The battle to build a diverse, highly skilled workforce, particularly at the leadership level, is continuing around the world – and India is no exception.

Female representation within the Indian legal profession is strikingly low. At present, only three female judges (of 31) sit on the Supreme Court of India, and only 6% of high court judges are women.

46% of those surveyed in Monster’s Women of India Inc study felt that there was an obvious perception that women cannot put in the same hours as men in the workplace. Remarkably, only 72% of men surveyed felt that both men and women ought to receive equal opportunities at work.

Although India ranks fifth lowest in the world in having females in leadership roles according to Women in business: beyond policy to progress, a 2018 Grant Thornton report, this figure has risen from 14% in 2014 to 20% in 2018.

But progress is gradual.

Workplace gender and cultural bias

The prevalence of scepticism regarding a female lawyer’s professional capability and counsel is reflective of gender bias at several levels, with female lawyers often labelled as ‘aggressive’ or ‘unfit’.

A high-profile example of this came in 2012, when comments made by a high court judge caused outrage throughout India. Justice Bhaktavatsala of Karnataka High Court was reported as saying that an unmarried advocate arguing a matrimonial case was unfit to argue, as she was an unmarried ‘spinster’:

‘Family matters should be argued only by married people, not spinsters. You should only watch. Bachelors and spinsters watching family court proceedings will start thinking if there is any need to marry at all. Marriage is not like a public transport system. You better get married and you will get very good experience to argue such cases.’

Following a successful petition, Justice Bhaktavatsala was removed from sitting on family matters.

But institutionalised biases remain: an inherent social prejudice or ‘glass ceiling’ subsists for females wishing to advance in the legal field, including in-house. The Women of India Inc study found that 47% of women reported an inherent view that, once married, women were far less serious about their work. And other stereotypes persist.

‘Today, in India, we’re still discussing “Does she have a voice?” and “Should she be taken seriously?” in the workplace,’ says Preeti Balwani, general counsel for India at The Kraft Heinz Company.

‘One of the most critical things that women face is the fact that stereotypes interfere with them being taken seriously.’

She adds: ‘They also judge you based on your appearance – they believe that a certain type of appearance denotes that a woman may be more invested in her appearance than her work.’

Maternity and demanding work-life balance

With the work day – and perhaps night – split between client meetings, case preparation and court hearings, the life of an Indian lawyer, whether at the bar, bench or in-house, does not readily sync with the demands of raising a family.

‘A major challenge would be managing perceptions and the unconscious bias people have towards flexible working hours. For example, when women return from maternity leave,’ explains Shelly Kohli, assistant general counsel for South Asia, Middle East and North Africa at Levi Strauss & Co.

‘Despite being on call 24 hours a day, seven days a week, we still feel pressured if we have to leave early or come in late, whether it’s because of childcare or any other commitment. I also feel that there is a challenge in being perceived as high potential working flexible hours – this whole stigma around working only when you’re visible is a very big challenge that women lawyers continue to face.’

‘Whilst hiring a woman, management consider if she’s going to get married and have children in the near future,’ adds Balwani.

The Women of India Inc study found that 46% of women felt that taking maternity leave would lead to a view that they would also quit, with 59% describing the transition back to work as challenging. This was due to various reasons: unaccommodating executives, pressure to leave the company and their commitment to work being in doubt.

But, in 2017, the Indian government modified the 1961 Maternity Benefit Act to increase the length of maternity leave from 12 to 26 weeks to females with fewer than two surviving children. While on maternity leave, a female is entitled to ‘maternity benefit’, a fully paid absence from employment to take care of a child. The amendment also included ‘work from home’, and crèche provisions for companies that employ 50 or more employees.

‘I was thrilled when the 2017 maternity law amendment was finally passed – I think it’s a welcome step,’ says Kohli.

‘These changes actually position India as one of the most progressive countries in terms of providing maternity benefits: enhancing maternity leave from 12 weeks to 26 weeks enables women to combine their professional and personal life successfully without jeopardising their health or job security. I believe there are surveys that suggest that 25% of women lawyers actually forgo their careers after childbirth. These amendments address this challenge quite a bit – it also addresses having crèche facilities and ability to work from home, and I think this will eventually show demonstrable results in the form of more and more women employees coming back to work after maternity leave and helping the retention process.’

But not everyone is uncritical of the changes.

Says Zia Mody, founder and managing partner of AZB & Partners: ‘My thoughts on the 2017 maternity leave provisions are that it provides women with the safety net, which creates a good deal of comfort to them. I think the problem for employers is that they will have to pay six months and if, after that, a woman does not return to her workplace but joins a competitor, well – that’s that!’

Additional financial burden on employers could mean that some corporations are reluctant to invest in female employees, considering maternity leave and other associated benefits as wasted resource.

According to Balwani, there is still more work to be done.

‘The 2017 maternity leave provisions are an improvement on the previous law, considering that the previous law was very rudimentary. The new law has increased the amount of weeks, so without a doubt it’s a step in the right direction. Is it comparable to the maternity leave provisions in countries like Norway? No. We need to look around and see where we stand on the global platform – why is a mother in India at a disadvantage against her peers across the world?’

Gender pay gap

A gender pay gap exists whereby women in India earn on average 19% less than men. According to a Monster Salary Index Report, this gap increases to 30% for highly-skilled occupations. The report also showed that 60% of the working women in India surveyed felt discrimination at work and a third of those felt that they were not easily considered for leadership roles. However, of those surveyed, 71% of men and 68% of women felt that gender equality should be a prime concern within their organisation.

