ODR heating up in India

Online dispute resolution (ODR) has been around for a while now and Covid-19 has given it a big push. It can mean any type of online dispute resolution although the focus is usually on forms of alternative dispute resolution. In April 2021, India’s Niti Ayog launched an ODR handbook which listed consumer disputes as one of the key areas amenable to ODR. The handbook was “an invitation to business leaders to adopt ODR in India”. Snapdeal has taken the leap (via a pilot study) in partnership with Sama (an ODR platform). Apparently, about a 100 cases were settled and some disputes which ordinarily take between 2 – 3 years were completed in 15 days. This is obviously an interesting development for ODR but I also found it interesting that the CEO of Sama said that the Snapdeal was “a very customer-centric approach”. One can imagine Snapdeal drawing more customers based on their option of cheaper and quicker ODR.

There are other ODR platforms being developed and tested in India. Jupitice (which has former judges on its advisory board) is another example. The ODR handbook encouraged Indian businesses to draw on international best practices. On that note, the Council of Europe’s recently released Guidelines of the Committee of Ministers of the Council of Europe on online dispute resolution mechanisms in civil and administrative court proceedings might be of interest to businesses wanting to take the Snapdeal route and to ODR platforms.

Is Australia’s class action regime available to non-resident shareholders?

Is Pt IVA of the Federal Court of Australia Act 1976 (Cth) (which contains Australia’s class action regime) not available to non-resident shareholders of a dual listed Australian company? This and some other interesting questions came up in BHP Group Limited v Impiombato [2021] FCAFC 93 (where leave was sought to appeal the decision in Impiombato v BHP Group Limited (No 2) [2020] FCA 1720). The court granted leave to appeal on this ground.

Middleton, Mckerracher and Lee JJ noted that ‘the real question is better expressed as: whether Pt IVA permits an applicant to define group membership as including claims of non-residents?’ [27]. In the ‘opt-out’ regime of the FCAA, the Cth made a choice to ‘include no provision excluding the possibility of non-resident group members’ [47]. The judges further agreed with the primary judge’s finding that there was nothing in Part IVA showing an intention to disallow claims for loss and damage by non-residents [63].

Leave to appeal has been granted on this issue of extraterritorial application of Part IVA of the FCAA because it involves ‘a point of some importance, which has not been directly considered by an intermediate court of appeal in Australia’.

That will be something to watch out for.

There is however, another interesting issue discussed in the judgement. It is titled ‘wrongful discretion contention’ in the judgement. My title for it is below.

Lack of certainty and finality

BHP’s alternative argument was that ‘even if claims were able to be made on behalf of non-resident group members, it was appropriate for the Court to exercise its discretion under ss 23 and/or 33ZF of the Act to exclude such persons from the class action’ [69]. The primary judge rejected this application. BHP then argued that ‘in deciding not to order the exclusion of non-resident group members, or to order that the proceeding on behalf of such group members be permanently stayed pending an amendment to the definition of “group member” (or even considering such a course),… the primary judge failed to take into account a material consideration which must be properly weighed in the exercise of the discretion: the interests of BHP in the proceeding and, more particularly, BHP’s interest in certainty and finality in respect of the proceeding’ [71]. They further argued that the retention of non-resident group members ‘who will retain their rights of action against BHP Plc regardless of any settlement, promotes significant uncertainty’ [75].

The primary judge seemed to agree that there is “some risk” of the issues being re-agitated in UK and South Africa [81], however, on balance, decided not to make an order under s 33ZF or s 23 [82].

Agreeing with the primary judge’s decision, Middleton, Mckerracher and Lee JJ held as follows [83]:

Australia has adopted a no provision model. If the operation of that model results in an unfairness in an individual case, Pt IVA has within it discretions to ensure that any prejudice can be ameliorated, but to do so in such a way as to not totally exclude a sub-class of group members who have claims that can be grouped. In any event, it is not as if by excluding non-residents the Court will not have to look at the question of purchases of BHP LSE Shares and/or BHP JSE Shares on foreign exchanges, because some Australian resident group members (who also purchased BHP ASX Shares) will remain group members.

