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Are you feeling lost? Do you feel as if your senior just throws work at you and expects you to figure it out?
Dalal Street attorney is back. I try to write about topics and scenarios which you may encounter in the future, so that when the time comes, you don’t feel completely out of depth.
Last time, when I wrote a post on ECBs, I got a question in the comments –
How do we assess that the MAMP (i.e. Minimum Average Maturity Period) for the ECB has been complied for?
[Link to my previous post: https://www.legallyindia.com/convos/topic/278146-banking-finance-oversimplified-part-2-ecbs ]
Now this question is a bit surprising, because it’s pretty straightforward. As an A0, all you need to do is:
1. Understand for what purpose/ end use the ECB loan is being availed by the borrower [Internal Note: Read purpose clause of FA/ term sheet]
2. Check the ECB Master Directions for the corresponding MAMP number in the table and
3. Check the MAMP number provided to you by the borrower.
It’s quite simple. It’s not like you have to calculate the MAMP – that’s done by the accountants or the borrower and they usually provide the calculated MAMP number to lawyers in an excel sheet. MAMP depends on the repayment amount and what the repayment schedule looks like. There is an entire formula for this which we aren’t taught in law school or law firms. (Details later.)
But hold on. This post isn’t about me trying to do an in-depth explainer about ECBs. This post is about highlighting the mismatch in expectation between juniors and seniors - which then leads to frustration.
EXPECTATION v. REALITY
Why is the senior just throwing work at me? Why doesn’t he explain the entire thing properly?
Often times, from a senior’s perspective, it’s maybe like – I have told my junior X Y Z things, so all he has to figure out is point A, which he can do by reading up on this concept. Why does he find it so difficult?
But that’s not how it is playing out in the mind of the junior. If you have suddenly been put on an ECB transaction, it can be overwhelming dealing with a completely new set of documents. Since it’s your first time, you don’t know what is the process is or where to look. You can do a cursory reading of the ECB Master Directions, but it doesn’t talk about the specific process of checking the compliance. You are not even sure if you are looking in the right direction. Although you are trying your best to do good work, you end up making mistakes, and now you have to deal with negative feedback about your work and you have to stay up extra hours in the night to finish the work.
Without any prior knowledge of banking, you find yourself in a vacuum – not being able to do anything without someone’s guidance. You feel like a blind man who constantly needs supervision because you don’t know where you are headed. It’s the same reason why when you are on a DD, you panic when you don’t know how to approach the review process - do you go through all the litigation files uploaded on the data room, or do you skip those documents and ask the company for a summary of pending litigation? Do you review the additional SHAs in the data room that were not mentioned before, or is that beyond the scope of the DD?
And what happens when the guidance is missing? You feel stuck as if on a loop.
I was there too.
And it’s not like I didn’t try seeking help from seniors. In fact, I went to my senior partner so I could get some clarity. I asked him where could I read a bit more about banking so I could do my job well? He is one of the widely respected professionals in the space, so surely he would an answer, right? Unfortunately, he said that no such articles exist. Later, I was forwarded a publication made by the firm, but even those articles were too complicated for me to understand. I just couldn’t connect the dots. That client update was written for sophisticated clients. There was hardly anything written in plain, simple English for us juniors.
That is when I realised most mentors and seniors are so far removed from where you are in the process, it can be hard for them to relate. Their advice, though important, glosses over the details that really matter in the beginning. That’s why I was feeling pretty lost when I was figuring all this out.
So one of my goals is to give a behind the scenes look of the work that happens and more importantly - how to approach things - how do you read a term sheet, how do you approach a document review the first time, and just generally how do you figure things out. No gatekeeping, no fluff. Because at the end of the day, that’s what you need. Someone who’s a little bit ahead of you to chase and draw inspiration from. It’s what I wish I could have had when I was starting out.
Because you are probably already:
- skipping your meals due to that meeting that got extended
- sleep deprived due to that urgent deliverable
- wondering where all your time went on the weekends
- tired after working all the long hours
The last thing you need to be is anxious because you are not getting adequate information to perform your job well.
If you can relate to what I am saying, and you think my posts add even a tiny bit of value to you, comment “Let him cook”, and I will be back with more posts.
Regards,
Dalal Street Attorney
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P.S.: "Siri, play Sleepless by AP Dhillon"
Ve Main Raatan Nu Uth Uth
Roi Chan Ve
Meri Neendar Kidhar Aa
Khoi Chan Ve
Ve Main Raatan Nu Uth Uth
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Roi Chan Ve
Maturity Period: The concept of ‘Maturity Period’ for a loan is basically the time period till the day the loan becomes due for repayment.
Scenario 1: Let’s say you take a loan of INR 90,000 from a friend to buy the new iPhone 15, and you agree to repay him INR 90,000 after 5 months, the maturity period of this loan is - 5 months.
Scenario 2: Let’s say you use some fintech app to avail INR 90,000, and after a gap of 2 months, you pay back monthly EMI of INR 30,000, over the next 3 months.
Fun fact: In both the above cases, the ‘door-to-door maturity period’ is 5 months. But the ‘average maturity period’? It is 5 months in the first case but not 5 months in the second case. What? How come?
Technically this bit is ‘out of syllabus’ and not done by lawyers, but here is how MAMP is calculated:
https://www.adb.org/sites/default/files/publication/29723/maturity-based-pricing.pdf