57% of Indian businesses surveyed by Grant Thornton in their 2018 Women in business: beyond policy to progress report, indicated that the Indian government ought to be proactive in its approach and do more to tackle the issue of gender disparity in the workplace and business leadership at a statutory position. Yet, of those 57%, only 31% stated that businesses and government should work in conjunction with each other in the domain of gender disparity.

The introduction of The Companies Act in 2013 made it compulsory for all listed and large public companies with a share of 100 crore or a turnover of 300 crores to have a minimum of one female director on their board in India. This was the first obligatory quota for female board members, covering all fields of employment, including legal.

‘Any kind of regulation such as The Companies Act 2013 requires compliance, and people take compliance very seriously. There has been a significant shift between what started off as tokenism versus actual seriousness about compliance. Some of this was already existent for public listed companies, so it’s still early days, but there is a move in the right direction. It’s too early to judge its success yet. I think if you give it another five years, we’ll be able to really sit back and evaluate whether the Act was successful in driving inclusion,’ says Balwani.

But some, like Kohli, argue that enforcement needs to beefed up:

‘Whilst this law, certainly on paper, helps improve inclusion and gender diversity in boardrooms, I feel much ground really needs to be covered. There has been data compiled by PRIME Database which has pulled up corporate reports filed by companies as of December 2018. It suggests that 118 of the top 500 national stock exchange listed companies do not have an independent female member on their board,’ she says.

‘These are not very promising numbers; I’m hoping that companies will implement this more seriously and that would really help women coming into more senior positions in companies. I think it’s a compliance issue and I would like to see how the authorities would react to this.

The Equal Remuneration Act 1976 requires the payment of equal remuneration to both male and female workers. However, eliminating discrimination in the workplace has proven to be a difficult task in practice.

‘We haven’t yet gotten to the conversations around the considerable pay gap. I think there is a very high presupposition that women don’t understand finance and that we as a gender don’t know how to ask for what we deserve,’ says Balwani.

Despite government legislation, representation of women in the in-house legal community is lagging behind. Female lawyers in top roles, including in-house, are still the exception rather than the rule. While overt discrimination towards women in the legal, and in-house, field has somewhat decreased, a common view is that this progress has largely been restricted to box-ticking.

Legislation alone cannot force headway, and organisations committed to genuine change and development concerning diversity within the workplace have aligned their policies with a genuine belief that diversity is essential for the advancement of society.

Ravi Singhania (RS): how do you pick lawyers for your company?

Nandita Khurana (NK): When picking an outside counsel for our company, we are looking for a firm with an established track record in the practice area in question. We also want them to have an understanding of our industry, business model, company culture, and objectives. In addition, we are looking for lawyers who are genuinely concerned with safeguarding our interests and who can provide practical legal solutions suitable for our business.

RS: What are your service expectations from outside counsel?

NK: In essence, we expect them to be a strategic adviser to the company. We need counsel to provide a confident and well-thought-out solution on the issue concerned. In short, don’t present me with the options; provide me with a solution backed by your logic and experience.

RS: What kind of fee arrangement do you prefer?

NK: Billable hours are a passé. We are living in times of software and apps which provide real-time information and decision-making capabilities for live, short-term and long-term problems, as well as their financial management. We expect outside counsel to work as an extension of our in-house team and thus, expect more certainty and predictability in billings.

We prefer working with most of the outside counsel and law firms who offer alternative fee arrangements, options involving blended hourly rates, fixed fees, retainers, yearly fees, contingent fees, discounts and value-added services. We work on tight budgets and expect our law firm partners to help us manage those legal budgets.

It’s important, too, to find ways to offer more services in that money. For instance, an external legal counsel instantly becomes the apple of my eye if you are updated about my company through reading of our annual reports, news and social media. Be my trusted associate and keep an eye on what might positively or negatively affect my business to get that brownie point.

RS: Do you have different categories of law firms for different types of matters?

NK: We are living in an era of specialisation. Today, you have experts for every ailment. I see the trend is shifting towards boutique law firms that are experts in their fields and area of specialisation, be it infrastructure disputes, intellectual property, competition law, capital markets or aviation.

Therefore, we do prefer experts who have successful track record in their practice area and have experience of advising companies in our sector. It provides a better perspective, as well as saving us billable hours and a lot of spade work to make them understand what we do. A boutique firm with similar clientele in my sector has a better handle on my business, industry trends, competitors and challenges.

RS: What is your process for finding new external counsel?

NK: Word of mouth is one of the most important reference criteria when hiring outside counsel. We have our own due-diligence procedures, like looking at the ratings of legal directories like The Legal 500 and, at times, checking their references from other in-house counsel who have used their services.

Cold calls and legal articles on email are helpful if they are relevant to my particular area of focus, too. Spamming my inbox won’t help either of us. Know your client (or prospective client) before sending that newsletter or requesting for a meeting.

RS: Do you prefer local lawyers more than global firms?

NK: It depends on the kind of assignment and the complexity of matter involved. For multi-jurisdictional matters like M&A and antitrust approvals, we prefer firms which have resources, coordination skills, networks and management capabilities in the chosen countries and jurisdictions.

For local compliance involving both contentious and non-contentious matters, it is always better to hire locals.

RS: Lawyers have been receiving a lot of flak from the judiciary and the users of their services for using too much legalese. What is your take on the lawyer who does not speak legal language?

