This article is written by Sukruti Khandelwal, a student of Symbiosis Law School, Pune.
Host:
Abhyuday Agarwal, Co-founder, and COO of LawSikho
Speakers:
- Abhyuday Agarwal, Co-founder, and COO of LawSikho
- Shweta Rath, Senior Associate at LawSikho
Table of Contents
This webinar is for whom?
Abhyuday: If you are an independent lawyer or a small law firm owner who wants to offer new, high value, and unique services or a law student who wants to build a career in competition law either by working in a competition law firm or a top law firm having its competition law practice, this webinar is for you. Also, it is an excellent subject area for those who want to specialise in research. Due to limited research in this field, research organizations offer good salaries to freshers who start at research positions.
Why should one choose competition law as an area of specialisation?
Abhyuday: Some of you may be very sure of choosing competition law. For those of you who are still wondering whether it is a promising area or not, there is a single key factor to help you make the decision. The area to specialise is not the one which you find interesting or easy but the one where the clients need help, the law is complex and uneasy to grasp, and there is more work as a lawyer. Competition law passes all these three tests.
As a competition lawyer, you can significantly charge an amount of ₹15,000 to ₹50,000 per piece of work. Lawyers can charge more and the clients are also willing to pay since the work is highly specialised. If you create a niche in this area, it will create entry barriers for others as they will not be able to compete with you. This is unlike general corporate or other similar areas where it is already highly competitive.
Law firms will not hire an associate in competition practice unless you have had internship experience. Moreover, you may not even get an internship unless you have a prior understanding of competition law. To build this prior understanding and gain an internship, people have used moot courts, conferences, and publishing articles. People who follow this trajectory get exposed to the theoretical part of the subject only. This creates a big gap as the law firms are unable to utilise the intern productively.
Even AI and automation which is quickly taking over jobs will find it extremely hard to replace the specialisation in the competition law practice. The AI will continue to be your servant allowing you to gain amazing insights in economic research which is essential in competition law matters.
The work in Competition law is on the rise. The recruitment is increasing and the promotion is faster. Why do you think it is so?
Shweta: Actually, there is a three-part reason for this. Firstly, which applies to all other sectors, is that a lot of the work has been deferred due to the COVID situation. So, once the lockdown is lifted, the work is going to increase multi-fold. It is one of those areas where matters are still in action as the Competition Commission of India (CCI) is accepting combination and transaction filings.
Secondly, as we know, two parties that are each other’s competitors cannot collude in terms of pricing, supply, or logistics. However, in the current pandemic scenario where there is a shortage of supply, the government has felt the need that the competitor companies may require to collaborate for logistics, pricing, etc. So, the CCI has come out with a notice which allows competitors to collaborate only for essential items which include healthcare products such as masks, medicine, sanitizers, gloves, and medical equipment. When you see the notice on the CCI website, there is no caveat or time limit given by CCI. The only caveat by the CCI is that the companies can collaborate provided it is for the betterment of the people and economy. What is the definition of ‘betterment’ here? It is very open-ended. Once the lockdown is lifted, a lot of litigation can be foreseen due to this notice. There will be companies who may have taken undue advantage of this notice by earning supernormal profits under the garb of betterment and essential services. Aggrieved parties may complain that these companies have hurt the economy. This type of litigation is going to pick up after the lockdown.
Thirdly, competition law hiring does not take place as any other hiring. Today, more than 100-150 candidates appear for M&A and general corporate streams. This is unlike competition law which has a very restricted crowd. Now that the work is going to increase, firms are more focused on hiring from the fresher level. Also, Competition teams are not as big as M&A teams which works in favour as the firms may not be looking for increasing the size of the teams so much. Law firms have the money to hire and the need to hire also persists.
Can a lawyer who is not from Delhi or Mumbai make combination filings remotely? Was this practice of e-filing prevalent before the lockdown?
