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Economic Times
19 hours ago
- Business
- Economic Times
AI suits are here
ETtech Top legal firms leaning on GenAI tools are cautiously ushering in a radical reform of the profession as they wean away the traditional practice of billing clients by the hour to value delivered services. The legal sector, generally considered slow to adapt, is now actively experimenting with AI. While concerns around confidentiality, billing model, and hallucination persist, Indian law firms are mapping a careful path. This combination of human judgment and machine intelligence could reshape the economics and efficiency of legal practice, provided clients are willing to evolve with it. The transformation is not immediate. However, the growing role of AI in routine legal tasks such as contract drafting, document summarisation, and due diligence is beginning to challenge the very foundation of time-based billing. Partner of Mumbai-headquartered law firm Trilegal Nishant Parikh is seeing tangible improvements in due diligence tasks by using tools like Lucio. 'We follow a mix of hourly and flat-fee rates,' he said. 'Clients want faster results but aren't always willing to pay more. The market is still anchored to time spent. But ideally, I'd want value-based billing to become the norm.' Some firms are going further. Khaitan & Co. has developed its own AI platform, KAI (Khaitan & Co. AI), with tools like and for internal research, drafting, and workflow automation. 'Faster analysis and automated document parsing are already showing results,' said Haigreve Khaitan, senior partner. 'But it's still early to attribute billing changes solely to AI. We remain flexible in our structures, but our current billing still depends on complexity, practice area, and client needs.'Firms are clear on their stand that 'AI is an assistant and not a replacement'. 'The 'lawyer in the loop' model is fundamental,' Khaitan emphasised. Kartik Ganpathy, founding partner at IndusLaw, also believes AI brings efficiency but not necessarily savings, at least not yet. 'The technology comes at a cost. Clients expect us to deliver faster, but they're not willing to pay more. We're not seeing profit margins increase yet, but maybe in 4-5 years,' that may allows only experienced lawyers to use GenAI tools, citing prompt quality as a key factor. 'You need at least 2-3 years' experience to get the best results from these tools,' he said. 'About 50-60% of larger firms already use GenAI tools, at least to some extent. 'These tools have been tested thoroughly,' according to Parag Srivastava, partner at Bombay Law Chambers. While BLC is still in the early stages of GenAI adoption, the firm recognises the potential. 'Due diligence has been streamlined massively. But billing models are still hybrid, a mix of hourly, flat, and blended fees. We'll only see a shift to value-based billing if clients see measurable gains.' ButAI hasn't yet moved the needle significantly on profitability. 'We don't make much on diligence work,' Parikh admitted. 'Margins are still very, very low.' Finally, client-side adoption will be the real game changer. 'Right now, there's fixed pricing for some GenAI-driven tasks, which makes sense. But once clients start associating AI with better outcomes, not just faster ones, we'll see serious movement toward value-based billing,' said Vasu Aggarwal, cofounder, Lucio, a widely adopted GenAI legal platform. 'The next 12 months are crucial. The Indian market is way ahead of its Western counterparts in GenAI adoption. If that momentum continues, pricing based on value delivered might become a competitive necessity,' added Aggarwal. 'Lucio is a horizontal legal AI platform but adapts vertically to specific needs,' said Aggarwal. 'The most prominent use cases are drafting and due diligence.' GenAI tools like Lucio can cut task time by up to 90% or 20% depending on the type of task. 'If drafting took 75 minutes before, it now takes 15. Summarising a document that took 40 minutes can be done in 10.'While AI hasn't been transformational yet, it's rapidly gaining traction, including in Tier-2 and Tier-3 cities.'Adoption will take its natural course,' said Aggarwal. 'Once that happens, the shift toward value-based billing will follow. Right now, there's no uniform model, but the mindset is changing.' Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. As 50% US tariff looms, 6 key steps that can safeguard Indian economy As big fat Indian wedding slims to budget, Manyavar loses lustre Why are mid-cap stocks fizzling out? It's not just about Trump tariffs. The airport lounge war has begun — and DreamFolks is losing Stock Radar: UNO Minda eyeing fresh 52-week high in next few weeks; check target and stop loss for long positions Buy, Sell or Hold: Antique recommends buy on Siemens; Avendus upgrades SBI to Buy post June quarter results Stock picks of the week: 5 stocks with consistent score improvement and upside potential of up to 25% Weekly Top Picks: These stocks scored 10 on 10 on Stock Reports Plus