However, the judges went on to acknowledge the problem of uncertainty affecting settlement efforts. Although this particular rejection of relief was not challenged by BHP, the judges went on to make some interesting comments [92, 95].

Without expressing any concluded view, in the particular circumstances of the present case, it might be argued that immediately prior to the hearing or in the context of a settlement proposal or mediation there may be some merit in an order requiring a non-resident class member to take a positive step to opt-in to the class action, although the class action is otherwise conducted on an opt-out basis.

As to any residual concerns as to power to make an order under s 33ZF, it is beyond the scope of this judgment to enter into extended debate about any form of “opt-in” or class closure orders and it is unnecessary to do so.

It will be interesting to see if this sort of thing comes up in future in Australia or in other “opt-out” jurisdictions.

Taking the Heat: (Non)Disclosure of Climate Change Risks in India

Anik Bhaduri

               Last year, the Wall Street Journal described an event that was previously unheard of – ‘a climate change bankruptcy’. A series of wildfires in California destroyed assets worth millions, pushing the Pacific Gas and Electricity (PG&E) Company into bankruptcy and causing huge losses to its investors. Later it was found that the executives of the Company knew that the wires were outdated and that there was a high risk of electricity plants catching fire. Not only did they not do anything to reduce the risk, but they also did not inform prospective shareholders of the potential fire hazard and financial risk. This raises an important practical question that had so far only been discussed in theory – should companies be made liable for failure to disclose climate change risks?

            Over the last year, numerous countries have been discussing and debating the introduction of new regulations that mandatorily require companies to disclose potential risks to their business operations from climate change. There is, however, another school of thought, particularly prominent in the US, which holds that any information regarding climate change risks are ‘material information’ and accordingly, even in the absence of any new regulation, a failure to disclose such information to potential investors amounts to securities fraud. It has also been argued that a failure to disclose such information amounts to a breach of the fiduciary duty that the management of the company owes to tits investors. Although such a reasoning is yet to be espoused by any court in the US or elsewhere, the long-drawn litigation against Exxon indicates that there is some merit in these arguments.

            In India, although the government has flagged climate change as a systemic risk that can affect the stability of the financial system, no steps have been taken in this regard by the Securities and Exchange Board of India (SEBI) or other regulatory bodies. The SEBI, like the Securities and Exchange Commission (SEC) in the US, relies on the subjective standard on materiality to determine the extent of disclosures required. No rule or regulation in India explicitly requires companies to disclose information about climate change risks. My new article in the Business Law Review argues that even in the absence of such an explicit regulation, the failure of Indian companies to disclose information about climate change risks violates the existing SEBI regulations.

Understanding materiality: In finance and in law

            Ever since mandatory disclosures were introduced in the Securities Exchange Act in 1933, they have formed a key part of securities regulation across the world, including India. The primary purpose behind mandatory disclosures is to remedy the information asymmetry between the management of the company and the investors, so as to allow the investors to make informed decisions about where to put their money, and enable them to engage meaningfully with the company management. The understanding of what counts as material information is based on two broad theories.

The first is the efficient markets hypothesis. Postulated by the Nobel economics laureate Eugene Fama, it posits that the value of securities in a market reflects all the publicly available information. If the risks to the value of a corporation are not adequately disclosed, its shares are traded on the stock exchange at a value far above their actual worth, enhancing the possibility of a bubble on the market. Fischel further developed the idea into the fraud-on-the-market theory, which argues that because the securities market effectively reflects public information in the price of stock, fraudulent disclosures that artificially inflate or depress market prices create fraud on the entire securities market, leading to economic loss for the investor. According to this theory, therefore, material information amounts to everything which, if disclosed, will affect the price of the stock on the market. The US Supreme Court explicitly endorsed the theory in Basic v Levinson, effectively laying down the financial and economic basis for securities fraud adjudication.

