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Anand Bhushan joined IT major, Cognizant Technology Solutions, in 2007 as the company’s (APAC) legal head. Over the last six year, he has built the legal team to a size of 70. In this interview with Bar & Bench, Anand shares the story of the in-house team’s growth, what it means to be an in-house counsel and his thougths on Indian law firms.
Bar & Bench: So its been, what, 6 years now?
Anand Bhushan: Five years and eight months.
Bar & Bench: Are you surprised at the growth of the Company?
Anand Bhushan: Well I wouldn’t say I am surprised because it was always on a high growth trajectory. I mean the story was always about how Cognizant was ahead of its peers. And we have continued to jump up the Fortune 500 rankings each year. So I am not surprised.
But the legal team going from a one person in 2007 to approximately 70 today – that was explosive growth. I don’t think that would have happened without the support of the management. It was a conscious decision. It was not an accident or to support existing lines of business. It was for all new areas of law.
Bar & Bench: And how did you manage the work with the smaller team way back in 2007?
Anand Bhushan: Well, a lot of it was law firm driven or done out of other geographies. But you know, we had to weigh the costs. I mean you go to any law firm and some have ways of calculating a real estate deal in percentage terms. So quite honestly, that was surprising. I mean why would they talk in terms of percentages? It is a service industry where billable hours are becoming obsolete in the market, it is all based on business outcomes today.
We decided that there were so many experienced real-estate lawyers. We could get them, and they had multi-lingual capabilities. Say we were acquiring a property in Pune or in Chennai, we could utilize their services. They could do that diligence, do it in-house, do it at a fraction of the cost and most importantly, with 2 to 3 times the level of ownership and responsibility because of the employment relationship. If something were to go wrong 2 or 3 years down the line, that lawyer would still be with us.
Bar & Bench: So how much of your work is outsourced to law firms?
Anand Bhushan: A fraction. [We do] real estate, data privacy, intellectual property in-house; of course we still have a panel of lawyers. For example, we still can’t file a patent in North America directly. We need that final leg support of a law firm in India, which has a tie up with a law firm in North America. So in one sense, that “last mile connectivity” is missing – we still need the physical support of other law firms.
Certain areas like M&A, we still use a good panel of top tier law firms here. But compared to what it was 3 or 4 years ago, a fraction of the work must be going out. Probably close to 20-25 per cent of the work.
Bar & Bench: And how do you choose the law firms?
Anand Bhushan: I wouldn’t say that this is the “lazy” response, but the initial response is to go to the top 5 law firms. So that was the go-to strategy even 3 years ago. It made sense; if you got a good law firm, the chances of mistakes taking place were less and hence you were fairly secure. But if you have been following this closely, the number of break away law firms in the last two years….the kind of comparable level of service at a much more competitive billing rate – those are all options we are willing to explore. We have done deals with many of the younger law firms as well.
Bar & Bench: And what has your experience been with them?
Anand Bhushan: You know firstly, you are getting access to named Partners, the decision makers. So the accessibility is much more. The pricing is better. Where it is lacking, is that they all claim to be full-service law firms but they are not. They can’t be. So if you do your research, and identify the area of specialty of the break-away firm it is well worth it. Of course, you have to do your homework. Also, it is good to balance work distribution between the new firms and the more established ones. So you get the name, you get the expertise and you save on the cost as well.
Bar & Bench: Do you think the rates offered by these newer firms are sustainable in the long run?
Anand Bhushan: That is an interesting question (pauses). Until the established players have a clear route to partnership, a clear route to recognizing the rainmakers and the dealmakers, this is a phenomenon that, sustainable or not, is bound to happen.
People are becoming very suave. The type of law schools have changed, the quality of lawyers is improving. So as long as you don’t have clear career paths, clear performance management matrix within established law firms, this phenomenon of breakaway law firms is bound to continue. Everyone knows his worth in today’s marketplace. So whether it is sustainable or not, everyone is going to toss their hat in the ring and play the game.
And again, I am not a person from a law firm. I am just watching the trends from afar.
Bar & Bench: What is the basic difference that you see between in-house counsel and a law firm lawyer?
