovative approach to systematizing how more than a billion people interact with their government in minor and major ways. On the other hand, the program presents grave privacy concerns—exactly the types of issues lawyers are trained to work through. Case in point: This past August, the Indian Supreme Court expressed concerns that the Aadhaar program may impinge on the rights to privacy guaranteed by the Indian Constitution.

The first session of Lok Sabha, inaugurated in May 1952, was comprised of 26 percent lawyers. Today, lawyers make up just 7 percent of the body.

As the Aadhaar example underlies, there is space for lawyers to fill in the policymaking process. This article focuses on some of the emerging new roles of lawyers in Indian policymaking and, in particular, those within law firms and in-house legal departments. While corporate lawyers do not make up a large portion of the Indian legal profession—the corporate legal bar accounts for roughly 10,000 of India’s 1.3 million lawyers—there are signs that they are taking on a larger role in the formulation of policy at the highest levels. Below, we explore how this shift is playing out. First, we look at how changes in Indian governance are allowing increased participation of law firms in policymaking. Then, we transition over to Indian corporate legal departments, where the in-house counsel movement has taken effect.

Uncovering the influence of corporate lawyers in policy

Bhargavi Zaveri, a researcher at the National Institute of Public Finance and Policy in India and a core contributor to the Center on the Legal Profession’s India volume (see “The Indian Legal Profession in the Age of Globalization”), has written about the increasing role Indian lawyers are playing in the formulation of policy. Having worked at an Indian law firm, Zaveri was well placed to both identify instances of corporate lawyers interfacing with the policymaking process and identify larger trends. “When you work as part of a law firm, you may end up taking a myopic view of the world,” she explains. “The questions that you ask every morning are about the immediate transaction or the immediate case that you’re dealing with. Yet even with those limited questions, I saw that we did end up having a small influence on subsequent iterations of policies.”

This led Zaveri to research the role corporate lawyers were having in the Indian policymaking process. She explains:

I wanted to know: Was it just me who was so special or was there a larger set of the legal profession that was having this impact? Upon closer examination, this broke down into three key research questions: First, was I actually having this influence on policy, or was it just my perception of my own work? If I really was having this impact, it probably meant there were others like me—that is, concurrently working in Indian law firms and interacting with regulators—having a similar influence on policy. Were there others having this impact? And last, if that was the case, was it possible to quantify that influence?

To address these questions, Zaveri interviewed lawyers across six different Indian law firms as well as representatives from both the Ministry of Finance and the Ministry of Commerce and Industry. Where possible, she also pulled data from law firm websites and other publicly available sources. What followed was her paper, “How India’s Corporate Law Firms Influence Legal, Policy, and Regulatory Frameworks.” Its central finding: The corporate legal services sector in India has influence in the formulation of Indian law and policy today, and it has the potential to become even more influential and proactive.

Opportunities for corporate lawyers in a shifting policy landscape

Zaveri points to features that exist in the United States and the United Kingdom—where lawyers have a more robust role in policymaking—that are now taking form in India and are helping to create an environment ripe for lawyer involvement in the policymaking process. The convergence of three emerging trends in particular provides a compelling narrative for corporate lawyers’ increased involvement in policy formulation and suggests that their influence in the policy sphere will continue to grow.

If I really was having this impact, it probably meant there were others like me.

Bhargavi Zaveri, researcher at the National Institute of Public Finance and Policy in India

The rise of the administrative state. In the early 1990s, India saw the emergence of numerous regulators focused on specific sectors of economic activity from food safety to pensions (e.g., the Securities and Exchange Board of India, similar to the Securities and Exchange Commission [SEC] in the United States). Subsequent to establishing these regulators, Parliament often grants policymaking authority to these bodies within the scope of their sector. In other words, Zaveri notes, the proliferation of regulators has decentralized policymaking power to those regulatory bodies. “That automatically multiplies the touch points that one has with policymaking processes,” she explains. “With the rise of a market-based economy comes a general increase in regulatory agencies, which in turn creates opportunities for interaction with the administration. A lot of those roles are now being played by lawyers.”