NK: I always prefer plain talk over legalese in legal opinions. I do not hire an outside counsel to spend hours reading a 20-page memo full of sections and clauses. Keep the language simple, so that I can also explain it to my management and board of directors who are not lawyers. In short, don’t send me an email with an attachment where you could have explained your point in a few words and then bill the company for a memo to client. In my experience, a lot of times I have felt that it was very much possible to explain a legal position in plain English in ten bullet points than a twenty page memo.

At the end of the conversation, Khurana asked where outside counsel feel a lack of support from in-house teams, to which Singhania replied:

For me, the general counsel is the best resource I have about a company. They understand the ecosystem of the business, the board of directors, and the management. We expect them to tell us everything which is relevant in helping them legally. Do not hide vital information and have faith in us.

We do not expect GCs to be the legal experts, after all, that is why we are there! But during the conversation and discussion on legal advice and the recommended course of action, at times GCs do not like to be treated like a novice and explained basics of legal position and procedure. When we assume they know it all, at times we’ve found that they were unaware and expected hand-holding. We are there to answer your question and no question is a stupid question; please interject and ask us as much as you want to know.

You mentioned that you look at ranking bodies when hiring a law firm. Therefore, after years of dedicated service, please do give out a positive recommendation to the legal directories and don’t ignore that email from the researcher.

Lastly, I have mouths to feed and maintain the momentum of the work being done for you. Plus, we do not have big budgets and cash flows like big companies. We are tirelessly working to ensure preventive compliance for you, strategies to save you millions in disputes, and managing your mergers and acquisitions. The least that we expect is being paid on time. If we are important to you, it should be communicated to the finance teams as well.

Also, trust me that I have the best interest of your company in mind, so trust my recommendation when I bring you the bad news and you should consider settlement.

India’s distinct cultural environment has given birth to a rich music scene that is fast-growing and ever-changing, but dealing with its gargantuan population and slowly developing telecommunications infrastructure may be key to a lasting legacy.

The average internet user in India spends 21.5 hours streaming music every week – nearly four hours more than the average listener elsewhere. But translating this enormous consumer base into strong bottom-line figures remains a challenge for the industry across the board.

Relatively speaking, India was an overdue entrant into the digital space for music. The late penetration of smartphones, combined with inadequate digital infrastructure made data consumption a premium service only available to the wealthy elite.

That changed in 2016, when telecommunications giant Reliance Industries and its mobile network subsidiary, Jio, entered the market. Following a significant investment by Reliance Industries into fibre-optic networks across India in the preceding years, the launch of Jio brought with it significant disruption to the domestic mobile landscape – namely, all inclusive and unlimited mobile data.

‘Reliance came in, gave away free data, and immediately changed the consumption habits of the average Indian user,’ says Ali Sachedina, general counsel and head of business affairs at JioSaavn, a domestic digital streaming service and itself a subsidiary of Reliance Industries.

‘Before Jio launched, people in India would send a WhatsApp message, turn off their data and turn it back on to receive a message because it was insanely expensive for the average Indian to have a proper data plan. After the launch, whether you were a doctor or a rickshaw driver, people were able to live stream on their phone – whether that was music or video – giving rise to companies like our own.’

Change the Tune

The sudden availability of free data in India had a dramatic effect on the digital environment. From a standing start in 2016, India now ranks as the largest consumer of mobile data globally, helped by the fact that it also boasts the lowest prices for data consumption.

‘This has given billions of consumers access to the internet and legitimate sources of content, which is really driving the legitimate growth of digital music in India,’ says Sankalp Dalal, head of legal at Zee Music Company.

Established two years prior to Jio’s data revolution, Zee Music Company had already snapped up a large chunk of licences for Bollywood music, but saw marked growth following improvements to the availability and accessibility of mobile data.

Similarly, JioSaavn also finds its roots in Bollywood music. Created as the result of a merger between JioMusic, the digital music arm of mobile operator Jio, and Saavn, an entertainment distributor focused on Bollywood and entertainment, JioSaavn is the strongest domestic player in India, accounting for 37.8% of the streaming market. Crucially, the 2018 merger combined two key business strands vital for streaming businesses: licences and users.

With 104 million monthly active users and the rights to more than 50 million tracks, the combined entity boasts a wealth of perhaps the two most important factors in the business. Those two factors are also inextricably reliant on the ability of the company’s counsel to both establish and navigate the complex web of licences. JioSaavn works with thousands of different record labels and music publishers, requiring constant negotiation by the business and its counsel in a constantly evolving environment.

‘There are three key stakeholders in any licensing endeavour: the finance team, who model and understand what our obligations are from a revenue perspective; the content team, who handle the day-to-day operation of the labels and licensors; and the legal team, who need to align everyone’s wants and needs in the agreement,’ explains Sachedina.

‘Legal needs to work closely with the other teams when forming and reviewing the agreements. We have to consider the various implications, especially when it comes to the revenue element and the limitations on a product or service. We have to ensure that everything is aligned, before effectively expressing that to the licensor.’

As the music industry in India evolves, achieving alignment across the business functions will become increasingly imperative. Like in many growth industries, short-term profitability – particularly when the entities are well funded – is often cast aside in favour of prioritising factors that will lead to long-term revenue growth.

In the digital streaming space, expanding the userbase and catalogue of licences are the top priorities. But, unlike in other industries, the nature of licensing – particularly in a global environment in which other jurisdictions have already reached maturity – means that costs are a major consideration from the outset. Compensation is generally determined in terms of the number of times the property is streamed, meaning that for each user listening to music, there must be an associated model for contributing towards the costs incurred.

‘Margins are getting smaller. A fair amount of our revenue goes to pay content licensors, both on the music publishing and on the sound recording side. It compels us to look at other avenues of revenue generation and ways to add to our bottom line,’ says Sachedina.