Shweta: E-filing was possible before lockdown but was not used so much by lawyers. To this day, competition law practice is limited to Delhi and Mumbai because financial transactions take place in Mumbai, and CCI and NCLAT are located in Delhi where filings take place. Online filings have increased because of the COVID situation.
Which are the top tier firms having a Competition Law practice and the niche firms having exclusive competition law boutique?
Shweta: Though we have only 5-6 tier-I and 3-4 tier-II law firms that have proper competition law practice but they pay handsomely. Right now, most law firms have only one competition law partner but the workload is huge. The only reason these firms are unable to expand is because of the dearth of people with relevant skill sets.
The best is Shardul Amarchand Mangaldas which has the biggest competition law team of around 40-45 lawyers. It has an equal practice in both Delhi and Mumbai. Then, there are AZB, Trilegal, and Cyril Amarchand Mangaldas which are all tier-I firms. These law firms have cut-throat competition with each other. They pay around 12-14 lakhs p.a. to a fresher. Then, there are JSA and Talwar Thakur & Associates at the tier-II level. They pay around 10-12 lakhs p.a. to a fresher.
Competition law is one such area where practitioners rely a lot on internships and pick students through PPO. They want to see whether the student has done actual competition law work or not. Shardul Amarchand Mangaldas and Luthra & Luthra may even prefer campus placement.
What is in for an independent practitioner looking to get into competition law practice?
Abhyuday: So, first things first, you may switch to a job in a law firm or continue working as an independent practitioner. As an independent practitioner, you are going to do advisory work for the clients or work on the informant’s side. The entity which is filing the complaint with the CCI is the informant and is usually the smaller players complaining about the bigger players. Independent practitioners need to tap this market of small players because bigger players already have tie-ups with established law firms. Also, big law firms get into a dilemma that they cannot work on both sides of the coin. This means that these firms cannot defend big corporations and file information at the same time. The market also regards these firms as a good option either for the defendant’s side or for the informant’s side. This classification exists in the market. For example- this sort of classification exists in Banking law practice as well. When you visit a lawyer, you will find out whether this lawyer is a borrower’s lawyer or a banker’s lawyer. So, as an independent practitioner, you must focus on the informant side. You can charge a high margin on that.
Shweta: Moreover, the CCI has a differential fee system. The filing fee is ₹5000 for an individual and ₹1,00,000 for a small firm. So, the lawyer also charges accordingly. For example, a lawyer who is just starting can easily charge around ₹45-50,000 for drafting and filing information on behalf of an individual. If the information is dismissed by CCI on finding no ground, the lawyer can appeal to NCLAT and charge per appearance.
If the information is accepted, then a long investigation kicks in which goes on for two-three years. The lawyers get to charge for each of the stages of the investigation. After this, an order is passed by the CCI either penalising or absolving the defendant. The losing party appeals and the lawyer gets to charge per appearance before NCLAT.
The filing of information before CCI is expensive because there is a lot of research, analysis, and quantitative calculations that go into the information. So much so that sometimes, lawyers may even have to get in touch with economists to find out about some market studies. This increases the cost of information. It cannot be equated at the same level as a plaintiff or a consumer complaint. Established law firms charge in lakhs when it comes to drafting information.
What is the process from the filing of information to the rendering of an Order by the CCI in a competition law case?
Shweta: After the information is filed with the CCI, the case can proceed in two directions. If the information is dismissed by the CCI on finding no ground, the informant party can appeal before the NCLAT.
If the information is accepted, then a long investigation kicks in which goes on for two-three years. The investigation process involves a back-and-forth with the Director-General who is the investigative arm of the CCI. The Director-General may issue notices to which the lawyers need to file replies. The Director-General may even call the concerned parties to the CCI for interrogation. Once the Director General’s report comes out, it is communicated to the parties. The parties have to respond to this report. After this, the CCI looks into it. It may even ask the Director-General to investigate further and come up with another report to which again, responses are filed by the parties.