Public consultation on law and policy. The concept of public consultation or public comment has deep roots in the United States, but agencies are bound to adhere to principles of transparency and public consultation according to the Administrative Procedure Act. The United Kingdom also has a tradition of public consultation via its Green/White Paper system. This concept is taking hold in India as well. “This provides yet another touch point that lawyers can optimize to influence policy,” Zaveri says. She explains:

As the administrative state, and Parliament, increasingly put out legislation for public consultation, that automatically enhances the opportunities that one has to influence the discourse. People write about it. People depose before Parliamentary committees on it. People make presentations, written and oral, to regulators about it. And lawyers are really well placed to do all of that.

The revolving door. The public and private sectors in India, and in particular government bodies and law firms, are becoming ever more interconnected through career mobility. In other words, individuals who work at or with regulators are leaving their offices to set up or join private practices. Likewise, professionals in private practice who want to work closer to policymakers are transitioning over to the public side. This revolving door creates familiarity, but it also suggests talent, knowledge, and institutional memory are shifting as well. This, Zaveri explains, creates a closer partnership between regulators and law firms:

When people leave regulators and set up their own private practices as lawyers, they are still often relied upon by the regulators to help the regulator draft better regulations because that institutional memory is there. Imagine, for example, we were colleagues at the SEC and I left to set up my own private practice, but you know that I have expertise working with a particular segment of the market—say, I’m good at identifying insider trading better than anybody else. You may still rely on me for drafting insider trading policy because you know I can do it well. The revolving door increases the interface between the administration and the private sector, and that creates tremendous opportunities for lawyers to influence policy discourse.

With the rise of a market-based economy comes a general increase in regulatory agencies, which in turn creates opportunities for interaction with the administration.

Bhargavi Zaveri

In saying all of this, it is worth noting that the term lobbying is somewhat taboo in India and traditionally viewed as synonymous with corruption. Zaveri notes that lobbying has historically been received with mixed feeling throughout the world, including in developed democracies. (Indeed, U.S. and U.K. law firms often apply other labels to what are functionally lobbying practices—things like “public policy” or “legislative and drafting” or “public consultations,” among other descriptors.) On one side, lobbying can be seen as an extension of citizens’ rights to petition their government. On the other side, it risks being co-opted by the powerful, the rich, and the corrupt. “India has had instances in the past where the media has exposed professional agencies being engaged by businesses to influence political candidacy,” says Zaveri. “Because of this, the term lobbyist remains taboo in India today, and thus people are not comfortable with the label.” Although perhaps Indian law firms have not yet developed the same degree and sophistication of lobbying practices as in the United States or the United Kingdom, they may well adopt a similarly careful approach in marketing their services. As Zaveri writes in her paper, “How India’s Corporate Law Firms Influence Legal, Policy, and Regulatory Frameworks”:

[Lawyers] were, however, equally unanimous in their apprehension of being perceived as lobbyists. As such, many interviewees qualified their policy impact by emphasizing that policy-level changes resulting from their advocacy initiatives benefited an entire industry as opposed to a particular client.

Access points in the formulation of law and policy

Taking a step back, it is important to note that India’s system of government is not altogether dissimilar to the U.S. or U.K. contexts. India is a federal democracy with an executive and a bicameral legislature consisting of an upper house (Rajya Sabha) and a lower house (Lok Sabha). Within this system, Zaveri notes that there are numerous formal and informal touch points where lawyers can access the policymaking process. One formal channel for influencing legislation is through the public comment phase of a draft bill, known as prelegislative scrutiny. This practice of prelegislative scrutiny, while not historically widespread, is beginning to take hold in India. This means that for many pieces of legislation, there is a phase of public consultation with reference to a draft bill that is publicly accessible. Whether to argue the interests of a client or an industry, lawyers, law firms, and other organizations can and often do inform the process during this phase by submitting their comment or by deposing before parliamentary committees and subcommittees. However, feedback and expertise do not guarantee impact, and these formal means of influencing policy can run into political obstacles depending on where they are in the legislative process. Like any other public comment on a draft bill, there is no requirement that the lawyers’ advice be taken or their suggested changes be implemented.

For much of India’s history since independence, the public’s interaction with policymaking was limited and government entities were thus viewed as distant and inaccessible to the private sector.

While formally interfacing with the legislature is one method of affecting the national lawmaking process in India, the rise of the administrative state provides another slate of options for corporate lawyers to affect policy. Through her research, Zaveri found that the primary access point for lawyers (and others) to influence policy is at senior levels of Indian bureaucracy—officials who have passed the highly competitive Indian Administrative Services Exam who are the core day-in and day-out officials within government.

