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Post COVID-19 Legal Sector Challenges And Remedies
The corporate players would prefer to avoid going into litigation at all costs, however, that certainly doesn’t mean that litigation would come to a grinding halt. No, never.
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The crisis that the world in general and our country is facing due to the rapid and seemingly uncontrollable spread of coronavirus is not only unprecedented in contemporary times but also extremely damaging on multiple fronts. Almost the whole world, barring certain exceptions, is in lock- down and only essential services are allowed to function and operate. We are more than certain that mankind would be able to successfully treat the novel coronavirus and get rid of the present crisis soon, however, the immense and incomprehensible damage which this crisis is sure to cause before it passes must be considered with a view of mitigating and alleviating the resulting conditions. We don’t know how the world would look in the aftermath of COVID-19. Certainly, many things would undergo a drastic transformation, from our eating habits to hygiene and lifestyle, however, how we embrace these changes - is the million-dollar question. It is an undisputed fact that sudden changes bring their own diversified challenges, which, in the present case, would surely be multi-faceted and far-reaching. We would be wrong if we are only envisaging the financial turmoil and economies collapsing. The world has contended with many such financial exigencies in the past as well only with a confined and focused goal to emerge from such financial crisis. However, this time, things would be entirely different. The challenges in terms of psychological and sociological behaviour pertaining to the entire human race would be more troubling and perplexing in its enormously diverse ambit. The very definition and essence of globalisation is sure to take a cataclysmic blow. Countries across the globe would revisit their policies, financial and political, pertaining to globalisation. In the post COVID-19 future, we should expect more inflexible and complex policies to take the front seat.
In the legal arena of our country, things are set to take a paradigm shift. The corporate players would prefer to avoid going into litigation at all costs, however, that certainly doesn’t mean that litigation would come to a grinding halt. No, never. Litigation, from a psychological purview, is a by-product of trust deficit along with other attendant relevant factors. We are aware that the professional services of certain legal stalwarts in India are even more expensive than those of the United States. The single appearance fee, often ranging in 7 figures, would be tough for corporate litigants to afford. Litigation, including arbitration, over the past years in India has become exorbitantly expensive. Sometimes, it is beyond the reasonable comprehension of a litigant as, at the time of commencing a litigation or entering an active litigation, he is usually unaware of the endless hidden costs involved therein. When I say hidden costs, the most elementary meaning that could be implied would be as to the ‘dates of hearing’, the overall number of which could not possibly be foreseen by any litigant. Law firms, on the other hand, have started charging clients on the basis of hourly rates. Hefty pay packages and administrative costs have turned this noble profession of advocacy to a costly and pompous show. One cannot even imagine a high-stakes litigation in High Courts as well as the Apex Court without having a battery of senior counsels on each side. Sometimes, a bare calculation of the fees per hearing goes up to crores of rupees. Having said that, how corporations, let alone an ordinary individual, would be able to cover such huge costs in litigation - is something to be seen.
The litigants must show some confidence in our junior counsels (also briefing counsels) who prepare the case right from scratch on behalf of their clients. They must repose their confidence in such juniors and briefing counsels that if they could prepare the case meticulously and thoroughly, that particular advocate would be able to argue such a case before the court of law with effective dedication and vigour. In a case concerning the designation of Senior Advocates before the Apex Court, the affidavit filed by the Gujarat High Court Bar Association is relevant to note here. The said bar association termed the designation of senior counsel as a ‘red beacon of legal profession’. This writer does not intend to argue the merits and demerits of designation of counsels as senior advocates at this juncture. However, it is important to understand that litigation post COVID-19 is not going to be the same, as it was before.
The lawyers at the district court level with their individual practices are much safer than the big law firms and senior counsels as they have an entirely different clientele to deal with. The nature of cases before the district courts are, principally, inevitable and thus, such litigations are bound not to suffer. The big law firms along with mid-size law firms who aspire to be a big law firm in the near future would certainly suffer the consequences of a calamitous disruption of the social and economic order. While the recurring costs would continue to mount, there would be lesser revenue to make up for such costs which would, at end of the day, lead to laying off associates working with them. In the last 10 years, the culture of Indian law firms has changed drastically. We have seen some Indian law firms hiring foreign legal professionals. Further, the international conferences in the legal industry have seen large participation from India. High scale offices with enormous amounts of rent along with other factors are going to prove to be very detrimental for these organisations. Although everyone would survive, however, cost reduction across the board is something which we are going to witness in the near future post COVID-19. The prevalence of 5-star hotel arbitrations and business class air travel etc. are certain to take a hit.
