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GC interview: How Sapan Gupta grew Bajaj Finance legal in 12 months (and how law firms may see less of its banking work in future)

Sapan Gupta: Predicting the future
Sapan Gupta: Predicting the future

When 28 years after its birth, India’s most-diversified financial institution that’s not a bank, Bajaj Finance, looked inward, it realised it was short of a legal team comparable to the company’s overall size and rate of diversification.

The company’s legal department was understaffed: a total of six in-house lawyers present to handle the documentation and litigation arising out of a portfolio of 11 non-banking financing (NBFC) businesses.

The ship, in need of expansion, was also unmanned – there was no general counsel (GC). Then deputy head of legal at Standard Chartered, Sapan Gupta, had never in his 14-year-long career, assumed a steering-the-ship role in terms of designing the organisational set-up of an, as yet non-existent, legal team.

“[It was exciting because] it wasn’t just replacing the earlier [legal] officer or plug and play,” says Gupta who stepped into Bajaj Finance in September 2014 as its first ever Chief Legal Officer (CLO), as reported by Legally India at the time, and took up the “exciting challenge” of taking the headcount of legal to 28 in the next 12 months.

One-time expenditure

Bajaj Finance, which started in 1987 as Bajaj Auto Finance, financing the purchase of two- and three-wheelers, has now expanded to financing consumer durables, lifestyle, monthly instalments and other consumer products, finance for small and medium enterprises, vendors of large auto makers and even wealth-advisory services, among other products.

This results in a voluminous requirement for legal documentation such as borrower documents, vendor contracts, retail contracts, various third party documents, information technology contracts, documents related to the company’s own borrowings through qualified institutional placements (QIP), among other documents.

This is all volume-based, standardised work, Gupta explains, and the in-house legal team currently only takes care of “small changes” to the standardised documents.

Gupta is currently taking the assistance of seven empanelled law firms – Shardul Amarchand Mangaldas, Cyril Amarchand Mangaldas, SNG & Partners, Phoenix Legal, P&C Legal, Indus Law and Khaitan & Co – for the standardisation of processes and policies.  All have specialised banking teams.

But the NBFC holding assets with a value of Rs 35,000 crore, is planning to embark on a long-term strategy of doing all the above work in house, says Gupta.

The way forward

Aiming to bring down the cost by 30 per cent within the next three years, following this strategy, Gupta has set up three legal teams within the company.

  • The corporate team to deal with internal policy and documentation.
  • A litigation team to deal with tax issues and consumer complaints against the company.
  • A litigation team for recovery suits.

These three bands report to six officers, who in turn report to Gupta.

Gupta adds that his additional innovation with the department’s structure was to centralise some teams to work out of the main office, and decentralise the others to work out of the branch offices, depending on the kind of matters they have to deal with.

With enthusiasm, he talks about “hiring management trainees from leading national law schools” to help him organise this structure and the day-to-day working of the legal team.

NLU Delhi and NUJS Kolkata management trainees are currently working with Gupta and the company.

Gupta’s team at the moment is a mix of experienced professionals, fresh graduates and interns who could be absorbed into the department at graduation.


Gupta’s 15-year legal career is a stream of in-house roles in the banking and finance industry, broken only by a short two-year-stint at law firm Sidley Austin. The 2000 Delhi University law graduate was already familiar with the expectations from a lawyer working in the business-realm.

“In-house teams are culturally closer to the business as they understand its nuances and products, which isn’t the case when an external law firm is empanelled.”

He added that external law firms provide pure legal advice, but the an in-house team has to “balance the needs and requirements of the parties and have to structure their opinion according to the basic business aspirations of the company.”

However, with him now reporting, for the first time ever, directly to the chief executive officer (CEO) of a company, Bajaj Finance has catapulted him straight to the role of key decision-maker also on business matters, broader than just building the legal team.

“Working on higher management is different as one has to interact with senior management and help in strategic decision making of the company. A chief legal officer has to balance business and legal skills in supporting all the other branches of the company,” he comments.

He describes his work at Bajaj Finance as “Proactive and Reactive.” “Proactive work includes advising senior management in major transactions, coordinating with the management team and hiring.”

“I make it a point that as a leader, I am grounded and always available at my office for all work on actual transactions when needed.”

Reactive work, he says, “relates to unannounced issues which are brought to me depending on the gravity of the situation.”

As an in-house counsel, “one has to balance our relationship with law and the overall functioning of the company without disturbing the pace of the company”, he remarks. Integration of legal and business is of utmost importance and sometimes the trickiest role of an in-house counsel.

For better optimization, “one has to be a gatekeeper and enabler and not police”, he says.

Dot-com dreams

Banking and finance in India is a fast-growing sector at the moment, in need of integration with information technology, according to Gupta. For lawyers, what this means is that even though the practice is volume driven and repetitive, there is promising scope for innovation as well.

“While in 2010, [NBFCs] contribution to the sector was 10.7 per cent, today it is 15 per cent. So, there is a lot of scope for young lawyers who are looking to work in this sector,” he notes.

However, he says that volume-driven, repetitive work, which also pays less eventually pushes young lawyers with a few years of experience in the banking and finance sector, over to the M&A, corporate and private equity side.

That said, the Information Technology law in its current form leaves a lot to be desired, when it comes to regulation of emerging new technologies such as online payment wallets, online agreements and online stamp duty, and lawyers can do more on the policy front to bring change.

“Technology would push the law to change, and digitalisation and technology will be the guiding force in future and revolutionise the industry,” he predicts.

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