‘As legal, we need to look at everything from a risk management, compliance and value-enhancement standpoint. If there’s a new pricing structure we want to address, we have to look at it through a legal lens and how it affects us in our other endeavours. This requires us to have an absolute knowledge of the business.’

Face the Music

On a global level, as the music industry shifts towards a business model predicated on mass consumption via digital streaming – one where artists are compensated based on the number of times their properties are played – the potential of India and its 1.3 billion people is vast, with international players taking notice.

‘In the past, we were able to convince labels and licensors that India operates with a very unique set of circumstances – the userbase is different and their consumption patterns are different,’ explains Sachedina.

‘Now we’re getting to a point where the labels and licensors want us to operate on the same level as other streaming services around the world.’

Driving that change has been the entrance of major global players into the Indian market. Earlier this year, Spotify and YouTube Music both officially came online in India, armed with deep pockets, expansive licences and best-in-class technology – as well as different value propositions for consumers.

‘If there’s one challenge that any music streaming service or content licensor has, it’s YouTube. You can’t argue with its scale or that their rates are so low – after all, it’s hard to compete with free,’ says Sachedina.

‘The challenges from a content perspective are large, but it’s primarily a pricing problem. The issue is with the Indian community itself: getting them to attribute value to a platform or service that delivers music. The difficulty lies in getting your average Indian user to see value in a premium service because, quite frankly, if it’s free – why should they pay for music?’

It is this struggle to compete with ‘free’ that has dominated the conversation around digital music services, particularly in India. Services like JioSaavn offer their platform for free, but give users the option to pay a subscription fee to gain access to a premium service – unlocking exclusive music, offline features and higher quality streams, in addition to eliminating advertisements.

Out of the 150 million active music streaming users in India, those who subscribe to fee-paying platforms make up only about 1% at present.

‘There are about one million paid subscribers, meaning there’s huge growth potential there. But they need to figure out a model which appeals to the Indian consumer. In my view, streaming services in India will need to find a hybrid between subscription and advertising models in the long term,’ says Dalal.

The challenge comes in convincing consumers that the premium option is worth paying for. The widespread accessibility of music on platforms like YouTube and the sizeable amount of pirated music create substantial problems in encouraging consumers to pay a fee for the additional benefits.

‘The traditional model of the free user and the paid user was that you could download music and listen to it offline. But as connectivity increases and improves, the advantage is lost,’ says Vijay Basrur, founder of OK Listen!, a digital platform for independent artists to earn money through streaming.

‘I think a lot of businesses are now trying to have a subscriber model drawn by original content, or an equal system around music which could extend further than any existing pure streaming services. Businesses like JioSaavn, Gaana, Amazon or Apple – everything is part of a broader system play. They have the benefit of bundling the music together with other services, which helps them by not allocating the entire subscription costs.’

Beating the Black Market

Shifting consumers on to platforms for the legitimate and legal consumption of music is a potential game changer for the industry. Both premium and freemium revenue models capture market share that was previously lost to piracy, bringing new sources of revenue into the mix that were unattainable before the advent of streaming.

‘In 2008, music was primarily consumed on phones via Bluetooth and pirated tracks. Outside of that, the industry was purely physical media sold at an incredibly discounted rate – the markup was set at a bare minimum, yet there was still rampant piracy,’ says Sachedina.

‘Piracy was tackled really effectively by Bollywood, where there was a physical product: DVDs, CDs or tapes. They would literally have police going out and shutting down pirate stores.’

The fact that music piracy has primarily moved to the digital realm does make tackling it a more involved process, but Sachedina points to the success of shutting down illegal cricket streams as evidence that it’s a solvable problem.

‘There’s nothing bigger in India than cricket. Hotstar deliver that content exclusively and have been very effective in stopping pirate cricket and World Cup streaming through a combination of both legislative and judicial orders,’ says Sachedina.

‘Music has yet to be given that sort of push, but that is changing. One of the reasons is because music industry organisations that represent us haven’t, until recently, made it a focus. At Saavn, we’ve been proactive in speaking to labels and helping them understand that piracy is a real issue. Not only this, but it’s an issue that, if properly addressed, would be of benefit to everyone.’

Cracking down on piracy has the ability to have transformative economic effects.

In 2014, it was estimated that 99% of all music in China was obtained illegally. Subsequent action by Chinese authorities resulted in millions of songs and a swathe of websites being taken down overnight, as well as commitment to ongoing enforcement.

Since then, China’s music market has transformed. Tencent Music, the music streaming arm of Chinese internet behemoth Tencent Group, counts 644 million monthly active users across its platforms and controls more than 70% of the market. Since its 2016 launch, the business has been spun off and floated on the New York Stock Exchange, with a $24bn market cap.

‘All we have to do is look at China, who were trendsetters with what they did. The proof was in the pudding: there is immense value in tackling piracy,’ says Sachedina.

‘We’re still missing an effective judicial and legislative protocol to address piracy, but the Indian government has been incredibly receptive. They’re getting ahead of the curve, but it will require a joint effort with the industry bodies in India. We need to find a solution that maintains neutrality – not being draconian by implementing a stringent anti-piracy regime that impedes personal freedoms or access to content but, rather, a balancing act.’

While a series of legislative responses will take time to materialise and be enforced, positive signs are being seen from the judiciary in getting on top of piracy.

‘The Indian courts are being proactive,’ says Dalal, noting that even small procedural changes can have a marked impact on the workload of counsel.