Anand Bhushan: So there has been an increasing trend, especially in India over the last five years, where the in-house role itself is changing. Even five years ago with the big players, if anyone would approach the Legal Manager, he would take that same matter to an outside lawyer. You would be surprised at how prevalent that is. It was just a role of the postman where you would still go and rely on a law firm, take their advice, educate your business team. That paradigm, of that “postman role”, is changing.
You see most of the top companies now – the sophistication of their in-house team, across the table is astonishing. They can manage their labour matters, real estate, HR, IP etc. without any reliance on the outside law firm. So when you say it is an in-house role, the full product from A to Z is done in-house, with a higher quality. Now this may not be because they are better lawyers (although I would like to believe that) but because it is their bread and butter.
If you ask me specifically, I think the major demarcation goes into the relationship between the lawyer and the company. It is an employee-employer relationship rather than a client-attorney relationship. So while in a law firm, you may have a variety of customers doing similar work – if you see the billings of most law firms, it is targeted at tax, M&A, PE etc. A lot of the billings from general corporate advisory has either stagnated or gone down. Because all of this has shifted in-house.
Bar & Bench: So what does your team do?
Anand Bhushan: Let me give you the break up. Let’s take the IP team for instance. They are doing some real cutting edge work. How many lawyers in India are also engineers? You are dealing with such a small pool of people. These specialized skill sets are in addition to the general employability issues – do they have a command over the language, do they have the right educational background and aptitude etc. So we have 10 lawyers who do the IP work related to licenses, patent filings, business models, almost consultancy type work.
I would say nearly 35 lawyers, or perhaps even 40, do core contracts. That is the primary work. For every client deal, only our lawyers are the authorized signatories.
Bar & Bench: That is a lot of faith.
Anand Bhushan: The way the company works, is that if Cognizant does business, it will do with accountability, in compliance with all applicable laws and with high levels of work ethic.
Then we have a team of 3-4 lawyers who only do compliance. And we are in the process of automating this. Take for example – this building. I don’t know what are the laws involved. For instance the lift license, electricity supply, etc. So we actually did a complete due diligence. And to keep Cognizant running, there are two thousand six hundred state and national legislations in terms of compliance itself. This has to be mapped to various HR and management groups and it was one of our flagship projects this year.
Bar & Bench: Sounds like a huge exercise.
Anand Bhushan: It was massive. But how else can we operate? Otherwise, one day you will get a notice from one regulatory authority. Some official in some department will say that this or that cannot be done. Believe it or not, when you go to the top law firms and ask them for a checklist of all laws that apply for running a business and tell me what I need to do to be compliant – no one can give you that information. Of course they have a well-oiled machine when it comes to due diligence say pre-merger or pre-IPO. But companies have not really reached that kind of maturity and law firms are also struggling in that regard.
What we have done is to have each list of compliance measures tracked by a specific user and if that user has not done that within the stipulated time, it gets escalated to his/her manager. And from there on, even that Manager is not doing it, it comes straight to the top-level management. And we take remedial measures. So that is overseen by 3-4 lawyers.
Then we have a team of 3-4 lawyers who are only doing data privacy work, another cutting edge area. In India, it only came into being in 2011 with some recent amendments.
Bar & Bench: How important is it for an in-house counsel to possess business acumen?
Anand Bhushan: It is the requisite. Otherwise, you are finished. The business teams will have you for breakfast (laughs).
Lets take an example of contract negotiations, say licensing of IP. Now most lawyers will speak in the language of license restrictions – this is my license grant, this is what I want. And the answer will end with, “This is company policy. When we acquire a license, these are my terms.” That type of discussion will get you nowhere.
So what our lawyers do is before a call, we discuss which are the territories in which the license will be deployed, how many users will there be, duration, termination clauses. So that is the level of homework. When we talk about the “business mind”, our lawyers will know the geography, the numbers etc. It is much more sophisticated kind of a conversation.
Bar & Bench: Biggest challenges as in-house counsel?
Anand Bhushan: Well the challenges keep changing. A few years ago, it was attrition – we were expanding and expanding. Some lawyers thrive on diversity, advising clients on data privacy one day, then real estate the next etc. It comes naturally to some of them. And some people find it too much. This is not to discredit anyone; it just is a different style of functioning. And it took some time for me to figure this out.