There are numerous and nuanced ways in which this interface between lawyers and bureaucracy might play out, but broadly speaking there are two possible types of interactions: direct and indirect. Law firms might be recruited directly by ministry officials to draft policy or sections of policy based on their practice area expertise, knowledge of a particular sector of the market, and industry connections and experience. But apart from working directly with the government, law firms also interface with government indirectly through industry associations. These organizations often advocate policy positions to government audiences, using the expertise of their members just as their members use the vehicle of the association to accomplish policy goals.

Meanwhile, trends are developing that work to amplify the rate and impact of those law firm–government interactions. For much of India’s history since independence, the public’s interaction with policymaking was limited and government entities were thus viewed as distant and inaccessible to the private sector. In the last two decades, however, there has been a concerted effort on the part of the Indian government to establish a more open, collegial relationship with the business community. Another recent change concerns something called the Right to Information Act, another watershed in India’s move toward more transparent and responsive governance. In the same spirit of public consultation that has been taking hold elsewhere in lawmaking, government websites now include draft policies and discussion papers that intersect with the interests to law firms and their corporate clients.

These are just a few of the broad dynamics that are bringing corporate lawyers into contact with government. Increased public participation in both the lawmaking and policymaking processes has opened the door to law firms to formally advocate for the interests of their clients, their industries, and society as a whole. The proliferation of Indian regulators has multiplied the number of access points corporate lawyers and firms have to influence policy, and the accelerating interchange of talent between government and law firms is tightening the ties that bind the public and private sectors, facilitating more meaningful interaction between the two.

Of course, there are other incentives for law firms to get more involved in the policy and lawmaking processes. “There is also a strategic benefit to this increased participation,” notes Zaveri. And while for many, this symbiosis may trigger that same ambivalence as the term lobbying, it is not necessarily a bad thing. Zaveri explains:

If law firms participate in forming regulation, yes, they are certainly getting ahead of the curve when it becomes law. This participation might help them form practice areas because they already know the thought process underlying the law and their involvement in the policymaking process becomes their calling card for existing and future clients with respect to that practice area. For example, in 2016, India saw a new comprehensive bankruptcy law being enacted, and the law firms that participated actively in the process often use it as a calling card for their bankruptcy practice now that the law is operationalized. And I don’t think it’s a bad change. It’s a good thing that people who had experience in the credit market space participated in the bankruptcy lawmaking process as well.

Increased public participation in both the lawmaking and policymaking processes has opened the door to law firms to formally advocate for the interests of their clients, their industries, and society as a whole.

But there is something else at play—a larger implication of how the Indian corporate legal profession is evolving. Marc Galanter, a professor at the University of Wisconsin-Madison, once made a distinction between two types of lawyers in the American legal profession: the service lawyer and the strategic lawyer. Service lawyers are the traditional lawyers arguing before a court, focused on the specific claims and facts of the case. Strategic lawyers, rather than viewing their client’s interests as just a component of how they operate in the courtroom, view litigation as a component of how they service their client’s longer-term interests—alongside many others. Zaveri argues that what her research on Indian law firms and state policy demonstrates is that the Indian corporate legal profession is shifting from the service type to the strategic type, just as was seen in the United States.

New Legal Think Tanks

It is not just law firms and in-house lawyers that are getting involved in the policymaking process. We are now also seeing an increase in the formation of nonprofit think tanks specifically staffed and run by lawyers. As one example, the Vidhi Centre for Legal Policy, a nonprofit company, was formed in December 2013 with the explicit goal of using legal expertise to improve the drafting of Indian law. Unlike many other Indian policy-focused think tanks, the vast majority of Vidhi’s personnel are trained lawyers. Vidhi’s first government assignment had to do with the Public Procurement Bill. Since then it has assisted in framing the Insolvency and Bankruptcy Code, the Aadhaar Act, and amendments to the Companies Act, among a slew of other legislative work. It has even helped draft differential pricing norms under net neutrality guidelines issued by the Telecom Regulatory Authority of India. In an interview with the Times of India, Arghya Sengupta, the founder of Vidhi, suggests that there is a void between good legal research and framing of legislations in India. “A particular problem that exists within the governance framework is that good policy ideas don’t often translate into good legislation because lawyers and policymakers don’t talk to each other. There is nothing special about us…Policy and law is a new area, and there are very few people doing high-quality work in it.”

