Law is a system of rules that are enforced through governmental institutions to regulate behaviour. Being interpreted or redefined, law is always changing – it is never static. Law is a mirror to know how individuals in a society relate to one another, their values, what they consider worth pursuing in life, and how they define their own personal freedom. Social norms, those unwritten rules of acceptable behaviour, are changing globally over time, such as attitudes toward gay marriage and marijuana legalisation. But sometimes the norms clash with formal laws, and the result is counterproductive for all. While laws that conflict with norms are likely to go unenforced, laws that influence behaviour can change norms over time. Since law is meant to maintain order in society, it becomes imperative for it to evolve and amend itself in order to cater the needs of changing equations.
India’s business legal framework is also not an exception. Enormous changes happened in the last few years in corporate governance, compliance & enforcement, intellectual property laws, competition law, labour laws, SEBI guidelines, disclosure norms, auditors, mergers & acquisitions and other investment laws. As a consequence the concerns about good corporate governance have increased phenomenally – and all of us realised that the transparency in corporate governance is essential for the growth, profitability and stability of any business. Because of the volume and complexity of regulations around running business, compliance is a major challenge for many organisations. The greatest challenge an in-house legal department has to face today is managing legal issues in an ever-increasing regulatory environment while at the same time trying to control costs
It is critical for entrepreneurs to have basic legal knowledge. While startups innovate to disrupt society in general, and laws of the land have to catch up to them, there are specific legal aspects that every entrepreneur should be aware of. To ensure better compliance, it is important to raise awareness of the legal environment to business leaders, who are under an increasing personal liability for things going wrong.
It is always tough for a General Counsel to define parameters to measure commercial value added by his team, and difficult to create a measurement system suitable for the legal function. But this is the time for all in-house counsels to consider a fundamental rethink of their status function and role. It is important that the in-house legal teams should change its approach and strategy to the rapidly evolving business environment to add commercial value to the business.
After closing an important contract negotiation with a prestigious government agency, some of my colleagues mentioned that they kept forgetting that I was a lawyer during discussions. I took this as a compliment that I was able to transcend my self from a corporate lawyer to a business counsel! We’re here to help the company achieve its commercial objectives while complying with its legal obligations. For me, the importance of the legal department being commercially aware is important; that’s both of the business and of the business environment in which we operate. That enables the delivery of high-quality and commercially-sound legal advice so that business leaders can make good decisions.
© suresh babu kalarikkal