General counsels step up as strategic leaders in India Inc

Mumbai: The position of general counsel or head of the legal department, once viewed as a specialised, behind-the-scenes role at corporate India, is transforming. Lawyers are now taking on key operational mandates, rising to become business unit heads, chief operating officers and even chief executives. The change signifies a strategic shift in how companies view and utilise legal expertise.

The evolution has been gradual. A decade ago, general counsels were considered primarily a cost centre, or gatekeepers who slowed down deal-making. But the enactment of the Insolvency & Bankruptcy Code, fast-evolving regulatory and compliance structures and heightened scrutiny from securities and tax regulators have placed legal strategy at the heart of business planning, say veteran lawyers.

"Every big decision, be it M&A, fundraising, supply-chain restructuring or entry into new markets, comes with regulatory implications," said Rajiv Choubey, group general counsel at the Dalmia Bharat Group. "The legal function has naturally expanded into operations because business execution is now inseparable from legal risk."

Companies in sectors as varied as financial services, pharmaceuticals, infrastructure and technology are already embracing the shift.

In April, Jolly Abraham was elevated to managing director and general counsel at home-grown private equity firm True North Co from being a director. Sanjeev Gemawat joined the Essar Group as managing director and the group's general counsel in August last year. In January last year, L&T Finance elevated Raju Dodti to chief operating officer.

Young in-house lawyers, many with either stints in global law firms or MBAs alongside law degrees, are more comfortable with metrics, financial statements and cross-functional leadership than their predecessors.

In May this year, virtual gaming company Head Digital Works (HDW) promoted Siddharth Sharma to chief executive officer. Sharma had started his career as a lawyer at law firm Trilegal and subsequently pivoted into business strategy. He joined HDW in 2017 as manager of corporate strategy.

"Legal leaders today are strategic partners," said Shweta Sheth, vice-president and head of compliance recruitment at Vahura, which provides executive search and recruitment services to the legal sector. "Boards look up to them for advice on governance, compliance and crisis management, which are indispensable when running operations. Also, governance itself is now being seen as a growth driver rather than a defensive shield."

The constant state of crisis is also one of the reasons for this shift. The pandemic, the Russia-Ukraine conflict and recent tariff disruptions have compelled corporations to rely heavily on legal teams. These teams are constantly interpreting force majeure clauses and renegotiating contracts and are currently helping to manage supply chain disruptions.

Domestically, developments such as the recent Supreme Court ruling that set aside JSW Steel's acquisition of Bhushan Power & Steel and the central government's ban on online money games have forced companies in affected sectors to depend on their legal teams for guidance on current and future business strategies.

"While this trend has been firmly established in global markets, especially in the US, it is now increasingly visible in India as well," said Gemawat of the Essar Group.

Globally, Jeff Kindler, who joined Pfizer as general counsel and vice chairman, became the US pharma major's chairman and CEO in 2010. Currently, he serves as the CEO of a privately held biotherapeutics company, Centrexion. Kenneth Frazier joined Merck & Co (known as MSD outside of North America) as general counsel and rose to become executive chairman and former CEO from 2011 to 2021.

"Industries that operate in complex, regulation-intensive environments, or those at an early stage of evolution, naturally require legal professionals to play a more strategic role. In such settings, it is both necessary and inevitable that legal counsel transition into executive and leadership positions," said Gemawat.