Senior Advocate Sajan Poovayya has raised concerns regarding the lack of scrutiny on the economic ramifications of judgments passed by the Supreme Court of India. Speaking at the launch of In-House Matters—a handbook for modern general counsel—Poovayya highlighted that even in substantial commercial disputes involving governments and major corporations, the economic impacts of such rulings are often neglected. The event was held in Delhi, celebrating a book authored by Pramod Rao, Rithvik Lukose, and Balanand Menon, which draws insights from the experiences of 30 prominent general counsel across India.
Poovayya remarked, “Nobody really questions the Supreme Court today on what’s the economic damage that a judgment does or what’s the economic cost.” He emphasized that judicial decisions are predominantly assessed through a legal perspective, termed as the “march of law,” while their potential economic consequences remain underexplored.
He noted that this approach has already shifted in other domains of corporate law. Today, directors are expected not only to fulfill their legal obligations to a company but also to consider the broader impacts of their decisions on communities and the environment. Poovayya pointed out that the role of general counsel (GC) has significantly evolved over recent decades.
“The simple question that we would ask 35 years ago to a general counsel was possibly, ‘Is it permissible in law?’ The question now has really turned to simply, ‘Should we do it?’” said Poovayya, emphasizing the growing role of GCs as “keepers of institutional morality.” Their responsibilities now extend beyond legal compliance to evaluating the long-term implications of decisions on the organization.
He described the contemporary GC as not only a legal advisor but also a “chief ethics officer” who provides wider institutional guidance. Similarly, former Securities and Exchange Board of India (SEBI) Chairman UK Sinha underscored the strategic role GCs could play in business. Sinha cited the transformation of ICICI from a development financial institution to a universal bank, where the legal team played a pivotal role.
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He also talked about UTI’s restructuring following the 2001 crisis, noting that the eventual framework was conceptualized by an internal legal expert. Sinha emphasized that legal teams are crucial in establishing the “tone at the top” and cultivating an institutional culture that applies rules uniformly, irrespective of hierarchy.
The book launch was followed by a panel discussion moderated by Debosmita Nandy, Head of Legal at Cinépolis India. The authors, alongside Nandy, delved into the evolving role of in-house legal teams, particularly focusing on the initial 100 days of a new GC. They advocated for a strategic “observe, orient, identify, and act” methodology, urging new legal heads to first comprehend the business landscape instead of rushing to prove their immediate value.
The authors also acknowledged that there is no one-size-fits-all arrangement for an in-house legal team. Its structure should be tailored to the specific needs of the business, considering factors such as revenue, contract volumes, and associated risks.