The second financial theory underlying mandatory disclosures is the investor suffrage theory. According to the governance theory, the purpose of disclosures is to encourage investors to police the role of corporate decision making. This theory, also described as the agency cost model, postulates that disclosures reduce the costs of monitoring an agent’s use of corporate assets and allows shareholders to monitor self-interested directors, leading to efficiency in corporate governance. The increasing emphasis on non-financial disclosures, such as environmental compliance, boardroom diversity and human rights due diligence, lend support to this theory.

In India, the SEBI (Issue of Capital and Disclosure Requirements) Regulations, (ICDR) as well as the SEBI (Listing Obligations and Disclosure Requirements) Regulations (LODR) stipulate that all publicly listed companies are to disclose material information. Although Indian courts have not adopted the fraud-on-the-market theory as the US courts have, the concept of materiality has been defined in a similar way. In DLF Limited v. SEBI, the Securities Appellate Tribunal (‘SAT’) observed, ‘Disclosure … which is required to be made in the offer documents, is one which, if concealed would have devastating effect on the decision-making process of the investors, and without which the investors could not have formed a rational and fair business decision of investment in the IPO’. In the matter of IPO of OneLife Capital Advisors Ltd., the SEBI clarified, “‘material’ means anything likely to have an impact on an investor’s investment decision … the test to determine whether a fact is ‘material’ depends on the facts and circumstances of each case.

Although the precise contours of materiality have not been laid down by the courts, it is clear that the term is to be construed liberally. The SAT further clarified in a recent decisionThe emphasis is on disclosure; not otherwise, which means disclose even when the issuer doubts whether there is materiality … ’. Given the extremely broad definition, it may be inferred that corporations may be liable for the non-disclosure of unprecedented events even if there are no guidelines from the
SEBI in that regard.

Materiality of climate change risks

            There is a huge volume of economic literature postulating that climate change can bring about the next financial crisis. The slowly increasing frequency and severity of natural calamities threatens the assets owned by firms, comprising the first category of financial risks posed by climate change. The second category involves the potential decline in stock value as the society transitions to more eco-friendly lifestyle – that is, the stock value of petroleum firms is expected to decline over the next few decades as the society moves to electric vehicles and the like. The third category of risks arises from the ever-increasing cost of complying with stringent and pervasive environmental regulations that can severely limit the profitability of firms – for instance, regulations on stricter air controls have the potential to reduce the output of a manufacturing plant by almost 5%, imposing an annual cost of
USD 21 million to the entire manufacturing sector.

 Given the financial effects of climate change, it is evident that awareness about these risks would affect the decisions of prospective investors and therefore amount to ‘material information’. Moreover, with the rapid rise of Socially Responsible Investing, nonfinancial information are playing a greater role in investment decisions. More and more investors are factoring in environmental concerns in deciding which companies to invest in – the emergence and rapid rise of companies like CDP that provide information about the environmental implications of a companies’ activities to potential investors, shows that climate change information is clearly material.

The obvious defence that most companies would resort to when charged with failure to disclose climate change risks would be that the management of the company was unaware of the degree and extent of the risks, as the financial impact of climate change is often hard to predict and take steps against. Recent investigations, however, have shown that this is not true. The ongoing lawsuits have revealed that the directors of Exxon deliberately concealed the information relating to potential damages to business operations from climate change. A study by the Center for International Environmental Law found that the entire global oil industry has been aware of climate change risks since as early as the 1980s but deliberately led efforts ‘to mislead or confuse the public about climate science … even when the industry’s own scientists were warning them about climate risks’. Even in India, shareholders of a number of public companies have expressed their discontent regarding the lack of information available to them about financial risks arising from climate change.

Conclusion

            While the US SEC is considering making it mandatory for listed companies to disclose their climate change risks, there is still widespread disagreement regarding the materiality of climate change disclosures. It is essential that securities regulators rethink their understanding of materiality, and recognize climate change risks as material information that ought to be disclosed.

Anik is a final year student at NALSAR University of Law, Hyderabad. The author is thankful to Rudresh Mandal and Karan Sangani for their inputs.

Corporate governance popcorn

The FT reports on AMC engaging retail investors (or meme stock owners) with free popcorn which resulted in a surge of new investors for the company:

The cinema chain’s new Investor Connect programme, which will also offers perks such as invitations to “special screenings”, underscores how the rising power of individual traders is attracting the attention of publicly listed companies and professional Wall Street investors.

As cinemas across the world struggle to attract audiences back after the pandemic, these measures seem appeal to retail investors not just as investors but also as consumers. This is reminiscent of crowdfunding and later equity crowdfunding which rely on customers or potential customers to invest in the company. As I had written (drawing from Professor Andrew Schwartz’s scholarship) in an article co-authored with Dr Nuannuan Lin:

It has been argued that CSF carries the ‘cultural promise’ of letting customers and audiences connect with content and, relatedly, allowing customers and audience to influence production decisions. There is also a case for the existence of non-financial benefits of equity crowdfunding, and these benefits include entertainment value, political expression, patronage for art, community-mindedness or simply altruism. (References omitted.)

Our article then went on to provide an example from Australia:

A recent example is that of Revvies Energy Strips Ltd (‘Revvies’), which completed the first CSF campaign in Australia. Its product was a fast-dissolving mouth strip that delivers 40 mg of caffeine. Since Revvies supplies the product to six national sports teams, some sports clubs and Olympic athletes from Australia, New Zealand and the United Kingdom, its co-founder was of the opinion that the new investors would also become endorsers and influencers. (References omitted.)

The rise of retail investors (thanks to social media use during the pandemic) might mean that companies will engage investors like AMC is doing, and like the companies raising funds through equity crowdfunding did, not only as investors but also as customers.

(While we are on the topic, Professor Christina Sautter explaining corp law concepts on tiktok!)

NZ signs the Artemis Accords – space sector in the country is set for growth

New Zealand became the latest country to sign the Artemis Accords which is a US initiative and contains a set of principles for space exploration (including, and this is the controversial part, extraction and use of space resources). Apart from New Zealand, countries that have signed the Artemis Accords thus far are Australia, Canada, Italy, Japan, Luxembourg, the Republic of Korea, the United Arab Emirates, the United Kingdom, Ukraine, and of course, the US. Brazil has announced its intention to sign and other countries might follow.

The New Zealand minister for Economic and Regional Development, Stuart Nash said that the agreement would allow New Zealand to grow its space industry, currently worth $1.7 billion. New Zealand’s Outer Space and High-altitude Activities Act, 2017 takes a performance based or tailored approach rather than a prescriptive approach, thus allowing for innovation. Since decisions of foreign licensing authorities are relied on in the initial few years of the legislation (s 51), cooperation with other countries through Artemis Accords seems like the next step. Indicative of the focus on corporate participation in this sector, Nash said:

Our space sector is worth over $1.7 billion and our space manufacturing industry generates around $247 million per annum in revenue. Signing the Artemis Accords facilitates participation in the Artemis program by New Zealand and our space sector companies.

Such collaborations are also likely to facilitate agreements and actions to address issues of sustainability (the most immediate concern being that of space debris). Foreign minister Nanaia Mahuta also added that “responsibilities of kaitiakitanga [guardinship] of the space environment” will be taken seriously.

One stakeholder’s food is another’s poison

The question giving rise to much debate recently has been whether companies (or their CEOs) should engage in political debates. An FT article (discussing current US debates and events) says:

…a shift in the politics around corporate America as chief executives used to being lambasted by the left as tax-dodging contributors to inequality and environmental degradation find themselves attacked from the right as “woke capitalists”. 

The article quotes the executive director of Consumers Research saying: “what we’re seeing is increasingly companies trying to distract from their failings by cosying up to woke politicians”. The FT describes Consumer Research as “a right-leaning group”.

