#Interviews: Naveen Raju, General Counsel of Mahindra & Mahindra

Varun Marwah June 8 2017

Naveen Raju, a graduate of the National Law School of India University, Bangalore, is the current General Counsel and Executive Vice President at Mahindra & Mahindra.

Raju started his career with ACC in 1996, after which he was at Crompton Greaves for a short stint. Thereafter, he joined Reliance Industries Limited in 2000 and served as the Legal Head of of its oil and gas business for nearly 15 years, before moving on to Mahindra in November, 2014.

In this interview with Bar & Bench’s Varun Marwah, Raju shares his thoughts on the (continuously) evolving role of an in-house counsel in India, their involvement in the policy-making process, and more.

What made you choose in-house right after law school back in ’96?

When I started off in 1996, the law firm world looked very different from what it is today. I had an offer then to join Crawford Bayley, which I did consider, but chose to move in-house for the reason that it gave me better financial and career stability. I did have a fair sense then that I would be happier working as part of a corporate setup, even if it meant moving away from the mainstream practice of law.

How has the role of GCs evolved over the years?

I have witnessed the role of the GC change drastically in the last 20 years that I have been in the profession. When I started in the mid-90s, the in-house counsel role for most companies in India was aligned with the Secretarial Department. The Company Secretary doubled up to meet the legal needs of the company and more often than not, companies would have a single law firm which would support all of its legal needs.

But this trend started changing, especially with liberalization in the early 90s, and the influx of foreign companies into India. The model followed by most foreign companies had integration of legal resources and talent within the organization. This practice started to percolate to Indian companies as well.

However, it would be wrong to say that there were no companies with strong legal teams in the 90s. There were a few exceptions, which set the bar really high. Take Hindustan Unilever and ICICI for instance. They had very accomplished GCs, who in addition to their GC role, held multiple business responsibilities and executive positions on their Boards and remain role models to date.

Mahindra Corporate Office, Mumbai

Mahindra Corporate Office, Mumbai

How is the GC viewed in the corporate hierarchy?

The position of the GC within the organization is largely a product of the team that’s in place and the service provided to their business. What we’ve seen overtime is for corporate legal departments to expand their horizon to being significantly more than a post box for an external law firm.

What we’ve seen overtime is for corporate legal departments to expand their horizon to being significantly more than a post box for an external law firm.

Businesses look to their internal legal department to provide a complete service and to backstop all legal advice and support provided to them. They will not content themselves with being shown a legal opinion procured from an external law firm.

With this enhanced responsibility, the GCs hold very senior positions within their companies. The positions reflect the GCs’ involvement and contribution in executive decision-making within the company.

How big is your team?

We have about 50 lawyers within Mahindra & Mahindra, which is the flagship of the Mahindra group. But across the group we would be around 350-400 lawyers between the various companies that constitute the group. We have 9 listed companies including M&M and legal teams are attached to each of the companies. Even the unlisted companies have lawyers but the legal team at M&M supports legal requirements of the group companies as well.

We have about 50 lawyers within Mahindra & Mahindra, which is the flagship of the Mahindra group. But across the group we would be around 350-400 lawyers.

How often do you engage with law firms? Do you have an empanelment structure or is it on an ad-hoc basis?

We don’t have an empanelment structure; we appoint on an ad-hoc, need basis. We try to find where the expertise lies, and find the partner and the firm that we believe is best placed to support us.

I do not believe it is possible or efficient to completely replace law firms with an in-house team. However, I do think we can provide a better service to our business and bring in efficiency in the way we outsource work, by building a capable and appropriately staffed in-house legal team.

Of course, there’s a whole lot of work which we think we can better perform in-house, but that doesn’t depend on the complexity of the work alone; there may be some complex work which we believe we can better do in-house either because we have skills to deal with it or have dealt with it in the past or, it is very sectoral which requires a lot of business input. But mostly, we try to internalize work, which we are engaged in on a consistent basis.

Simultaneously, we try to bring in competencies of external counsel, but use them where we see the most value. So we’re not just sending a matter across to a law firm for them to start and finish it, but go to law firms for specific value added inputs. We try and work jointly with law firms so that we combine as a team to provide a cost effective and efficient legal solution for our businesses.

We engage with law firms frequently on transactional work. For instance, we wouldn’t have the bench strength to run a due diligence that involves a large data room. So if there were a significant amount of data, we would get a law firm on board. There maybe some transactions where we don’t use a law firm at all and we have done that several times in the past.

However for litigation, we always (and have to) use external counsel.

How often are you involved in litigation? Given the nature of your business, is it more consumer facing? 

Yes, that is reflective of the way we do business. We’re not very litigative, in fact we’re not litigative at all.

To answer your question, yes there’s a lot of consumer litigation that we are involved in also because we are a consumer facing business. We have litigation teams in all regions, and we see more volume in the North and the Western regions and less in the South and East.

