India Business Law Journal – November 2023

Burning ambition

The young talent poised to make a name for themselves

As the year draws to a close, India Business Law Journal conducted a survey inviting clients, peers and business leaders to nominate the young and emerging legal talent who have consistently demonstrated a high level of legal acumen and exceptional leadership qualities.

This issue’s Cover story is a celebration of this young legal talent, and presents a diverse representation of legal excellence in India with lawyers hailing from large established firms, respected mid-sized firms and startups, all looking to make a name for themselves.

These future legal leaders were praised by nominees for their diligence and strategic thinking, rapid career progression, and their ability to simplify complex legal matters.

Our Spotlight shifts onto the data dilemma for entities deemed to be data fiduciaries in India’s data protection law. The recently enacted Digital Personal Data Protection Act, 2023, formalises the term “data fiduciary”, emphasising its similarity to the EU’s “data controller”. Originating from the Justice Srikrishna Committee, the term aims to establish a trust-based relationship between data collectors and individuals.

The law obligates giants such as Facebook and Google, and relatively smaller entities such as online gaming company Gametion Technologies, to act as trustees of individuals’ data, with a fiduciary responsibility. Potential breaches could have dire legal consequences including civil liability for financial losses, criminal charges for dishonest misappropriation under existing laws, and constitutional remedies for violations of privacy rights.

Our Intelligence report gives a bird’s eye view of the Asian legal landscape of 2023, which has witnessed major shifts, with notable changes in diplomatic and economic relations between China and the West. Geopolitical tensions have prompted the US and other countries to limit Chinese access to advanced technology.

Investment restrictions and security concerns have affected Chinese companies, redirecting global supply chains. And China’s economic slowdown has led to a de-risking of supply chains, particularly in technology.

Key legal developments included new data laws in India and sovereign wealth fund legislation in the Philippines. Legal reforms in various Asian countries addressed IP, cryptocurrency, consumer rights and bidding procedures.

The year also saw advancements in technology, with AI capturing significant investment. Regulatory challenges persisted, especially in AI, with China implementing legislation while other Asian jurisdictions have grappled with the uncertainty of this rapidly evolving phenomena.

Environmental, social and governance (ESG) initiatives gained traction in the Asia-Pacific region, fostering sustainability. A landmark global minimum tax initiative for multinational enterprises was readily embraced in the region.

In Fresh directions, we take a look at the Insolvency and Bankruptcy Board of India (IBBI), which has proposed crucial amendments to the existing IBBI (Insolvency Resolution Process for Corporate Process) Regulations, 2016, in response to challenges faced in the insolvency resolution process.

A major change proposed involves the insolvency resolution process cost, introducing increased transparency in expenses incurred by insolvency practitioners. The proposed amendments seek to empower the committee of creditors to approve all expenses in each meeting, enhancing stakeholder visibility and accountability.

A pivotal modification regards the formulation of a resolution plan. The IBBI noted that in the six years since the implementation of the Insolvency and Bankruptcy Code, substantial litigation had arisen concerning the allocation of proceeds among stakeholders.

The proposed amendments advocate for a two-part structure in resolution plans, emphasising the need for faster transitions and minimising delays in resolution for distressed corporate debtors.

In The value vector, IBLJ’s Billing Rates Report 2023, reveals clearly that Indian law firms are facing increased competition from growing in-house legal teams. This dynamic has shifted the focus to providing value for money, with clients demanding deep expertise and timely delivery. Fee negotiations and flexibility are now paramount, prompting law firms to innovate billing structures beyond traditional hourly rates.

The trend towards alternative billing models such as fixed fees, retainers, success fees and outcome-based pricing is gaining momentum to meet client demand.

The intense competition has led to fee pressures and occasional undercutting, but some firms have moderately increased rates. Average legal fees, especially among top law firms in major metro cities, have witnessed an increase of up to 10%, driven by rising pay scales and overheads.

While the government’s approach to legal spending remains piecemeal, there is a gradual shift towards considering quality alongside cost in selecting law firms, following the realisation that opting for the cheapest option may cause problems in the long run.