16 Jun 2017
12 min read
Over the last two decades, demand for corporate lawyers has seen a surge. With the commercial sector growing rapidly after the liberalisation of Nepal’s economy—and with it, the volume of financial transactions growing multifold—corporate law firms in Nepal have seen much business come their way. Almost all major business entities, at some point or the other, require the services rendered by corporate lawyers. Today, more than two decades after the establishment of the first few corporate law firms in Nepal, the demand for corporate lawyers has really taken off.
What is a corporate lawyer?
A corporate law firm is a business entity formed by one or more lawyers to provide businesses assistance with legal matters. These lawyers, known as corporate lawyers, help you create a robust legal structure for your business and provide you with legal advice to protect and grow your business.
“Corporate lawyers offer their expertise on a range of corporate matters, which include project financing, private equity, joint ventures, mergers and acquisitions and so on,” says Shikhar Pandit, Managing Associate of Gandhi & Associates. “We help businesses structure their transactions to protect their interests and sort out legal requirements.”
To understand what a corporate lawyer’s job entails, let’s suppose you want to start your own company. When you start a company, you want to limit your personal liability as well as the taxes you’ll have to pay. But in order to choose a business legal structure that best suits your business, you need to have a good grasp of how business legal structures work. There are various types of business structures in Nepal: Sole Proprietorships, Partnerships, Corporations, and Limited Liability Companies. You have to choose one that aligns with your interests, because failing to do so can result in undesirable outcomes such as high tax payments on your part and loss of personal assets. You may even have to close down your business. This is where a corporate lawyer comes in.
“As a businessman, you will seek to nourish your business and grow it within the jurisdiction of the law. And that is what we help you achieve,” says Pandit. “Corporate lawyers paint a clear and accurate picture of how you can run your business. We help you figure out the best way to conduct transactions and mitigate legal problems by helping you work within the framework of existing laws. We play the devil’s advocate. We hope for the best but plan for the worst to help protect your business.”
How the sector has evolved over the years
The first corporate law firm in the country, Pioneer Law Associates, was founded in 1982. “When we started out, corporate law was not even considered a career. Pioneer was the first firm to establish the concept of specialised corporate law firms in the country,” says Anup Raj Upreti, Managing Partner at Pioneer Law Associates.
In Nepal, the corporate sector started to grow only after the process of liberalisation started in the 80s. Acts related to foreign investments and industrial entrepreneurship were being promulgated, and large private companies were being created. Prior to that, the country did not see the sort of economic activity we see now; there weren’t any foreign investments, and most big businesses were state-owned entities. “It was only after 2008 that the economy really started surging, and with it the corporate law sector too saw a boost. Earlier, a lawyer’s work was limited to solving family and land disputes. But for the past decade or so, specialised corporate issues have kept us busy,” says Upreti.
Corporate law firms usually have separate litigation and transactional departments. The transactional department advises clients and handles transactional legal work (such as drafting contracts, handling legal applications and ensuring compliance with current laws), whereas the litigation department represents clients in court. Within corporate law, there are a lot of sub-sectors that the lawyers focus on, like company laws, contract laws (employment, sales, services), tax laws, labour laws, trademark laws, intellectual property rights, bankruptcy laws, licencing, and project-financing deals.
The allure of corporate law as a profession
The major sectors that corporate law firms are involved in are hospitality, small local companies, hospitals, hydropower projects and telecom companies. Many corporate law firms represent major multinational companies and deal with major foreign investments. All the sectors that corporate lawyers are involved in—be it financing, banking, hydropower or tourism—are key sectors that contribute to the country’s economy. And the role of a corporate lawyer in ensuring smooth large-scale transactions is pivotal.
A corporate law firm is usually made up of associates, senior associates and partners. Partners are co-owners of the firm, while senior associates are senior lawyers who work under the partners. An associate does research and drafting work and assists the senior associates and partners. If we look at their salary scale, a partner’s salary can range from a few lakhs to Rs 25-35 lakhs per month, depending on the complexity of the work they take on and the basis of their contracts. Most partners and associates in Nepal charge multinational companies at hourly rates; partners charge around USD 200-300 per hour while associates charge around USD 120-150 per hour. As for local companies, they mostly work with monthly retainers or are charged by the hour (USD 50 per hour on average for local companies). First-year associates earn around Rs 45,000-Rs 50,000, whereas interns receive a salary of Rs 15,000-Rs 20,000.
