Law firms choose regulatory minds for niche advice

Increasingly complex and overlapping regulations and guidelines are prompting law firms and headhunters to consider hiring regulators.

This is different from the tendency of retired senior civil servants to join boards as advisers as a gesture of goodwill due to their long relationship and broad understanding of a particular industry.

Several large and small law firms have recently hired veterans of the Reserve Bank of India (RBI), Securities and Exchange Board of India (Sebi), Insurance Regulatory and Development Authority of India (IRDAI), departments tax and police to help clients cope with the complexities.

In early July, former RBI Managing Director Arjun Bikas Dutta joined New Delhi-based boutique law firm AK & Partners as a director advising non-bank financial companies (NBFCs) and fintech clients. At the central bank, Dutta oversaw the banking operations and supervision department of urban banks and NBFCs, and led teams for on-site inspections of more than 100 NBFCs and banks. He was instrumental in setting up a risk-based internal audit system for financial institutions and in regulatory compliance regarding fintech and digital lending operations.

“This is part of the larger growth of public policy consulting, where law firms are looking for senior advisers who can help their client undertake risk analysis from a regulatory perspective when structuring the transaction or are considering a new product, ”said Ritvik Lukose, Managing Director, Vahura, a governance and legal framework research firm.

A regulator’s point of view

“We see this trend continue to grow,” said Lukose de Vahura. “These advisors are not subject to billable hour targets typical of law firms. They play a key role in advising clients of the law firm and in guiding in-house lawyers on how regulators can examine a specific issue.

In June, the former executive director of RBI Lily Vadera, the former executive director of Sebi PK Nagpal and Nilesh Sathe, a former full-time member of IRDAI, joined the law firm Cyril Amarchand Mangaldas as advisers. seniors within its group of financial institutions. In May, a former member of the Central Direct Taxes Council, Prasanna Kumar Dash, joined AK & Partners to lead the council on direct taxes, electoral laws and the law on the prevention of money laundering.

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In March, Lalit Maheshwari, former Deputy Inspector General of Police, Anti-Corruption Bureau of Rajasthan, joined Jaipur-based Capstone Legal to lead its white-collar crime practice.

Navigate regulatory changes

For law firms, such a hire aims to help solve the problems of startups and even mainstream businesses exploring business around blockchain, cryptocurrency and P2P lending in the financial industry, online gaming. and to clarify the tax amendments. According to Anuroop Omkar, founding partner of AK & Partners, the government is very focused on improving the country’s ranking in terms of ease of doing business, resulting in rapid changes in the regulatory framework. To keep pace, law firms are now hiring or hiring senior officials who can help clients navigate these complexities. “For many clients it is a great comforting factor that they are advised by a team that includes former regulators,” said Omkar.

Industry veterans believe this is a natural progression of a mature market. With increasing complexity in other sectors, even regulators and courts such as the Competition Commission of India, Goods and Services Tax Board, National Green Court and Electricity Appeal Tribunal will likely be the next frontier for such recruitment, experts said. “In most Western countries, and particularly in the United States, there are schools that teach how to engage with governments and policy makers, but there is a void of such institutions in India,” said Dr Neeti Shikha, member of the academic council of India School. of public policy.

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