Then comes the time for the oral hearing which goes on for 2-3 days before the CCI. Once the oral hearing is done, the CCI comes out with the order. The result is either a penalty is imposed or the defendant is absolved. Generally, the losing party files an appeal against the order before the NCLAT. Either way, most of the cases end up in appeal before the NCLAT.
Now that the flow/process has been explained, tell us the legal work involved in this flow/process.
Shweta: The biggest revenue stream is advisory work. The second biggest revenue stream is that most of the companies now have a competition advocacy drill wherein they want lawyers to tell them everything there is about competition law. This is especially done for the marketing and sales teams because these teams face the market the most.
Abhyuday: If this requisite training is not provided to the marketing and sales teams, they may act purely in commercial terms and take up the most favourable deals which may end up in foul of competition law.
Shweta: The law firms provide this training to Fortune 500 companies and charge heavily. Independent practitioners can do similar training for small companies.
Abhyuday: As an independent practitioner, you may want to reach out to high growth start-ups to provide this training because these start-ups sign up thousands of customers or clients daily.
Shweta: These start-ups/ companies also collaborate with non-competitor companies and must make sure they do not enter into illegal agreements. This is where such training helps because the companies may not even be aware of the illegality. There is a very thin line between usual business agreements and violation of competition law.
Abhyuday: This method of training is entirely different. It is unlike moot problems where the issues are undecided and open-ended. In the training, you want to train people about what is black, white and, grey and how to avoid troubles. This requires not only the interpretation of the law but also business insights. You can also train your clients about the actions of the bigger players which are in violation of competition law and how to go about it. Offering part of the training as free can immensely help independent practitioners to tap into this market.
Shweta: The training is the best way because these companies may have clients on a pay-roll and are already reviewing contracts. For example, there is an exclusivity clause in a marketing agreement which falls foul of competition law. As a lawyer, when you see this, you understand that this company needs to be trained in competition law and propose the same to the company. This helps a lawyer to tap into this market with the existing clients.
Do you think when an information is filed before the CCI, the respondent tends to change their conduct?
Shweta: Absolutely, it happens a lot. If information filed with CCI has been accepted, then you cannot withdraw the matter stating it does not hold good anymore. However, the motive of the informant is only for the respondent to change its conduct. Most of the time, the clients (both informant and respondent) are not even interested in going through the lifecycle of the investigation. In this regard, the Competition Act, 2002 is being amended as well. The bill also tries to bring leeway for the parties.
Every sector has a sectoral regulator. Sometimes, the sectoral regulators may pass guidelines to protect competition in their sector. This means an overlap between CCI and other sectoral regulators. What do you think about this?
Shweta: Telecom sector, through its regulator TRAI, is one such highly regulated sector that has a constant tussle with CCI. TRAI had to reconsider its decision about net neutrality considering the competition litigation arising out of it.
Abhyuday: One example can be that of the patented chipset methodology of Ericsson being used by Micromax and Intex to produce cheaper chipsets for their phones. Ericsson demanded royalty for the use of its patented technology. Micromax and Intex agreed to pay the royalty on the price of the chipset but Ericsson wanted it on the price of phones. This disagreement led to litigation between them.
Shweta: Under competition law, Micromax may say that Ericsson is going against injunctions by abusing its dominance and denying its access to the market. This is how the interface among sectors becomes very real.
Do you think foreign LLM is required to make a career in competition law?
Shweta: In my opinion, one does not need a foreign LLM to make a career in competition law. If you dedicate yourself to the field during college and initial practice years, you are good to go. There is no denying that there are advantages of doing a foreign LLM. If you do an LLM in competition law from King’s College, London, your practice will reach the next level. This means that such a degree adds value but it does not mean you cannot become a good competition lawyer without it. Learning competition law and working in competition law are two different affairs. If you learn the law and understand the core concepts from the EU, USA, you will still have to invest time in India and understand the working side of it to learn the relevant skill sets.
What do you think a law student learns through competition law moots?