The in-house counsel revolution

Beyond law firms, this shift is also observable elsewhere in the Indian corporate legal profession; namely, in the general counsel of corporate legal departments. In a previous issue of The Practice (The Changing Role of the Global General Counsel), we measured the extent of the so-called in-house counsel movement (see breakout box below) based on a series of in-depth, semi-structured interviews and a comprehensive survey directed toward general counsel around the world—all conducted by the Center on the Legal Profession. One of the six key metrics used to measure the movement is the participation and influence of general counsel in the public policy sphere. In other words, increased clout in policy debates would suggest that general counsel are gaining more influence within and outside the profession. In the United States, there is ample evidence that suggests general counsel are taking part in larger public policy discourse. To take a recent example, the general counsel (not the CEOs or government affairs chiefs) of Facebook, Twitter, and Google all testified before Congress on their companies’ roles in the 2016 election.

To study and test whether a similar policymaking impact was occurring in India, the Center completed more than 70 interviews with Indian internal counsel and collected a survey sample of responses from the general counsel of companies that together constitutes nearly 30 percent of India’s total market capitalization. Their responses provided, among many other insights, a fresh readout of how Indian general counsel influence and interact with policy.

Table 1. Participation of Indian general counsel in public policy

Data was collected from a wide range of companies, including large Indian conglomerates controlled by an individual promoter or family (business groups), Indian state-owned enterprises (SOEs), Indian companies that are neither business groups nor SOEs (nonbusiness groups), and foreign multinationals operating in India (FMCs).
Data was collected from a wide range of companies, including large Indian conglomerates controlled by an individual promoter or family (business groups), Indian state-owned enterprises (SOEs), Indian companies that are neither business groups nor SOEs (nonbusiness groups), and foreign multinationals operating in India (FMCs).

While the responses to these questions are lower than what one might find in the United States, they confirm findings in research that suggest general counsel in India are taking on a bigger and more active role in policy. Indeed, during the interview portion of the research, one prominent general counsel remarked that whereas he used to spend 30 percent of his time in Mumbai, 30 percent in London, 20 percent in New York, and 20 percent in Delhi, he is now spending 50 percent of his time in Delhi and the rest spread across Mumbai, London, New York, and elsewhere. In this way, Indian in-house counsel are experiencing many of the same trends as their private practice counterparts with respect to policy formulation moving more into the focus of their responsibilities. Put differently, we see Indian general counsel shifting from service lawyers to strategic lawyers.

Measuring the in-house counsel movement

Supporters of the in-house counsel movement typically advance three types of arguments to justify a greater role for internal lawyers: an economic argument, which holds that strengthening in-house legal departments will lower legal costs; a substantive argument, which holds that internal lawyers will give better legal advice than outside lawyers because of their more intimate knowledge of the company’s business and culture; and a professional argument, which holds that inside lawyers are better positioned to be the guardians of the company’s corporate citizenship and long-term interests and values. In “The In-House Counsel Movement,” we offer six interrelated metrics by which to assess these claims:

  1. The size of in-house departments
  2. The credentials and demographics of the lawyers working inside these departments
  3. The general counsel’s relationship to, and degree of control over, outside counsel
  4. The internal standing, jurisdiction, and authority of in-house lawyers
  5. The professional standing of internal counsel in the profession as a whole
  6. The participation and influence of general counsel in public policy debates

A new role for the future

This increased influence over the policymaking process is yet another signal of the shift within the Indian corporate legal profession from so-called service lawyers to strategic lawyers. This is particularly relevant when contemporary debates, such as the debate over the Aadhaar program, often require deep understandings of legal and related issues. “Lawyers bring a lot to the table when dealing with these issues,” Zaveri says. “Apart from having great analytical skills, they are used to being challenged all the time—challenged in court, challenged in negotiations. This allows them to think through all the perspectives of a given proposition and counsel it on objective, meritorious grounds.” In this way, there is a societal benefit to this shift toward strategic lawyering when it informs and enhances the policymaking process. As for the future of Indian lawyers in the policymaking process, Zaveri suggests that their influence is only going to expand. “I think the state in India is always capacity starved,” she notes. “So, there is always a demand for help, and I think lawyers fit into that space very nicely.”