‘Recently, the Delhi High Court passed an order so that when infringing websites have been blocked, content owners only need to go to the registrar of the Court to then block any mirrored sites. You no longer need to keep going back to court to ask after an injunction for affiliated sites.’

Clear as a Bell

Barely three years on from Jio’s data revolution, India can now count itself as one of the most attractive markets for digital streaming globally. While revenue models and legislation are yet to reach maturity, the rapid development of infrastructure and subsequent change in consumption habits are causes for optimism.

‘I think we’re only just scratching the surface in terms of music’s potential in India, as now there’s an audience and an ability to reach them very easily,’ says Basrur.

‘There is an issue with revenue: monetisation can be particularly hard, especially when you deal with independent artists like we do. But we have already seen a massive change. If we take ten years as a measure of time, we have witnessed a massive shift occur in just the last two years.’

‘At present, music in India is getting around five billion streams every month. I expect that to rise to at least ten within the next couple of years, opening more opportunities for businesses and customers,’ adds Dalal.

The pace of change that has occurred in India, combined with the only very recent entrance of major global players, means that a maturation and sophistication should be expected as the industry settles in. But in order to capture that potential, ensuring that the regulations and legislation keep pace with innovation will need to be a priority.

‘We are moving at an accelerated rate, but I’m not sure that all of our infrastructure from a legal, compliance and regulatory point of view is in order; at least in a way that’s best for the Indian user,’ says Sachedina.

‘I do think that’s going to take a year or two to get ironed out and dealt with properly, but it’s getting there. I’m very optimistic about the future of streaming and content delivery.’

LuxLeaks, Cambridge Analytica and the Panama Papers are just a few examples of recent scandals propelled to the public’s attention by whistleblowers. Workers are increasingly speaking up against corruption, fraud, sexual harassment and harm and, in the process, preventing scandals from progressing and even saving lives. Yet some have encountered retaliation or have simply been ignored.

But this is set to change.

Piecemeal action by governments over recent years had already started to strengthen whistleblower (also known as ‘protected disclosure’) laws. However, the European Union’s agreement in April 2019 to implement comprehensive new whistleblowing legislation across its 28 member states marks a significant step change – one which will have practical workplace consequences beyond Europe.

In particular, those multinationals applying a one-size-fits-all global whistleblowing policy will need to decide whether to apply the EU’s higher standards beyond Europe. Considerations will include issues such as whether to make reporting channels available to contractors and suppliers, broadly defining protected disclosures, as well as requiring investigation and the provision of feedback to disclosers within three months.

In this age of the whistleblower, employers failing to provide easy access to confidential reporting mechanisms or handling disclosures and disclosers inappropriately risk problems escalating, reputational damage and, increasingly, significant sanctions for breaching whistleblowing regulation.

Recent legislative changes to whistleblowing protections

In 2018, the EU listed ten member states with comprehensive whistleblower legislation in place (Ireland, France, Hungary, Italy, Lithuania, Malta, the Netherlands, Sweden, Slovakia and the UK), much of which has been introduced or strengthened over the previous five years (see table on p51).

Other countries, including non-EU states, have announced new whistleblowing legislation or are in the process of implementing change. For example, Switzerland, Poland, Slovakia, Norway, Qatar, the United Arab Emirates and Australia are all strengthening existing regulation or seeking to introduce new rules on protected disclosures by some sector-specific employees or more broadly. In Asia, Japan’s Consumer Affairs Agency is considering amendments that would see the effectiveness of Japan’s current whistleblower protection laws improve, as well as increase in scope. The changes are expected to go through the legislature in late 2019. Hong Kong has seen increased calls for general whistleblowing legislation following several corporate scandals, and it is only a matter of time before the government responds.

The United States has a long-standing, complex system of whistleblower legislation that includes federal statutes as well as certain state law regimes. Recently, there has been an increase in whistleblowing activity which, is likely to continue. The US Securities and Exchange Commission (SEC) reported that it awarded more dollars to whistleblowers in 2018 than in all prior years combined. The SEC also has a long-standing policy challenging confidentiality provisions in employee agreements that have the potential to chill whistleblowing activity – a practice that has impacted the drafting of employee-related agreements even for companies not subject to SEC oversight. In a recent development, the US Supreme Court unanimously extended the time for bringing claims in certain cases under the False Claims Act.

The EU Whistleblowing Directive

In April 2019, the EU Parliament agreed to a new directive to protect workplace whistleblowers, revealing breaches of EU law in a wide range of areas including public procurement, financial services, product safety, and consumer and data protection. The law must be approved by EU ministers, after which member states will have two years to make their national rules compliant.

EU states with limited whistleblowing protections currently, such as Germany, Spain and Austria, will be required to introduce wholesale change by 2021. Many others, including Ireland (regarded as having comprehensive rules already in place), will also have to act. For example, widening the scope of protection to volunteers, suppliers and contractors, and introducing a requirement on employers to investigate and provide follow-up reports to disclosers within set time scales.

Practical implications – beyond Europe

Workplace whistleblowers play a significant role in uncovering wrongdoing and alerting employers. Despite this, managers can be wary of whistleblowing channels, fearing malicious reporting.

However, these concerns should not cloud the case for instituting a robust whistleblowing system and embedding a culture of speaking up in the organisation’s DNA. Without this, the fear of suffering retaliation will have a chilling effect on whistleblowers, depriving employers of the opportunity to investigate and address issues away from the glare of publicity and the attention of both government bodies and the courts. A 2017 EU survey found that 85% of respondents would rarely report wrongdoing, fearing negative repercussions.