Shweta: The moot court competitions introduced me to the subject and helped me learn the basic concepts like an anti-competitive agreement, abuse of dominant position. The moot courts teach only the enforcement part of competition law. The mergers and acquisition part of it can be learned once you join a tier I law firm.
Moot court problems will read that information has been filed and it is for final hearing, so argue the matter on the basis of merits.
Abhyuday: The aspect for which an independent lawyer will charge or a young lawyer will assist a senior in a law firm is not taught in moot court competitions.
Shweta: This is an important difference. It is imperative to learn how to file information and the process after that in the first place. This is extremely relevant if you want to work in a competition law workspace.
Abhyuday: For most people, it takes almost 2-3 months to do a moot or write an article on competition law. Compare this with learning 20 skills that you can apply for your client immediately or be able to help a law firm Partner in your internship. You can even show your portfolio of work. This is so easy to convey your skills to a client or a partner. This is unlike moots where it is so difficult to explain the moot problem and your arguments to a partner sitting in front of you in an interview.
What is the concept of leniency under competition law?
Shweta: Leniency is an upcoming topic in competition law. The provision has existed for long but the filing of leniency petitions has seen a sudden spike. To understand leniency, let’s take an example: a circle of competitors has been colluding for a while and now they fear that the collusion is coming in the public eye and the CCI may come after them. So, one of the colluding competitors approaches his/her lawyer to be imposed a reduced penalty and get out of the collusion. So, the lawyer files a leniency petition by which CCI awards a reduction in the penalty on account of bringing information before it. The leniency matters are very confidential as they require parties to go against their cartel members. Leniency is an upcoming area because the CCI has become very robust in the Cartel busting mechanism. In the last year itself, the CCI conducted around 5-6 raids. Competition lawyers can also provide training to companies on how they should react on being raided by the CCI.
Can you give some recent examples of work done by independent practitioners who were not a part of big law firms?
Shweta: There are trader and vendor associations that have a problem with big companies and their transactions. These associations approach independent practitioners who will probably not charge as much but will get the work done. This is was seen when Flipkart got acquired by Walmart. There was a Confederation of All India Traders that was not happy with the Order and approached an independent practitioner to represent them.
Recently, the All India Vendor Association had also filed a case against Amazon and Flipkart. This was also taken up by independent practitioners from the informant’s side. Interestingly, this matter was taken up by a practitioner based in Hyderabad, neither Delhi nor Mumbai.
What is the opportunity in being a retainer for CCI?
Shweta: CCI has around 20-30 lawyers in its panel on a retainer basis. Whenever the order of CCI is challenged before the NCLAT and Supreme Court, CCI is also made a party. So, lawyers are needed to represent the CCI. It is a decent revenue stream. Lawyers are paid ₹15-20 thousand per appearance before NCLAT and ₹25-30 thousand per appearance before the Supreme Court. This is a lucrative career opportunity because of the cases one gets to work on. For example: If you happen to represent CCI in a case involving Google, you get noticed, your name is published in so many papers, and then, independent clients start approaching you. The eligibility to be empanelled is the ability to demonstrate that you have worked on competition matters, filed information, and have relevant experience. Since CCI cannot associate with top tier law firms, it looks for independent practitioners and boutique firms for empanelment.
What are the skills that are taught in the Competition Law Course of LawSikho?
Shweta: In my experience, when I applied for a job in a law firm in 2015-16, I could only show that I had participated in a moot and had written a paper. I had interned a month which was enough to show that I am a reliable person. Back in the day, a lot of people did not even do this. Now the difference is that everybody is doing moots and writing papers. Even, the NLU students are also going for premium moots and writing papers. Then, why should a Partner hire you? This is more important for the non-NLU crowd. So, what is the point that will help Non- NLU students differentiate themselves? Moot court competitions and papers will not be enough to show that you have an edge.