What are your views on liberalization of legal market? Would it affect your choice of law firms?

I personally would like to see foreign law firms come in – it would be a good thing for the industry and us as clients.

We are, hopeful that these firms can provide us better rates and capabilities when they are located in the country. Also, I think it will improve the overall quality of services across the board, and the legal sector will benefit by it.

However, I do not believe the presence of foreign law firms in the country will change the basis of our decisions to outsource work, because our choice is mostly partner focused. Suppose there is an area in which we believe a particular person is very good, and that person is part of an Indian law firm, there’s no reason to go to a foreign law firm. It’s going to be driven by where the quality resides.

Suppose there is an area in which we believe a particular person is very good, and that person is part of an Indian law firm, there’s no reason to go to a foreign law firm

I think liberalization of the legal market is very good for the young lawyers who come out of law school looking to make a career in commercial practice. It will give them opportunities to grow based on their performance and certainty of earning a fair share of the success of the firm in a professional and transparent environment.

Given that most (if not all) industries face regulatory challenges, the professionals involved in these industries are best suited to provide solutions to these challenges. To that extent, are GCs in India involved in the policy making process?

That’s a very relevant question. That goes to the heart of the issue i.e. status of in-house counsel in India within the regulatory framework. And there is a big void for us in that regard – are we business managers or are we part of the legal profession? It is really important for us to get our due recognition within the legal community.

 

Even though we carry out a legal function within the company, our membership is suspended with the Bar Council. The Bar Council needs to recognize the role that in-house counsel play in today’s times. It would also need change in the law as it exists today, which is reflective of what I talked about i.e. how the role of the GC and in-house counsels have changed over a period of time. I am sure that business leaders in the Indian private sector will all vouch for the contribution in-house counsel make to their businesses and will support a case for due recognition within our fraternity.

Coming back to the point, once that recognition comes to the role of the GCs, there will be more of a platform for us and for the legal profession within the industry. But in spite of not having that yet, we are already seeing a greater role in the regulatory and policy making process.

Who better than an in-house counsel to appreciate and communicate the regulatory and policy level issues faced by business in a particular sector? If the government is making a policy on any issue and consulting business, I think it’s appropriate that inputs from in-house counsel is also part of the business’s viewpoint that is being put across to the government. And most companies have begun to recognize it and are taking steps to give in-house counsel that responsibility.

If the government is making a policy on any issue and consulting business, I think it’s appropriate that inputs from in-house counsel is also part of the business’s viewpoint

Your efforts towards establishment of a ‘hybrid structure’ at M&M have been applauded. Do tell us more.

This is a new structure that we have rolled out at M&M since I’ve come on board.  Typically, we have seen that in large organizations, lawyers are viewed as a sit-away corporate function. We play a large control role wherein we protect the interests of the company, so we’re like a watchdog, telling the business to do or not do certain things because we are protecting the directors, the shareholders and interests of the company.

If we want to bring real value to our business as lawyers, we need to function shoulder-to-shoulder with the executing teams instead of standing away and directing what can be done and what can’t be done.

The hybrid structure we devised was to allow in-house lawyers to integrate with business and to be recognized as business lawyers. So we have lawyers who do just that; who become part of the business and go work with them to help them in all their day-to-day activates.

It serves many purposes. Firstly, it creates camaraderie between the business people and the lawyers. They’re no longer looking at us as ‘trouble makers’ and see us as ‘partners’. Secondly, it also helps us identify problems at a very early stage or even prevent problems from happening and having to fix it later.

Also, we are proactive; we are giving the business ideas before they do a whole host of planning. So instead of telling them belatedly that there’s a problem after their having spent much of time and energy, we are there telling them in advance.

In addition to the business legal teams, who support individual business, we also have corporate level functional teams. We have: (i) an M&A team that supports transactional and corporate advisory work across the group (ii) a litigation team, (iii) an IPR team and (iv) a compliance and regulatory team.

In a way, we work like a semi law firm but encourage our younger lawyers to move between the various teams and achieve generalist skills in addition to business and functional capabilities. At the end of the day, when you look to move up the ladder, you should’ve had the opportunity to have worked around our various businesses and have a fair understanding of the drivers for each of the businesses.

At the same time, one should also have had the opportunity to do M&A, IPR, compliance and litigation roles as well. I personally believe litigation experience is extremely important for an in-house counsel because litigation is where an in-house counsel’s skills are most called on by senior management.

Would you recommend law students to join in-house right after school? 

I have spent my entire career as an in-house counsel. I do not believe I am any worse, but always recommend that law students upon graduation should spend a few years either as a corporate lawyer in a law firm or as a litigator before seeking out a career as in-house counsel.

I believe it is essential learning for fresh graduates before stepping into the corporate arena. There is no better way to understand how the practice works. It also equips young lawyers with the confidence that’s required to hit the ground running when moving on to an in-house role.

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