The changing legal landscape, spearheaded by the EU Directive, requires employers to review existing whistleblowing procedures for compliance. At the same time, employers should take this opportunity to assess their own whistleblowing culture. Like with GDPR, which forced businesses to take an honest look at their data handling and protection policies, this latest EU legislation will prompt many to review key elements of their whistleblowing systems – including leadership, commitment and accountability.

After all, good governance should encourage workers to speak up internally – for the sake of the company’s health, longevity and financial wellbeing.

GC: What differentiates Royzz & Co from its competitors?

Mahua Roy Chowdhury (MRC): Our firm represents the next generation of technology-oriented law firms, wherein our lawyers are either engineers or scientists. In view of this, our team goes beyond the books and is able to provide advice that is in line with the rapid pace of change in technology.

We have designed and built our own portfolio management and tracking software based on the amalgamation of our technical knowledge and wide industry experience. We provide use of these proprietary systems as a value-added service to our clients.

GC: Which practice areas do you see growing over the next 12 months? What is driving these changes?

MRC: The market dynamics have changed with the advent of technology. Disputes related to ownership of technology, violation of digital licences and infringements in cyberspace are on the rise. We are seeing an array of new legal issues arising that were not foreseen in the past. We are also anticipating a rise in infrastructure-related transactions.

Being at the forefront of innovation, we are helping institutes and scientists to monetise their innovation by introducing another vertical to our practice area, which is the IP valuation and monetisation service.

GC: What is the main change you’ve made in the firm that will benefit clients?

MRC: We have expanded our practice areas to provide a full spectrum of legal services to our clients. We have inducted partners and associates in practice areas such as general corporate, India entry, tax, real estate and litigation.

We have opened offices in Delhi and a second office in Mumbai with complete litigation support, too.

In addition, we have changed our process of billing and now use either lump-sum payments or commit not to exceed fees calculated on the basis of our billable hours as a norm. The exception being only in long-haul contentious disputes, wherein we rely on billable hours. This assists our clients to budget and allocate resources accordingly.

GC: How is technology changing the way that you interact with your clients and the services you can provide them?

MRC: Since inception, our firm has been a technology-oriented law firm. We are striving towards becoming a paperless office, too.

We provide web-based access to our clients to review their portfolio and receive additional notifications for deadlines. We also subscribe to several software solutions that assist us in effectively managing our client database, deadline tracking and monitoring the various portfolios.

GC: Can you provide a practical example of how you have helped a client add value to their business?

MRC: Technology being our forte, we often cross-refer our clients and their products. We also update our clients and introduce them to the latest technology, and advise them on integrating the same to augment their reach or improve their products and services.

GC: Are clients looking for stability and strategic direction from their law firms, as opposed to purely legal counsel?

MRC: The role of law firms has gone through a metamorphosis. Clients are asking questions that are no longer limited to the legal aspect, but instead have widened to include business decisions as well. Law firms have to don the legal as well as the business hat to provide the kind of advice that clients expect from us.

GC: What is the firm’s primary focus over the next three years?

MRC: In the next three years, we intend to focus and solidify our position in the new practice areas introduced. We are focusing on empowering our team to become holistic lawyers who can provide out-of-the-box advice to complex situations.

2018 was a good year for Indian entrepreneurs. The world’s third-largest start-up ecosystem saw its base expand by 12-15% and investor funding grow by 108% year-on-year, as well as a rise in late-stage funding – sufficient to give a leg-up to unicorn status for eight companies, according to a 2018 report by NASSCOM and Zinnov Management Consulting, Indian Tech Start-Up Ecosystem: Approaching Escape Velocity.

But just a few years ago, things weren’t quite so rosy. Despite the dizzying success of e-commerce wunderkind Flipkart (sold last year to Walmart for USD$16bn) and its ilk, investment plummeted from $1427m to $583m between Q1 and Q2 2016 (according to CB Insights, October 2016) and businesses started to go under.

‘Investors were investing like anything. The majority of the time it was e-commerce and consumer services, and everyone was putting in money. The field became saturated, start-ups were giving big discounts to gain customers. And that model doesn’t work, because you are not creating customer loyalty,’ says Saugat Dutta, project manager at EY heading the Startup Himachal PMU.

‘The success parameter of a start-up was judged by how much investment it had secured, so it was a case of: “That start-up is very successful.” “Why?” “Because they secured millions of dollars in “investment”. Now, when I read a start-up story, the story is “Who’s that start-up which generated this much revenue within these many months?” – not the amount of the investment they raised.’

‘With any kind of herd mentality, you often will see a lot of people putting in money speculatively,’ adds Dibyojyoti Mainak, consultant GC of Mobile Premier League, a mobile gaming app start-up.

‘You started seeing cases where investments were made that were often valuing companies at far more than what they should have been valued at, even investing in companies without really seeing a business behind it. It became less about the product and more about a certain template of success within the market. So, if one content company has raised money, then you would expect every other content company to also raise money,’ he explains.

But rather than complete collapse, what followed was a process of maturation – building on established tech talent within the country, but with a renewed focus for strategy, sustainability and a global business plan to support those eye-catching ideas.

Laying the groundwork

Significantly, the government’s endorsement of the sector has mushroomed, evidenced by the creation of Startup India in January 2016. The flagship initiative was established to encourage start-ups that meet its criteria (and register) with benefits such as financial help with patent filing and fast-tracked examination, self-certification under certain labour and employment laws, and an income tax exemption for three years. In addition, Startup India has formed a 10,000 crore fund of funds to make downstream investments in venture capital and investment vehicles that target start-ups, promoted the creation of incubation centres and labs to foster both innovation and R&D in education and industry, as well as relaxed public procurement norms which previously excluded start-ups.

