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At ICICI Bank for more than 15 years, Pramod Rao is currently the General Counsel at Citibank India. In 2012, he left ICICI Bank to join Indus Law, where he was in charge of setting up the firm’s Bombay office. In June of 2013, Rao left Indus Law to take up charge as Citibank India’s General Counsel. In this interview with Bar & Bench, he talks about his decision to take up law, the decade and a half he spent at ICICI, the changing role of in-house counsels and the future of the Indian legal industry.
Bar & Bench: Talk us through your initial years in the legal profession.
Pramod Rao: ICICI and Mulla & Mulla were amongst the offers I received at law school. I accepted Mulla & Mulla, but after a month I reached out to ICICI, as I was looking out for a different kind of experience in my initial days and ICICI was kind enough to renew the offer.
B&B: You left Mulla & Mulla within a month. What aspect did you not enjoy about working at the law firm?
PR: Again, what a person is looking for at the beginning of one’s career is subjective. Within the first 2-3 weeks at Mulla & Mulla I just decided to switch gears as I was looking for a different exposure and type of guidance. In fact, the Partner I was working with, Shardul Thakkar, was quite supportive of my decision and I continue to hold him in high regard.
B&B: And you were with ICICI for the next 16 years.
PR: I joined ICICI in August 1996 and worked there till April 2012. It has been quite a fulfilling experience. I think I was part of the growth of the organization and part of a momentum ICICI had. It was a career-fulfilling experience.
B&B: Slightly less than 16 years after you first joined ICICI, you went back to a law firm, Indus Law.
PR: I think after a while you start wondering ‘What are the new mountains that you can climb, what are the new challenges you can take’. At some level there was a desire to at least explore this question and I think this is the reason that took me to the law firm world.
B&B: And how would you describe your year at Indus Law?
PR: I would say it was a productive and fulfilling year. I moved in at a time when they rolled out the Mumbai [office] and was a part of bringing the practice to a scale we collectively decided on. Five or six of the Partners were my batch mates and that connect provided me with a good landing with Indus Law and the law firm circuit. A resident Partner is taking the Mumbai operations forward along with a second Partner. I have the highest regard for the practice.
B&B: So what were the reasons behind your decision to leave Indus Law and move back to in-house?
PR: As a Partner in a firm, you are as much an entrepreneur as a lawyer. Your role is to ensure you cater to the multitude of your clients’ requirements and, at the same time, manage revenue on an ongoing basis. Having been entrenched in a financial institution I did want to sink my teeth back into this world; I personally believed my career path was as in-house counsel. That is the reason I started to rethink if I preferred to be in a firm or return to the corporate world.
B&B: After working both as in-house counsel and as a law firm partner, what are the main differences between in-house counsel and a law firm?
PR: Ultimately a law firm is a business. When you are a Partner, you have a set of people who you are responsible for and so you must ensure it runs as a well-oiled machine. At the same time, it is not a business that advertises or can reach out to potential clients the way traditional businesses do. It is a noble profession that does not deny clients their requirements.
A law firm’s growth is clearly contingent on the network of people partners know and who will then invite them to speak on their behalf. Good law firms have the ability to ensure their clients make informed decisions by stacking up choices for their clients and say, ‘Well pick amongst them, it is your risk, it is your reward; these are the consequences of each of those choices.’
The in-house counsel is a partner to a business in making commercial calls, identifying issues that require an external view. An in-house counsel is a person who can articulate to the external world, particularly the law firms, handle adverse situations with the judiciary or the legal cases that come up and finally lay out a strategy within the organization regarding adherence to legal standards, legal compliance issues or regulatory standards.
B&B: How do you think an in-house counsel’s role has evolved over the last two decades?
PR: I would say it is far more acute, in terms of regulated entities and industries compared with general corporates. At the end, you are dealing with a piece of law. It is true for the telecom sector; it is true for banking, for the securities markets and so on. The evolution has been far sharper, stronger.
General counsels, or legal heads in various banks or institutions, have gained a lot of prominence over a period of time, earning them a seat on the table. A lot of strategic thinking, management decision-making, product rollouts, attending to adverse situations and so on, require strong legal advice and input. In the case of general corporates, I think the evolution has been slightly slower but indeed in the last 5-6 years this kind of stature has probably been arrived on the corporate side as well.
So for any regulated industry, you will probably see a prominent role for the general counsel. Many corporates also tend to combine the roles of a company secretary, a counsel and so on. To me it is a question of how that organization is framed or designed. In India, this is a position that has gained prominence within corporate firms in the recent past whereas internationally, general counsels have had a seat at the table for few decades.
B&B: Can you tell us about the legal team at Citi? How is it structured?
PR: We have a team of 17 lawyers including me. It is a tightly meshed team. We are all under one roof other than a set of 2 or 3 who are based out of Delhi. The broad divisions of the teams are the consumer side and the institution side. Both sets of people report to me.
