9 ASIAN LEGAL BUSINESS – INDIA E-MAGAZINE WWW.LEGALBUSINESSONLINE.COM smaller items to give them experience or distribute workload. Billing only for a single person, irrespective of the number of associates on the piece of work, incentivises efficient allocation of resources on a matter and is cost-effective for the client. The tech GC also adds that a detailed explanation of the scope of work from the client side, and a fair pre-estimate from the law firms on that basis, goes a long way in avoiding unnecessary cost additions in hourly billing mandates. “We like to present a comprehensive brief with our queries and then ask for a quotation before proceeding. We ask them to factor in 60 minutes of discussion into the billing after presenting the written opinion and limited follow-on questions. This makes it predictable for the law firm, too.” Subramanian agrees that the expectation management is the prerogative of the in-house counsel, and directly affects the quality and cost of work delivered by law firms. “Quality of deliverable from external lawyers can be correlated to the ability of the in-house counsel to present the facts and relevant circumstances and present a point of view. It is the work of in-house counsel to bring pragmatism,” Subramanian says. EXPECTATION MISMATCH This is particularly true when it comes to India’s growing start-ups, which are looking to expand, and seek pragmatic, goal-oriented legal counsel with quick turnaround times. One start-up founder says he prefers working with small firms rather than toptier ones because of the flexibility in rates and attention to detail. He describes his experience with large law firms as one of a teacher chasing a student to finish their homework, which they don’t consider worth doing. He says large law firms tend to focus on larger companies with larger mandates. Even if start-ups agree to pay hourly rates, they don’t get timely responses to their queries, as law firms would like to show they took time on a query in order to increase hourly billing. Smaller or boutique firms that agree to rationalisation and discounted rates, often allocate efficient resources to a start-up’s matter and are more responsive to their needs, he says. Start-ups are looking for legal partners, not advisors, he adds. Subramanian agrees, adding that hourly billing may not work for either a start-up or the law firm. “Legal teams at start-ups work within spheres of many uncertainties. The culture of start-ups appreciates risk-taking skin-in-the-game approach from their investors, partners and advisors. Hourly billing by law firms without any skin in the game may, therefore, seem to fly in the face of a desired approach.” “It would not be reasonable to expect law firms to risk their resources to outcomes that they do not own or control,” she adds. BROUGHT TO YOU BY ARGUS PARTNERS What recent trends and notable developments have emerged that clients should closely monitor when engaging in transactions in India, and how might these trends impact the structuring and execution of deals? In the last few years, the Indian private credit market has emerged as a pivotal force in bridging the existing capital gap. SEBI has recently introduced significant amendments to the regulatory regime governing issuance of listed non-convertible debentures (NCDs), which would impact the structuring of private credit deals. Last month, the SEBI LODR Regulations were amended to provide that a company whose NCDs are listed has to necessarily list all subsequent issuances of NCDs. Listed NCDs were the preferred instrument for investors for transactions where they would like the benefit of SARFAESI. With the recent amendments, the flexibility to structure debt deals depending on the nature of the funding/ asset would be impacted. Another key area of interest for investors would be the developments in the IBC landscape. In January this year, the Ministry of Corporate Affairs (MCA) had published a discussion paper on the amendments being proposed to the IBC. This included the proposal to have a specialised framework to deal with stressed real estate projects, where project-wise resolution would be expressly permitted. As is mostly the case, the devil would lie in the details, since it would need to be seen how the issues pertaining to applicability of moratorium at the entity level as opposed to project level and claims of entity level creditors will be dealt with in the proposed amendments. How have recent government policies and regulatory changes impacted the lending market in India? One of the areas which has been receiving significant attention from the government and regulators is the fintech space. Last year, the RBI had issued the digital lending guidelines which sought to curb the first loss default guarantee (FLDG) model of partnership between financial institutions and fintechs. This was a major setback for the digital lending business. However, the RBI has now allowed the FLDG model though with tightened norms in respect of capping of the guarantee amount etc. This has definitely opened up the market for fintechs and should help with financial inclusion. A conversation with Aastha Aastha Partner E: Argus Partners W: