A metamorphosis

The disruptive effects of the pandemic have prompted in-house counsel to evolve or be rendered irrelevant, writes Nitin Mittal

There is a tide in the affairs of men, which, taken at the flood, leads on to fortune; Omitted, all the voyage of their life is bound in shallows and in miseries. On such a full sea are now afloat; and we must take the current when it serves, or lose our ventures” – Julius Caesar, Shakespeare

Taking a cue from the wise words of Shakespeare, we find parallels in the unprecedented circumstances that continue to affect the world on account of covid-19. The outbreak unexpectedly and rapidly altered the business landscape of the country. A complete lockdown was imposed for citizens and businesses (except essential services) and a constant stream of notifications was issued by the central and state governments to companies.

Some were in sync with the situation, and others were contradictory in nature. For companies, this put pressure on resources and budgets, and put key litigations on hold. There was also dwindling employee morale and looming uncertainties to deal with. General counsel (GCs) had to immediately advise on business continuity by deciphering the various regulations on the safety and health of employees, and also advise on various directions for ensuring the payment of wages/salaries to employees and non-flexibility to terminate certain employment contracts. The challenges of managing ambiguity in a crisis were never greater.

GCs can either grab the opportunities that have been presented in these difficult times to transform themselves, or be rendered irrelevant. The effects of the pandemic can be viewed either constructively or negatively. Every crisis does present an opportunity for those who are adept at change management, are resilient and demonstrate perseverance.

Nations, businesses, individuals, nature – all have been impacted by the pandemic. Economic cycles have been disrupted in almost all countries, with companies experiencing degrowth, a hit on profitability and a cash crunch. With strict lockdowns enforced across the country from the end of March until the end of June, companies faced disruptions to manufacturing, supply chain and demand, as well as a cash crunch in meeting obligations including payments to workers and employees.

The government was also faced with a gargantuan challenge to manage the pandemic, as well as ensuring that human life, safety and livelihoods were protected. The central government issued numerous notifications at the federal level under the Disaster Management Act and the Epidemic Diseases Act. This was compounded by notifications and guidelines at both state and local level.

There was a constant dilemma over whether to comply or risk prosecution and, in parallel, challenge these notifications. These decisions depend on the nature of the company, its culture, its risk appetite and other complex factors, and advice to management will vary accordingly while considering short and long-term scenarios.