Irrespective of the political leanings of the group or the type of politicians the companies in question are “cosying up to”, this should be a cause for concern. Of course, companies might also be playing to the galley i.e. stakeholders (which could include customers) but this is risky since it is not easy to discern stakeholder sentiment. Further, the more noisy voices of social media, might in fact not be a sizeable part of the stakeholder group. (I discuss these points in previous blog posts). So another reason for CEOs to refrain from engaging in these political issues is to avoid backlash from stakeholders (which is usually a diverse group). Edelman’s sage advice to CEOs therefore is ‘to stick to topics such as retraining where they have a clear mandate’.

Professor Anthony Grey has noted (in an article titled Corporations and their contributions to public debates (2020) 36 Aust Jnl of Corp Law 66):

the expertise and ability of corporate managers to properly assess community attitudes and values is highly questionable. This is not typically where the skill set of a corporate manager lies, and it is perhaps unfair and highly problematic to expect them to take on this role.

I agree with this premise (although not every corporate manager is alike). In any case, CEOs would do well to steer clear of divisive issues.

Apple & diversity

Yes I have thoughts about Apple firing Antonio Garcia-Martinez. They are nuanced but I’ll break them down so you can have a quick brief and then you can go ahead and read why I think these thoughts.

Thought 1: Apple firing someone after an outcry is not new. Its diversity chief “left” the company after an outcry over some comments about diversity.

Thought 2: I read the quoted text from Garcia-Martinez book (without reading the book itself) and it made me cringe.

Thought 3: This is a knee-jerk reaction by Apple and has not been well thought out. Apple could have done better for both diversity and for Garcia-Martinez.

Okay now here’s the full post.

Social media seems to have brought on a phenomenon where corporation react quickly to an online outcry without thinking through long term implications; and also without really digesting the message from the social media outcry in the first place. (I have a whole series of posts on this if you want to have a look.)

In 2017, Apple’s then VP of Diversity and Inclusion, Denise Young Smith, made some comments on diversity which became controversial. The comment was as follows:

There can be 12 white, blue-eyed, blond men in a room and they’re going to be diverse too because they’re going to bring a different life experience and life perspective to the conversation

She not only apologised for this later but also had to leave Apple soon after.

As it happens, she was not wrong. She was alerting people to the diversity that comes from life experience, irrespective of how one looks on the outside. Note that she used the term ‘too’ in her comment meaning that it is one type of diversity. One of many other types out there. I myself have written about the importance of viewpoint diversity for corporate governance. Rather than Apple getting behind her and helping clarify this, they fired Smith who was herself a black woman. So Apparently apple was more concerned about calming public outrage than getting behind a diverse executive. It was a poor move.

Fast forward to 2021, they hired Garcia-Martinez as an advertising technology engineer and fired him a month later. Their statement is as follows:

At Apple, we have always strived to create an inclusive, welcoming workplace where everyone is respected and accepted. Behavior that demeans or discriminates against people for who they are has no place here.

According to Garcia-Marinez there was no such discriminatory behaviour. Instead, it was the result of an outcry over a passage in his non-fiction book.

Most women in the Bay Area are soft and weak, cosseted and naive despite their claims of worldliness, and generally full of shit. They have their self-regarding entitlement feminism, and ceaselessly vaunt their independence, but the reality is, come the epidemic plague or foreign invasion, they’d become precisely the sort of useless baggage you’d trade for a box of shotgun shells or a jerry can of diesel.

Apparently, 2000 Apple employees signed an internal petition criticizing his hiring based on this passage. For his part, Garcia-Martinez has been contrite. The WSJ has reported that Garcia-Marinez said:

That book is not me now, it wasn’t even me then…To be honest, there was a literary persona. I was trying to create a style in my naive, first-time book writer sort of way, which in retrospect, I think was a mistake and I regret much of it.”

So not only was there no workplace misconduct as was implied in Apple’s statement, he has also expressed contrition for that passage. This could have been a teachable moment and Apple could have used it as a chance to have internal discussions about why that statement was problematic and how such generalisations can be harmful. It could have also put out a statement to that effect and ridden out the social media storm, choosing instead, to address the issues of diversity and equality in ways that would bring real and long-term change.