I always believed that you have to mold yourself to the company, to your manager’s likes and dislikes. But it is only when you manage a large enough team that you realize, if you are a good manager then you are molding yourself to your team. It sounds very clichéd but that was a challenge for me – to realize that I have to provide different management styles for different people. Some people, if you pay too much attention, will call it “micro managing”, others will call it “training” and they will like that attention. So you have to change your management style.
Bar & Bench: One to seventy in less than six years and you are still looking to expand? How do you plan on handling the quick growth?
Anand Bhushan: We made ten hires this year. Now in the Chennai office, we have not more than 30 lawyers while around 20 are in Bangalore. Then we have people in Gurgaon and Hyderabad.
Bar & Bench: How early on in their career at Cognizant can someone interact with the client?
Anand Bhushan: It just depends on the lawyer’s aptitude. We have had some exceptional hires, a year out of college, who are now dealing face to face with not only our business teams but our clients as well. If there is a call at 2 or 3 in the morning, they will take it.
And how do we not become a bad employer? By saying that if a lawyer has worked till 3 in the morning, come into the office later. Manage your own hours. Don’t burn yourself out. You have flexi hours, you should use it.
Bar & Bench: Moving completely away from Cognizant, you have had a fairly interesting career yourself. You graduated in 2002, and then you started your own firm?
Anand Bhushan: Well, I was already working with a law firm in my fourth and fifth year of college. I worked under prominent tax and company lawyers. Of course I did not get to represent clients but I was working full time. Our attendance requirement was one or two hours of class a day, and it was intentionally done like that. You could attend the first two classes, and for the next two classes, as long as the professors knew you were at work, you were given a free pass.
Let me also tell you that I am extremely patriotic about the Ambedkar Law College. The college was phenomenal to students who performed well. Just to give you an idea, when I went for moot courts to Vienna or the US, they gave each student one lakh twenty five thousand rupees to cover all expenses. In the local rounds, they would cover the photo copying expenses, attendance. It was a very good environment to excel in and do things like work day and night.
Bar & Bench: And what was that experience like? Were you taken seriously?
Anand Bhushan: I was but.. (pauses) let me put it this way – my monthly salary was fifty percent of my mobile bill. And this is a reality. So no matter how seriously you are taken or how much value and knowledge you are getting, it is a two way street. I am also building value for the firm I am working for and I feel, till now, especially in the litigation field, the two way nature of the equation is perhaps not respected enough. They think you need to “earn your stripes” and “Oh I have slaved through it and so now you have to slave through it”. This is fine, they are entitled to their views.
Bar & Bench: And how do you end up starting your own firm?
Anand Bhushan: Honestly, the commercial viability of being a litigator at the Chennai Bar was a tough task especially in the early years. I thought I might as well start my own corporate practice.
Lawyers do have a fondness for the media and I also used to teach at the School of Excellence. Anyway, Jaya TV hired me in their final year and right after graduation, they were my first client. And this was a great fillip. They are a very well known company in Chennai.
Two other companies, Bharat Matrimony.com (the Comsim group) and [industries major] FL Smidth, hired me on a retainer basis.
Bar & Bench: How did you manage that?
Anand Bhushan: Some of the retainer fees quoted by established firms, to be quite honest, seem to be disconnected from reality. You take two tier-1 firms. For the same subject matter, you will get quotes with a difference of 60-70%, which I feel is shocking. I think a lot of these firms work on a bit of client ignorance and if you know what [law firms] are quoting, you can make a very competitive offer.
Bar & Bench: Last question, do you think inhouse will start handling litigation as well?
Anand Bhushan: Well, we have a lot of restrictions in the Advocates Act so I do see companies having empanelled litigators. Plus in India you still have that Senior Counsel mindset so I think the litigation practice is safe. Even with this foreign lawyers “threat”, litigation is the safest and holiest grail of them all.
This interview was conducted in June, 2013 in Chennai. Bar & Bench would like to thank A. Nandakumaran for the help and assistance.