‘India has been an agrarian economy for decades. The new government [formed by Prime Minister Narendra Modi in 2014] wanted to bring about a shift to a knowledge-based economy. We have been exporting engineers and doctors abroad, so instead the goal was to see if we could use the skills and knowledge base here in India to achieve economic prosperity,’ explains Dutta, who works with state governments on initiatives to support and develop start-up ecosystems.

In order to drive a culture of nurturing the innovation ecosystem to the grassroots level, central government devised a framework to rank states on their efforts to support innovation along several verticals, intended to create competition and encourage each state to take ownership of its start-up environment.

The central government’s push for ‘Digital India’ (which promotes the use of innovative technology in government) and ‘Make in India’ has led to some cross-pollination with state government initiatives. For example, the government of Andhra Pradesh, has started to put all land records on a secure, blockchain-based platform, and is also using drone-based solutions for state security and checking municipal infrastructural compliance. In addition, it utilises Internet of Things solutions for inspecting the cleanliness of government-supported school toilets. Such initiatives have begun to create opportunities for start-ups to cater to technology requirements, facilitated by relaxed public procurement rules allowing state governments to order directly from technology-focused start-ups. The companies gain user validation and also secure a state government contract, boosting their credibility with private sector customers.

And access to innovation is expanding beyond the usual hubs. The city of Bangalore is synonymous with tech-based innovation – it is home to 25% of India’s tech start-ups, with Delhi and the National Capital Region (NCR), and Mumbai housing 21% and 14% respectively, according to the NASSCOM/Zinnov report. But the same report notes that an increasing presence of tech incubators, tech parks and affordable work spaces is allowing tech start-up hubs to flourish in cities such as Hyderabad, Chennai, Pune and Kolkata, with additional growth in tier two cities such as Jaipur and Chandigarh.

But, success has not been unqualified, according to some.

‘For you to be a start-up, you needed to get a certification of sorts from, inter alia, one of the recognised tech institutes in the country, or have a registered patent in your name already,’ says Mainak.

‘That essentially cuts out 90% of everybody in India, because we are not a very patent-savvy nation, not to mention [the fact that] the patent regime in India is quite restrictive. You can’t expect a 23-year-old or a 25-year-old who is still in college, mostly on parental money, to have the financial wherewithal, or even the knowledge, to do something like register – it’s a very complicated process. That was a specific problem with the start-up definition – but that’s something the government’s already worked on solving. New notifications brought in in February 2019 relaxed many of these rules, and now require, among others, just a write-up justifying how you are innovative/will create jobs etc,’ he says.

‘Secondly, the Indian bureaucracy is a behemoth which answers to multiple interests/powers. It is not centralised enough for the central government to simply push policy and expect that all departments will follow. I’ll give you one classic example: the government has said that labour and employment compliances are cumbersome, which they are. So they said, “Ok, everybody until about three or five years in, you can self-certify.” Very good. Except then, they brought in a new tax law. Tax is covered by one department and employment is covered by a different department, and what that means is that taxation doesn’t follow that logic, so overall, the number of compliances you have to do has not reduced sizeably. If one goes down, another comes up – it’s a little bit like fighting like a hydra.’

Clearing the way

To exist in this space means grappling with a very particular set of challenges.

At the intersection between India as a jurisdiction and start-ups as an ecosystem is the issue of safeguarding ideas: in India, the process for obtaining patents has been historically sluggish, while time is of the essence for a burgeoning start-up economy working to reach its full potential. Recognising this, Startup India has introduced expedited patent review and rebates on filing fees.

‘India’s IP system has to catch up, people are not getting patents granted for five years in some instances. They file and wait. And, in the mean time, the technology loses its edge. So still, we are shaky, we cannot hope to compete in the international market that way,’ says Dutta.

‘The very restrictive licensing and the restrictive patent and IP regime that we have in India makes it tougher for you to protect your brand. And that’s the first challenge I see: brand protection. Because most start-ups don’t take that very seriously and this is why everybody has a copycat problem. Essentially, there’s somebody else who’s trying to do the exact same thing and often even copying your name,’ adds Mainak.

‘The gaming sector, where I am now involved, is very litigation prone. And it’s not just litigation, it’s prone to action from various different government departments who don’t necessarily understand the business. There’s a lot of confusion regarding whether this is entertainment or whether this is sports, and how we want to see it. Those kind of regulatory challenges are there for many sectors.’

Despite much regulatory relaxation for start-ups, penalties for non-compliance in some areas can be prodigious. Nevertheless, labour and employment, Goods and Service Tax, Shops and Establishments Act and Registrar of Companies compliance, as well regulatory requirements to combat sexual harassment, can be areas that those at the most nascent stages might be tempted to neglect.

‘Contrary to how the situation was about 15 or 20 years ago in India, when it was easy for somebody to miss out on certain compliances and still the law doesn’t catch up with you, today it has become extremely stringent. The law will catch up – if not tomorrow, definitely three years down the line. The fallout of not doing compliance is way higher than the money that you spend getting compliance done,’ says Janhvi Pradhan-Deshmukh, lead legal counsel at Startup Box, a firm that provides legal, consultancy and secretarial support to start-ups.

‘For bootstrapped start-ups, it’s a little difficult to convince them of certain things. With certain innovative business models, the law is not exactly made for them and, as such, they think that it’s ok to not do certain compliances because they don’t fall exactly under the ambit of the law. But in a start-up, time is more important than money because the start-up world is so dynamic – it changes so frequently, so fast – that to catch the trend, to catch the market is very important. You can’t be wasting time on answering legal notices and replying to queries.’