So, to give them an edge, it is better to teach students how to draft information, how to draft a reply to the information, how to draft a recall application, leniency petition, how to draft an appeal, and so on. When I say draft, I mean everything which includes how to draft the cover page, how should the content body look, how should the analysis be done, what should the prayer look like, and how much fee is to be paid to the CCI. The students learn from top to bottom and the only thing they need to work on will be the facts of the case. This is on the enforcement side and constitutes half of the competition law work.
The other half is the mergers & acquisition which is not taught anywhere else. This work includes how to file a notice before the CCI to get an approval or what are Form I and Form II. These are alien concepts even to competition law enthusiasts. This is dealt only in tier I firms. Let’s say if you know how to draft Form I or how to do a Target Exemption Test or how to do a Parties Test and tell this to a partner in an interview, they will be impressed. If this sort of training is provided to students before they join a law firm, it will be a win-win for both the student and the law firm.
What can a student expect from the LawSikho Competition Law Course?
Shweta: In the first week, basic concepts are taught and the students struggle a bit. Then, the students start reviewing contracts and learn to pick out the controversial competition-related issues in the contract. They proceed to draft some small applications. They also learn to draft recall and interim relief applications. Now, they can draft full-fledged information which they learned in parts during the course.
Abhyuday: The work in the course will put you at a level where you can perform client work. There is a requirement of effort on your end but there will be all the support you need.
Shweta: Some students have delivered exceptionally well and I am trying my best to give college students the exposure which I got very late in my competition practice.
Questions from the Audience
What is the relevance of economics for lawyers in the competition law?
Abhyuday: One mistake people make is that they think they have to be an economist or an economics graduate. In my opinion, it is not at all required. With class 10 mathematics, and Class 11 and 12 economics, you can easily understand what market share and competition is. After that, all you need is your legal and strategic brain.
Shweta: Along with this, you also need to have a continued aptitude for the subject. You must know terms like monopolistic competition, free and fair competition, etc. There is no need for a specialised degree. However, one needs to have an aptitude towards economics because this is a technical subject. People who are practising CPC or CrPC cannot be expected to learn about the application of competition law just by reading the bare act overnight.
Abhyuday: This is a lot about dealing with facts and reports and then packaging it into a legally cohesive argument. This is where an independent practitioner’s ability to think and present an argument comes into the picture.
Shweta: This requires research and reading reports which is why competition lawyers charge higher. Competition lawyers study this separate area apart from the litigation they handle. This is not to say that you require a specialised degree.
How beneficial is the LawSikho Competition Law course for those who already have a basic understanding of the law but want to focus on the practical and drafting aspect of it?
Abhyuday: Even if you have a basic understanding, you will learn the work you will perform in a law firm. The law firm journey is six months to a year of upskilling.
Shweta: There have been students who have learned so much from the course even when they had participated in competition moots. The books and the act provide a very generic understanding whereas the work is much more than that.
Abhyuday: There is a difference in the way you look at concepts in theory and in practice. Sometimes, doing the work itself is a whole new ball game. Imagine the level of confidence you will gain after actually working on practical aspects.
I am a B Tech with an LLB degree with a specialisation in IPR. How will competition law help me?
Abhyuday: For you, the whole game is patent laws, SEPs, and general competition law.
Shweta: In addition to this, policy groups are being developed within the companies. They hire lawyers who have competition law knowledge. These tech companies are hiring competition law practitioners because they are on the target of CCI. All the big technology companies such as Oyo, Amazon, MakeMyTrip, and Flipkart are within the radar of CCI and hence, require competition lawyers.
Is it better for a fresher to start practising before Sectoral Regulators first and then move to the CCI?
Abhyuday: This does not matter. You can practice before any regulator you want to. There is no better or worse scenario.
Shweta: Lawyers who are practising before Sectoral regulators are even more advised to understand competition law properly. A Lot of interfaces keep happening between CCI and sectoral regulators because of the jurisdictional overlap. Telecom, electricity, oil & gas, IPR, and SEBI are some sectors in which the knowledge of competition law is an added advantage.
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