This knee-jerk reaction has resulted in an action that does not do right by Garci-Martinez. Neither does it help create long-term change in the company. What is more, there might be more internal resentment against diversity issues because of this.

I also meant to say something about Damore (which is different story in many ways but also similar in some ways) but this has already turned into a long post so if you want my thoughts on Google firing Damore, you can catch them here.

Virtuous volte-face

People change their mind all the time. When a CEO does it, we take note. We might even point out inconsistencies in what they say and do. But this post is not about such an inconsistency. This post is about Musk doing a volte-face about Tesla accepting bitcoin. And it is a virtuous volte-face.

After declaring that Tesla would accept bitcoin, its CEO, Musk, recently tweeted that ‘Tesla had suspended vehicle purchases using bitcoin’. His tweet went on to explain:

We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.

Cryptocurrency is a good idea on many levels and we believe it has a promising future but this cannot come at great cost to the environment.

There is truth to the climate change concerns around bitcoin mining. The main counter-narrative is that bitcoin miners use renewable energy. Here is a balanced article which discusses findings of a study on the issue:

Köhler says the findings don’t mean we can stop worrying about bitcoin – especially given electricity use per new bitcoin is growing – but we should put it in perspective. “On the one hand we have these alarmist voices saying we won’t hit the Paris agreement because of bitcoin only. But on the other hand there are a lot of voices from the bitcoin community saying that most of the mining is done with green energy and that it’s not high impact,” she says.

Getting a better handle on bitcoin’s carbon footprint will remain tricky until we have more accurate data on where mining takes place – information which Köhler and Pizzol say is scarce today.

Despite the uncertainty, it is safe to say that bitcoin mining comes with climate change concerns even its impact is not as much as some other activities.

But what explains the change of heart? Some analysts have suggested that the move is to assuage investor concerns on sustainability especially since Tesla is a clean energy focused company. Others mention perfectly valid business reasons. These would be plausible. But generally plausible explanations usually don’t apply to mavericks. For what its worth, I think that this is a genuine volte-face. This is a CEO (oops Technoking) who does not usually pander to public outrage. I think this is worth something because there usually are different views on issues and it is good to be able to take one’s time in evaluating the science (or relevant evidence if we are talking about other issues) and then change one’s mind if necessary.

Ideas on corporate purpose from Māori business forms

I have a short article titled Indigenous corporations: Lessons from Māori business forms out in the Alternative Law journal. It should also be of interest if you are thinking about topics like corporate purpose and social enterprises.

Here is a small teaser:

There has been much criticism of the existing paradigm of corporate law which is underpinned by the shareholder primacy theory according to which shareholder interests must be prioritised. The alternative theory, stakeholderism, has received a lot of interest over time. However, stakeholderism runs into the problem of not setting out a way to balance the interests of various stakeholders. In other words, when the interests of different classes of stakeholders (for instance employees and that of the community) are contrary to one another, it is not clear which of their interests should be prioritised. Proponents of the two theories tend to find common ground in the long-term shareholder interests view according to which interests of various stakeholders are taken into consideration because they will benefit the company in the long run. At first glance, Māori corporate governance might be viewed in this long-term shareholder lens because it seems to find a middle ground between the two competing theories. However, a closer examination of Māori business entities reveals that the complex structuring holds the key to the balancing act.

The article grew out of my class preparation for my company law and corporate governance classes when I used to teach at a New Zealand law school.

FREE MARKET FEMINISM

A REVIEW OF ACCIDENTAL FEMINISM: GENDER PARITY AND SELECTIVE MOBILITY AMONG INDIA’S PROFESSIONAL ELITE

This review first appeared in The Law and Other Things as part of a round-table discussion. The entire round-table can be accessed here.