Running the farm

In recent years, India has experienced a cultural shift – doing away with past attitudes towards entrepreneurialism, and rethinking the concept of failure.

‘When someone wanted to start his or her own business you were looked down upon. If you had not secured good marks and were not academically qualified, or had not got a good job, that’s when you were starting something of your own,’ says Dutta.

‘But now, having a start-up – even having a failed start-up – has started to become a badge of honour.’

This has attracted not just young and ambitious minds, but also experienced executives into the field – and start-up adviser Pradhan-Deshmukh has found that her role is to handle not only legal issues, but to understand the psyche of all types of co-founders.

‘The young generation, they are fresh out of university and have an amazing bunch of ideas. Unfortunately they are a little blindsided by the Flipkarts of the world and they cling to that: “Oh, I’m going to become a billionaire in a short period of time when I sell off the shares in my company, and I will then become a serial entrepreneur and I’ll use that money to invest somewhere else.” It doesn’t work like that. When you come to me with that kind of idea, you have already made up your mind to sell your own baby before it’s actually born,’ she says.

‘But there’s another set of co-founders who have worked in huge corporates at high levels and then they decide, “Ok, I don’t want to work for someone else anymore.” These are the people who are mature. They understand the importance of compliance and legal, they understand the importance of having the right professionals on board – having chartered accountants, a company secretary, a lawyer. Unfortunately, they are extremely fixated on certain things – they sat in senior positions in their companies and they think that they can treat the new business in the same way, or they can tell professionals what to do and what not to do. But again, it doesn’t work like that because the start-up world is extremely different to a company which has been in the market for a hundred years.’

Home-growing innovation

Despite the burgeoning popularity of entrepreneurialism at both ends of the career spectrum, Dutta believes there is more work to be done to fully embed a culture of innovation, particularly among schools and the academic community, where the teachers themselves must be trained to develop a more innovation-friendly mindset.

‘The government of India has started funding to create small tinkering spaces called Atal Tinkering Labs (ATLs) in schools. So the infrastructure is getting there, but who will actually give the soft learning part, the teaching part? That’s missing. The hardware is sitting under lock and key because no one is actually there. In the colleges, also, the curriculum needs to be revised and the professors need to lead from the front in being innovative and entrepreneurial in the endeavours. We will soon have bullet trains, but our curriculum is still stuck at steam engines!’

Incubators, accelerators and innovation spaces are popping up across the country, but although the tech scene is flourishing with an abundance of talent, some believe that a world-leading innovation marketplace is a little way off.

‘Many Indian start-ups are essentially copycats of foreign start-ups. These are not home-grown basic ideas, they are essentially very good copies of what is already listed in the market,’ says Mainak.

‘We are aiming to be on par with Silicon Valley or, now, China. China is now a very serious contender to become a global start-up giant. Everyone is now heading to China because of a lot of unique innovations – they used to replicate, now they are innovating. India is still stuck at the replication stage,’ Dutta adds.

‘Things are coming, but I wish the growth trajectory would be steeper, because I am amazed by how China is doing – they are first pushing money into R&D and now it has started bearing fruits. India needs to do that; India is not pushing money into R&D. Mostly, we are trying to replicate and customise ideas to our socio-economic contexts. I don’t think it’s a bad thing because, of course, it’s generating money and employment, and is innovative at a basic level. But to have an edge over other countries, you need to pursue radical innovations and aspire to be inventive.’

A lawyer in the mix

For most embryonic companies, absorbed by passion for a new idea and the pitfalls of establishing a company, hiring in-house legal support has not been the first priority. But Mainak advocates greater diversity on core teams – including lawyers.

‘In India, the legal system is extremely pyramidical. We have a phenomenon called “grand lawyering”, where essentially there are a very, very small group of senior advocates who corner most of the influence. You will often not have access to these guys when you are a very young company and you can’t afford their rates, which then means that established clients will always have an advantage going into any kind of litigation. This is why it is important for most start-ups in India to ensure that they never get into litigation.’

However, he adds: ‘Most still wait till their first run-in with the legal system or bad/unfair contracts – in other words, whenever the first “crisis” hits.’

In a fast-growing company, investment in company culture and good policymaking often falls by the wayside, and a toxic environment can emerge, incubating issues that further iterations of the organisation will have to face. And neglecting the detail now can cause future headaches, or even financial hits.

‘When you try to raise your third round of funding, or later on when you are listing and you are trying to raise a huge amount of funding and they are trying to do a due diligence assessment, a lot of these issues come to the fore. At this point, it’s a huge pain trying to solve all of these problems – maybe four years down the line the company realises that it hasn’t signed a non-disclosure agreement, or a pensions agreement, or even employment agreements, in some cases. That is when they would bring in somebody legal,’ says Mainak.

‘It’s not the best strategy, particularly with a system that is so regulation-heavy (India remains one of the most regulated economies in the world), so you would do well to have a legal mind right at your board stage, right when you are trying to strategise. Lawyers tend to bring logic and structure, and are able to play devil’s advocate.’

For start-ups rushing to market, or scaling fast on a shoestring budget, it can be tempting to assume that a lawyer will do nothing more than hamstring a fledgling business. But, when the realities of compliance, process, litigation, contract negotiation and management, brand protection and strategy development converge, there is a fertile world of opportunity for advisers to bring a critical eye to proceedings, and weed out potential problems early on.