B&B: Is there any pressure or inclination towards getting most of the work done in-house?
PR: Efficiency is the strongest parameter. While some things are better done under our roof, there are others that are better done at a firm.
B&B: What are the factors you take into account while choosing which law firm to engage?
PR: In general, a corporate or a bank would look at the track record of Partners and the kind of experience they have built over the years. There are some firms that have built a practice in a certain area. So there could be firms that specialize in the securities market, some specializing in the debt recovery aspect, for example. So you tend to identify the firm based on the need you have and whether they are amongst the experts in a given subject or field.
B&B: What are the biggest challenges you face with Indian law firms?
PR: I would say there was a point in time when, maybe, Indian firms did not have a grasp on what project finance or corporate finance meant. Also, in the mid-90s, there were only a handful of firms that catered to the litigation or the advisory markets.
I would say I have witnessed the emergence of firms in transaction services and firms have certainly risen up to this challenge and the evolution has been quite strong.
Can firms do more? I certainly think so. As you know, India has an under-exploited skill of the English language. But when it comes to documentation and advice, newer firms as well as, sometimes, even at the top-notch firms you do find errors. This is an area that needs improvement. Knowledge management and maintaining consistency in views a law firm takes also require improvements.
But really, Indian firms can withstand and even surpass foreign competition if the market were to open up.
B&B: If the market is opened up for foreign law firms, would your choice of lawyers or firms change?
PR: There would be no real change. We already work with a mix of international and local law firms.
If foreign firms do come enter the market, they will employ Indian legal talent from the existing pool of talent or by recruiting new law graduates. There are firms that say, “I want to grow in-house, inside my firm and then be available to clients”. To me, it might be a boost both to the legal education system and to existing firms. As I said I expect local firms to surpass new competition.
B&B: Your thoughts on the fees law firms charge?
PR: It is a competitive landscape. I think it is a question of both the clients’ requirements and what the transaction can bear in some sense, and whether this equation matches up with what the firm quotes as its cost. Do I expect competition if foreign firms come in? Yes. And I also expect more competition to drive down costs.
B&B: Have you seen a trend of law firms offering to move from hourly basis billing to lump sum fee?
PR: It comes down to how much is the available choice of counsels or law firms. It comes down to what is the need of the hour. For instance, if there are too many deals chasing too few lawyers, the price will go up. It is simple demand and supply. To me, this has driven the legal course over the last 2-3 years and not any particular trend.
B&B: Are the law firms cutting down on costs?
PR: I would say they have been far more competitive.
B&B: How has the banking sector evolved?
PR: In 1994 when new generation private sector banks got licenses, I think they had a huge transformative effect on the entire banking landscape. Public sector banks were rejuvenated also.
On the whole it has been a great India story in many ways. Consumers gained and the banking sector has grown manifold over time. On the anvil is another set of banking licenses. So I can only see banking as a requirement of the economy. There are many under banked areas, so financial inclusion is indeed the need of the day. Technology has been a big game changer. An example being the ATM. Citi was the first to launch the ATM in India and today the ATM network of banks are is very large.
B&B: You just mentioned the new banking licenses. Big corporate houses have applied for commercial banking licenses.
PR: I think infusion of more competitive elements within the system is always good. The agenda of the RBI is financial inclusion; to bank the un-banked areas. This is where banks are required to set up shop and those would be the drivers to growth. Only about half of the Indian population has access to formal banking, which means there is a huge number that has no access at all. So that is partly what they are hoping to drive through with these sets of new licenses. To me competition only rejuvenates and spurs innovation and makes us perform better for our customers
B&B: There is a perception that in-house counsels have a better work life balance than law firm lawyers. Thoughts?
PR: I think individuals shape how they want their work life to be. You can have a person in a firm who works 9 to 5 and probably does a very good job. At the same time you can have a person in a corporate who slogs for 20 hours and still has not got his work done. So to me it is not about a law firm versus corporate. It is finally what drives you as an individual in delivering what you have to within the deadline you are given. Clients can give deadline to law firms so maybe they feel their lifestyle is eschewed. But inside companies, we have various constituencies to address and deliver to also. It is a question of how individuals deal with and what their work requirements are.
The second is a philosophic answer. We know that our country requires a huge amount of effort to come out from where we are. There is poverty and challenges as an emerging economy. If our generation, the previous generation and the next generation strive hard, maybe the generations after us will have a good work-life balance.
B&B: Last question, why did you take up law?
PR: At the time it gave me the largest breathing room and time to decide what I wanted to do. I enrolled for the 5-year law program at NLSIU Bangalore versus the three-year programs of a B.Com or a B.Sc. It was enlightening and changed the way I looked at the larger society. You realize everything intersects with law. So from then on there was no looking back. I think within the first trimester, it was settled in my mind that I wanted to be a lawyer.