Professor Swethaa Ballakrishnen’s Accidental Feminism: Gender Parity and Selective Mobility among India’s Professional Elite deftly analyses career pathways of female lawyers (some of whom are Partners) in India’s “elite” (Big Law) law firms. The interviews of these lawyers reveal the pathways to success for women in these firms. It is a refreshingly thoughtful book that goes beyond simply focusing on the number of women partners in these elite law firms. By comparing this analysis with that of female journeys in the traditional litigation firms in India and also with the Indian offices of global consulting firms, Ballakrishnen is able to tease out factors that might have contributed to the law firms’ feminist outcomes.

Gender does not matter until it does

Gender “is not an issue” for many of the interviewees (women in elite law firms) in Ballakrishnen’s book and having worked briefly in one such firm, I would have mostly agreed with this view at that time. The idea of the perfect worker, as Ballakrishnen writes, is not gendered in these firms. Additionally, the presence of female Partners sent the message that those top roles are available for both men and women. Male interviewees’ responses in these workplaces suggest, as Ballakrishnen points out, the role of the new law schools in normalising women as high performers. These law schools attracted a majority of the female students on the strength of the international market available to them, via the new law firms. By contrast, the litigation market where family connections still matter, attracted very few women.

Ballakrishnen explains that the new law firms offered egalitarian recruitment and promotion practices for two reasons. The first was the lack of existing family networks in the new market and the second was the need to fit into the global standard. Why did they need to fit into the global standard? While India’s liberalisation efforts in the nineties brought international investments and hence clients needing legal advice, the legal constraints on the entry of foreign lawyers into the Indian legal market meant that domestic law firms had to service global clients. Ballakrishnen reveals an interesting contrast to consulting where global firms were allowed to set up offices in India. The India offices of these global firms might have had the luxury of throwing up their hands in the face of local hurdles to gender equality; whereas the domestic law firms in India did not have that luxury. As a result, Ballakrishnen notes that they not only mimicked “modern, meritocratic institutional scripts” that they thought was followed in western law firms, they actually ended up outperforming those that they sought to mimic. The mimicking is also attributed to these new firms needing to distance themselves from the pre-existing litigation firms that were supporting restrictions for the entry of foreign lawyers into India. In any case, the mimicking and urge to be “global” seems to have resulted in a great value placed on meritocracy. Incidentally this seems to have resulted in gender parity at the Partnership level in Indian law firms.

Ballakrishnen’s use of the consulting firms as a comparative metric with which to understand gender trajectories in law firms is very interesting. The fact that the focus on meritocracy (without special gender-oriented measures) resulted in improved gender parity in law firms sits in stark contrast to consulting firms which seemed to have some gender-focused measures but still did not manage to retain women in the upper levels of the workforce. The reason behind the law firms’ success in retaining women seems to be threefold. First, by the time women in these firms have children, they are already at top positions with negotiating power and are able to negotiate their workplans to accommodate childcare duties. This was possible because of the new law schools that offered a five-year undergraduate degree which meant that lawyers from these schools started their careers early. The fact that the law firms were new also meant that they were eager to bulk up their partnerships thus fast-tracking career progression. Second, clients of these firms are mostly international and do not have gendered expectations in the way that domestic clients might. Third, the women in these law firms are able to access childcare from women in their extended families who are not in the workforce. The last of these reasons can clearly apply to women in other workspaces as well. Despite the relative success, Ballakrishnen points out that there was a high female attrition rate and one amongst the many reasons for women leaving was the inability to balance work and family responsibilities.

The particular issue of balancing childcare with work comes up at a later point in women’s careers which is the possible explanation for many lawyers (including myself while I was at one of these firms) feeling that gender was “not an issue”. For those who do manage to negotiate workplans around child care, Ballakrishnen concludes on the basis of her interview responses that there was cheap labour available in India for housework. In this context, I have to add that although the existence of cheap labour is a benefit, Covid-19 saw many Indians learning to use machines for many household chores that had already been automated in western countries. Lawyers in the elite firms discussed are well able to afford these amenities. An astute conclusion in the book is that most of these lawyers were able to call upon the previous generation of women in the family to help with childcare responsibilities. However, some women did not have this advantage either because the previous generation in their family was working or not located in the same city. I myself have witnessed this play out in my family when my mother, a busy career woman herself did not conform to the usual role of taking over child care responsibilities of her working daughter (my sister). As the issue becomes more common, the market for child care services in India is likely to improve manifold.

