Shiv Agarwal and Ravi Jasani graduated from a national law university in 2018. Roommates and close friends, both young lawyers were not excited by litigation and driven towards corporate law, both sought careers as in-house counsels. Over their course of 5 years, they took courses to prepare better for life as in-house counsels. Upon graduation, Shiv joined a large family owned business in Ahmedabad, while Ravi took on a role in an investment firm in Pune. Little did the young counsels know how far their roles would diverge.
A large part of Shiv’s role is about facilitating everyday business and helping the management take business decisions. About 60% of his time is spent drafting and vetting contracts, the rest is split almost equally between legal research, business advisory and due diligence (DD). He believes that this would change if the company was undergoing any litigation.
In contrast, Ravi spends about half his time on DD, while the rest is primarily made up of contract creation tasks, followed by legal research and advisory. Since each investment is unique, Ravi develops the paperwork from scratch. This becomes overwhelming especially in crunched times when multiple deals are packed close together.
As the two friends caught up after over a year, they exchanged notes on how their paths had been. They realised how they encounter challenges that are unique even though their titles are the same, in-house counsels.
Document and Contract Management
For a task that takes up the majority of his time, Shiv finds it quite frustrating to have to use old and outdated drafts as starting blocks in contract creation. He interacts with multiple internal and external stakeholders during the contract lifecycle and finds it especially challenging to keep track of various versions that get created along the way before a document is finalised. The multiple versions also make it difficult to collaboratively work on a document within the team. He is also concerned about the way the documents are stored digitally and hopes it can be made more secure in the future.
Many of these files are ~300 pages long, so he is grateful to have some artificial intelligence (AI) based tools that help him review documents and contracts. However, he points out that it doesn’t save him a lot of time since he still needs to review the documents manually as the tool often misses certain aspects specific to the legal nature. Similarly, following up and ensuring that the contracts are being implemented properly and keeping track of major milestones of a contract is also a significantly manual task for Shiv at his company and requires massive effort.
Due Diligence
Based at an investment firm, Ravi, alongside his team, evaluates about 10-12 new deals on average in a quarter. Each deal requires its own DD process and takes a team of 5-6 lawyers actively working on it. This process usually involves sourcing and procuring all the relevant documents, verifying company details, understanding market trends, evaluating the technology etc. An average DD takes between 1 to 2 months to be completed.
Ravi recounted how there can be many roadblocks in this long and time intensive process, but feels that a major set back is often caused due to documents not being available in the first place. Sometimes companies are either missing documents entirely or do not have them available in usable condition due to wear and tear. On top of that, depending on the geography, documents are created and stored in vernacular language which requires an additional step of translation in the mix. As e-signing and digitalisation of business documents and processes gains traction, he is hopeful that the challenges surrounding availability of documents can be mitigated in the long run making the DD process more time effective and less strenuous.
Information Asymmetry
While undertaking legal research for the company’s management, Shiv has often found the available resources to be inadequate in their ability to provide any analytical data. Many resources that exist are only able to provide raw data in unanalysed form. This also makes it difficult for him, and his colleagues, to stay informed of relevant legal updates - both regulatory and judgemental. This has limited their ability to make informed analysis and provide data backed inputs. Some of his connections at major law firms have also brought up this to be an issue that requires a lot of manual effort on the part of lawyers.
Stamp Duty
Something that stood out as common between their different experiences was the sheer amount of agreements they had to execute on a day-to-day basis. Both Shiv and Ravi concur that, in executing agreements, identifying the appropriate stamp duty for different jurisdictions is a major pain point. This is quite a time consuming task that has to be carried out repeatedly as stamp duty is levied on legal documents across state borders. Each state has its own Stamp Duty Act, with some of these acts being quite old. There is no single repository of information on it as the duty may also vary depending on the type of agreement, requiring a manual calculation to be made for each instance.
Technology Integration
Over the years, both their companies have made several attempts to integrate technology into the operations of the legal teams. Shiv and Ravi share their experience about pain points that remained unaddressed in these attempts:
Limited training during their onboarding
Long feedback loops that had to be routed through a channel of intermediaries making query resolution tedious and inefficient
Information on benefits and drawbacks of implementation not communicated well enough affecting the willingness to learn the new tools
Most importantly, complicated user interface making navigation challenging and complicated
In some cases, both the counsels felt that there was also a lack of trust in the technology, especially in products around research which provided inputs for decision making.
It is very important for startups, specifically in the legal tech sector, to understand the unique needs of their consumers as people with similar profiles could have vastly different needs. This could also help the founders zero in on a target segment early in their journey and build the product to cater to the requirements of the said segment, enabling them to achieve scale at a faster pace before expanding into different segments.