But despite the hefty salary corporate lawyers can command, there is still a lack of young corporate lawyers. Out of a graduating class of, say, 40 students, only five or six applicants take up corporate law, say experts. “One of the reasons why this is happening is because most lawyers in Nepal are generalists,” says Anjan Neupane, Managing Partner at Neupane Law Associates. “A lawyer’s practice and his/her recognition in the market are what define a lawyer’s work. And in Nepal, lawyers do not want to specialise in a certain sector because generalists get more work. There are also many lawyers who have the licence to practice but get into other careers instead because working in corporate law can be a very demanding job.”
Some corporate lawyers also say that the quality of education in Nepali law schools is not on par with international law schools, which means many students need to go abroad to study corporate law. Moreover, different countries have different LLB (Bachelors in Law) course durations; pursuing a law degree in Nepal means you have to study the subject for five years, while law schools in the US entail a four-year undergrad course and an additional three-year course; studying in the UK means three years of law school. After completing their LLB, students have to sit for a bar exam in the country in which they want to practice. On passing this exam, a licence to practice law is obtained.
“Many students who receive an education outside of Nepal choose to work overseas instead of coming back and working here,” says Semanta Dahal, Partner at Abhinawa Law Chambers. “I believe the government should focus on retaining future lawyers in the country by providing better schools that produce young lawyers of a high calibre.” And not all the law students who choose to remain here will be able to succeed as corporate lawyers. “Business people will need to rely on you during their toughest times, which requires you to be on the top of your game at all times. There are volumes and volumes of facts and cases you have to be familiar with; you need to understand how a business works, understand why your client is doing what he/she is doing, and have a good business acumen,” says Neupane. “There is a lot that goes into standing your ground and representing your client. It’s a demanding field and the clients are demanding too, but you also command good fees for the services you offer.”
Pandit, who earlier worked at Freshfields Bruckhaus Deringer, a multinational law firm in London, says, “The way we work in Nepal and the way people work internationally—the two are poles apart. Furthermore, the laws of Nepal aren’t bad per se, but they are not necessarily implemented as they should be. So a corporate lawyer needs to know how to operate in such circumstances.”
One of the fundamental problems, many corporate lawyers say, is that the government doesn’t consult lawyers whenever it introduces a new business law. “For example, the first amendment of the Company Act 2063 (2006) was recently passed by the Parliament of Nepal. While amending the law, the government should have sought the suggestions of lawyers who specialise in the topic. We could have collaborated together to make it easier for companies to do business in the country. That unfortunately did not happen,” says Upreti.
Disharmonised regulations, an apathy towards foreign investments, and poorly drafted, ambiguous laws that are outdated or unregulated are some of the factors that corporate lawyers have to run up against. But if you can navigate the terrain, you can make quite a career for yourself as a corporate lawyer.
The number of practicing lawyers in the country is somewhere between 2,000 and 3,000. And there are currently less than 10 law firms, who employ just about a 100 corporate lawyers. “Of course, the corporate sector in Nepal is only just evolving. The growth of the corporate law sector will depend on how many firms a market can sustain. And we definitely will need more corporate lawyers as more businesses pop up,” says Dahal.
The future of corporate lawyers
Experts believe that now is the right time for young lawyers to join the sector. “The quality of work that is being carried out and the volume of transactions that are taking place are signs of where this sector is headed,” says Upreti. “A few decades ago, law as a profession was not seen as glamorous. Back then, students who didn’t score good marks—those who got a third division in their SLC exams, would pursue law,” says Upreti. “Of course, the marks you get in an exam does not determine whether you will be a good lawyer or a bad one, but how a law degree is perceived has changed over the years.”
Adds Pandit, “If you compare the scenario now to how things were six to seven years ago, we’ve seen a sea change. Earlier, the situation was such that a businessman would start a business with sole proprietorship just to dodge taxes. They would then forget about the laws that bind businesses. If problems arose, a certain amount of money would be paid off to officials, and the matter would be closed. Things are changing now. For all the new businesses that want to grow legally, corporate lawyers are a must to help their growth.”