A significant point that emerges from the book is that the women lawyers who had managed to strike the right balance seemed to have partners that contributed to house work and childcare. This is worth stressing because although support from workplace policies can go a long way, support at home is important and not something that is commonplace in India. As the interviews of those in consulting firms show, women were likely to be penalised in terms of career progression for opting for flexible work options which were available in those firms. As more men begin to shoulder child care responsibilities and avail of flexible work options, it will start to seem like less of a women’s issue. It will be interesting to see if the post-Covid world has a more benign response to flexible work situations since the Covid era has seen both men and women working from home.

Class/ caste

The book’s final chapter suggests that caste/ class is a variable in the success of these women in elite firms. This seems speculative since none of the interviewees mention caste or class privileges or disadvantages and it is not clear whether data in this regard was collected.

Ballakrishnen compares two lawyers at the same firm saying that one of them was able to negotiate a work flexibility to accommodate childcare while the other had more difficulty with these negotiations because she was an “outsider”. The implication seems to be that she is an outsider in terms of either caste or class but this is not clear. While it is true that a pre-determined policy that all women within the firm may access when they need to would be simpler than each woman needing to negotiate her options, it is not clear that caste or class is a barrier here.

Implications (hopes) for the future

Ballakrishnen worries about what the situation would be after the “impending liberalisation” of the legal market. I am less hopeful about the liberalisation being impending than Ballakrishnen is but if it does happen, I am not as worried as she seems to be. She worries that foreign firms may merge with existing domestic firms and as a result, the partnership track would inevitably become longer than it currently is, thus taking away one of the factors that allowed women to negotiate their work plans to accommodate childcare. I would expect the market liberalisation to result in a wide variety of options for Indian lawyers – domestic firms that have merged with foreign firms, domestic firms that do not merge, and in time, foreign firms that set up shop in India. These range of options in a market will give lawyers (men and women) more choice and firms would have to respond by providing more than just attractive salaries to retain talent.

Accidents and intentions

The road to hell is paved with good intentions; but perhaps the road to something better than hell in paved with happy accidents? Since some of these accidents detailed in Accidental Feminism were brought about by India liberalising its economy in the 1990s, this might also be a story of free market feminism.

Thus, while I find the title of the book delicious, I would have to say that what Ballakrishnen calls unintended or accidental feminism, I see as free market feminism. I see the merit in calling it accidental considering the range of variables that needed to come together to make the “gender is not an issue” story come alive in Indian (elite) law firms. However, many of these variables were market responses to the liberalisation efforts (coupled with foreign law firms being barred from the country) in the nineties. If women lawyers in these firms needed childcare help, the existing family networks and a type of labour force came to the rescue. The availability of women from the previous generation meant that the female lawyers in question could depend on them rather than on domestic help. When this is not available in future, professionals in need are bound to get over their hesitation about employing people of a different caste/ class to perform childcare duties. In any case, I do not have the same hesitation as Ballakrishnen about allowing actors to use the term feminism even if they do not subscribe to the mainstream version of feminism, whatever that is. In fact, allowing the firms to take on that title may incentivise them to live up to it by pursuing more intentional policies. The only worry is that the intentional policies might inadvertently undo the gains achieved so far.

In this book’s account, the positive outcomes were unintentional. However, there may be well-intended actions (the introduction of gender quotas on company boards for instance) with negative consequences. It is important to be alive to the costs and benefits – of law, regulation, or even voluntary corporate action – to ensure that there is a net gain. On the other hand, when we see a net gain from actions, even if those are unintentional, we should not hesitate to take advantage of it. The focus on merit in these firms has worked, albeit with some issues. This book helps us identify the issues and consider improvements to the current model. As Ballakrishnen says, the time for this is now. I would just caution that any intentional actions should be well-considered.