Moving forward, the law firms must equip themselves adequately and properly to embrace the tough times which this sector is going to face. The law firms, as well as junior/briefing counsels, would be required to satisfy their clients that even without the presence of senior counsels, they would be able to do the best for the cases for which they are being entrusted. The culture of referring any high stakes matter to senior counsels must be balanced to some extent. The senior counsels also have to show some leniency in charging clients. Non-effective hearings should be spared from being charged. A new component, although not novel, of one-time lump sum consolidated fee structure for senior counsels has to be infused in the working order, instead of per hearing fee. The conference fee, clerkage etc. ancillary to senior counsel fees ought to be slashed or removed.
Law firms and individual lawyers must be fully prepared themselves for the rough road ahead. Though the litigation, as well as non-contentious work, is steadily bound to increase post COVID 19, however, they must be vigilant that this rising volume of work would not match their expectation and receipt of revenue. It is high time for the management of law firms to ponder upon this restructuring aspect which could balance the interests of all stakeholders. We have to keep in mind that every year thousands of law graduates join the profession and they have to be suitably placed amid this crisis. We need to generate this confidence in clients that like other sectors, the legal sector is also prepared to face the challenges. We have to further ensure that the quality of legal support, in the absence of huge revenue, is not compromised. We have to scrutinize and identify the prospective cost cutting avenues while ensuring that employees of law firms and working advocates aren’t subjected to unduly harsh measures. Above all, we have to take them into confidence.
On the contrary, it could also be argued that the legal sector would see an influx of work in the aftermath of COVID-19 since the resumption of social and economic order would result in an exponential increase in litigation. This may be true to some extent as well. However, as I have maintained earlier, this influx of litigation would not bring the revenue proportionate to what it could have fetched earlier. There arises a peculiar situation where the lawyers, on one hand, have to deal with post COVID-19 corporate and contractual disputes, while on the other, they have to embrace and overcome the challenges of such disputes not generating adequate revenue, as it used to generate earlier.
Some bar councils have come up with a proposal to support young lawyers amid this crisis. Lest we forget that a large chunk of the legal fraternity consists of daily bread earners who are required to work continuously to generate sufficient income. In this lockdown, they are the ultimate sufferer in terms of their financial dependency. The bar councils such as Delhi Bar Council have floated an idea whereby 5000 Rs per month would be provided as financial assistance for young lawyers. The idea, although appreciated, has its own challenges as Bar councils do not maintain the income cycle of the lawyers enrolled with it. Further, how such lawyers who require financial assistance would be identified presents its own difficulties under the conditions of the lockdown. Although the idea has been publicised and senior members of the bar have been urged to contribute and reportedly, some senior members of the bar have contributed to such corpus, however, it is unclear as to how many lawyers have actually received the benefits of such assistance. The welfare policies for lawyers have always been demanded by the fraternity, however, barring the exception of Delhi government’s recent fund of 50 Crores, governments have not paid heed to any such proposal and demands. It would not be out of place to mention that the apathy of the state towards the legal fraternity is not the only reason which has restricted the formulation and implementation of welfare policies for lawyers. The various Bar councils, associations and its leaders have sadly failed in persistently pitching for such policies despite many bar members having occupied senior ministerial positions in almost every government. The fraternity, especially the affluent and well-settled members, have to take this call at their end as to how they could support their struggling and suffering brethren. The nuclear module of such support is best to adopt at this time. Every senior member of the bar definitely knows some struggling lawyers acquainted with him/her. It is humbly proposed that instead of forming a corpus at this stage, the senior and well to do members of bar should identify struggling lawyers in their own respective networks and should directly support them. This would also facilitate support under the lockdown and it would not require any paperwork formalities. The corpus and its scheme of implementation should be promptly and appropriately deliberated and finalised for any such situation as it arises in future.
Time, however tough it, may change. We must learn the ability of embracing change.