Ish Bali, director of legal at Coca-Cola India, explains how it is possible to run a tight ship with help from your larger family
The complexities of doing business in India, combined with a need to keep a lid on legal costs, have led several companies across India to create large teams of in-house lawyers. Many report that as a result they are able to do more work in-house and less needs to done by external lawyers.
At Coca-Cola India – a subsidiary of the Atlanta-based beverage company – around two-thirds of the legal and compliance work is done in-house. But at this company, which is the owner of Thums Up and Sprite, India’s top selling drink brands, it is all down to what is essentially a two-person legal team: director legal Ish Bali and his boss, Devdas Baliga, vice president legal. They in turn report to the general counsel of the Pacific Group at Coca-Cola, Yueh Fang Lee, who is based in Atlanta.
Bali’s remit covers Coca-Cola India and the Coca-Cola India Foundation, through which the company does its bit for sustainable development and inclusive growth. He also provides legal advice to the company’s franchisee bottlers in India and southwest Asia (Sri Lanka, Bangladesh, Nepal, Bhutan and the Maldives). With no lawyers working either “under or alongside” him, he handles the legal needs of businesses that employ approximately 15,000 people.
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Given Coca-Cola’s high profile, Bali often works on big-ticket campaigns alongside other teams within the company such as marketing, technical, public affairs and communications.
“I have structured long form agreements for Coca-Cola India with the Organising Committee for Commonwealth Games, 2010, IPL [Indian Premier League] franchisees, AIFF [All India Football Federation], Professional Golf Tour of India, NBA [National Basketball Association], etc.,” says Bali. In addition, he has put together joint venture initiatives and agreements with various Bollywood production houses and broadcasting companies in his role as operations counsel.
The stakes are high and getting it anything other than perfectly right is not an option. However being part of the wider Coca-Cola family has its advantages.
Transfer of knowledge
“We reach out to our legal counterparts in Atlanta frequently on various issues,” says Bali, explaining that the team in India is never alone and that subject-matter experts in other jurisdictions can be consulted as and when required.
He adds that transfer of knowledge between entities and jurisdictions is routine and he rarely has to begin from scratch. “Whatever campaigns we do, except if they are particularly new, any other jurisdiction within the Coca-Cola Company would have undertaken a similar project, or a project that is identical or very similar to the one that is being done in India.”
When Coca-Cola India gets involved in campaigns such as Support My School, which works to rebuild schools in rural and semi-urban India, the legal team structures the transactions and draws up contracts with all the partners it is working with. The legal team also carries out due diligence of third parties, drafts back-end service contracts, and outlines the deliverables and obligations of all the parties involved.
Here too, Bali points out that the while the process of executing contracts with third parties remains the same, the legal issues encountered vary. Inspite of this, the company has successfully “templatized” its contracts and other transactions.
As a result, although Coca-Cola India recently saw 28 consecutive quarters of growth, its legal work continues to be handled by its existing in-house team.
Further, Bali says that he looks at outsourcing the work only where a matter needs the attention of a subject-matter specialist, or if at a particular time the team has too much on its hands.
Running a tight ship
Most in-house lawyers are acutely aware of the need to get value for money when they engage external counsel. Bali is no exception.
“Depending on the nature and magnitude of the work involved, we analyse it as to how much time it could take and then negotiate a fee,” says Bali, adding that he is “more comfortable” about getting work done on a fixed fee basis than on an hourly rate.
When not paying fixed fees, the company fixes the hourly rates it pays a law firm for periods of two to three years. This helps to manage the legal budget and control spending.
“If we work on a fixed fee model and if we work on an hourly rate which has already been agreed … we already know if I have overspent this year and then the following year I need to manage my costs.”
As for the size of the budget, Bali will only say that it varies “depending upon the legal issues we may encounter … it’s a varying curve”.
Bali is equally circumspect about naming the law firms the company uses. However, he says that he has no reluctance to work with cost-effective mid-size law firms. “I would say their output is equally good as any big law firm.”
Legal and regulatory landscape
The tightly regulated sector that Coca-Cola operates in received a major shakeup in 2011 with the implementation of the Food Safety and Standards Act, 2006, and the setting up of the Food Safety and Standards Authority. Bali welcomes the changes this has ushered in.
“India finally brought in an integrated food law,” he says. The new law “replaces decades old laws” and focuses on food safety rather than adulteration, which was “the scourge of a tightly controlled post-independence command economy”. While under earlier laws “any violation of the law, no matter how insignificant or how technical resulted in criminal prosecution”, the new law puts in place a system of graded penalties.
“This will no doubt reduce unnecessary litigation involving industry as well as free up valuable time of the courts,” remarks Bali.
Asked if India’s intellectual property laws provide adequate protection for the Coca-Cola brand, Bali says: “At relevant times we have been using the Trade Marks Act, the Copyright Act, to safeguard our interests as well as the brand and we have been successful. I would say it is comprehensive enough.”
Bali’s wide experience as a corporate counsel comes through in his calibrated response.
Experience talks
After embarking on a career as a litigator 20 years ago, Bali moved in-house in 1998 as manager and head of legal for the Indian subcontinent at Kuwait Airways. Twelve years later – after stints with Times Internet, GEMoney India and SBI Cards, DLF Commercial Developers, and AIG Consumer Finance – he joined Coca-Cola India in his current position.
Looking back over the 20 years, Bali remarks that the challenge for any lawyer, be it in-house or external counsel, is to understand the business first and then interpret the law to find long-term solutions for the business.
This may be hard to achieve especially while engaging external counsel. Bali’s solution is to get them to come to the company’s office, to see what it does on a day-to-day basis, so as to get to grips with the business. “If you were to keep your external counsel at arm’s length, then they would not understand the business and have to spend double the time on a particular issue.”
Bali says that a further challenge is to convince a client of the correct legal position. This is particularly relevant for in-house lawyers who may not recognize that the various functions and teams they work alongside are their clients.
Persevere and persuade
“Often legal people are looked upon as deal stoppers, so the biggest challenge is to make the clients understand that we are also business-friendly people,” says Bali. This is where a lawyer who hopes to make an impact needs more than just legal expertise.
Bali believes that good people-management and networking skills are vital for every lawyer. In addition, he stresses that lawyers need perseverance – a trait more readily associated with mountain climbers and marathon runners. “You should never give up … as it is always tough”.
The remarkable drive revealed in these sentiments is not altogether a surprise when Bali subsequently reveals that his interests include “mountaineering, adventure sports and sports coaching”.
Interesting days ahead
Statistics provided by the deputy president of the Pacific Group of Coca-Cola, during a recent interview with Business Line, suggest that the potential for the company’s growth in India is immense: per capita consumption in the country stands at 14 bottles a year, whereas the global average is 94 bottles.
Chances are that Bali will take this growth in his stride. For as he says: “We are growing every day … what is equally important is to manage costs.”
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