Mint
30-07-2025
- Business
- Mint
India-UK CETA can pick up India's legal services exports due to wider market access, domain experts say
New Delhi: The landmark India-UK free trade agreement is expected to open the doors for law firms from either country to practise in the other, particularly in areas such as commercial contracts and international arbitration, said legal experts and practitioners. Enhanced bilateral trade and investments following the India-UK FTA will likely increase the volume of cross-border transactions, driving demand for legal services in mergers and acquisitions, intellectual property, and international dispute resolution, they said. The India-UK trade agreement signed by Prime Minister Narendra Modi on 24 July won several waivers for Indian exporters to the UK while protecting India's interests. Indian legal practitioners and law firms have been allowed to practise international law in foreign jurisdictions, including the UK. But it was only in May that the Bar Council of India notified amended rules allowing foreign lawyers and law firms to practise international law in India in a regulated, non-litigious capacity. 'Indian firms have long advised international clients across jurisdictions, and CETA (India-UK Comprehensive Economic and Trade Agreement) does not alter that existing access in any way," said Hemant Sahai, founding partner, HSA Advocates. 'Indian lawyers were always entitled to practice international law in the UK. The converse was not true. The real shift, if any, may be on the Indian side as CETA could potentially facilitate greater access for UK law firms into the Indian market," said Sahai. Ayush Mehrotra, partner at law firm Khaitan & Co., said as the India-UK agreement is expected to boost trade and investment, there will be increased demand for legal services related to cross-border activities. 'Indian firms specialising in corporate law, M&A (mergers and acquisitions), intellectual property, international arbitration, and international trade will be well-positioned to serve clients involved in these transactions," said Mehrotra. Increased trade and investment between the two nations also increases the possibility of disputes, creating an opportunity for India's arbitration lawyers and arbitrators, said Shashank Garg, senior advocate and arbitration counsel. 'As it is a common norm for such deals and contracts to subscribe to arbitration as their preferred dispute resolution mechanism, this may bring in a lot more work for Indian arbitration practitioners, reputed institutions based in India as well as qualified arbitrators," said Garg. The principle of reciprocity Policy experts said India's laws for foreign law firms and lawyers, embedded in the Bar Council's recent amendments, are protectionist. Foreign law firms are uncertain about coming to India under strict 'fly-in, fly-out' rules and limited scope of practice, Mint reported on 23 May. BCI's new rules require foreign lawyers to disclose the duration, purpose and the nature of legal work every time they visit the country. Reciprocity of market access is a key feature of bilateral trade and investment agreements, policy experts said. 'The principle of reciprocity is addressed more in spirit than in full equivalence (in the India-UK deal)," said Manuj Bhardwaj, executive secretary, Indian National Association of Legal Professionals. 'India still maintains restrictions on foreign law firms practising domestically, while the UK has a more liberal approach." Bhardwaj, however, said the India-UK agreement was a step towards more reciprocal market access. 'The CETA creates a structure within which reciprocal access can be expanded over time, particularly if India continues to explore phased liberalization in legal services," he said. The India-UK trade agreement also has a provision where both countries agree to work on mutual recognition agreements (MRAs), which have the potential to streamline market access for both nations, legal practitioners told Mint. 'Without a mutual recognition agreement for qualifications and licensing, Indian lawyers may still face regulatory hurdles in practising UK law or integrating into UK firms," said Bhardwaj. At the same time, the trade deal promises 'enhanced mobility" for professionals from both nations. 'Enhanced Mobility will simplify visa procedures and liberalise entry categories for professionals, including legal professionals, benefiting those in short-term assignments or advisory roles," said Mehrotra of Khaitan and Co.
Mint
02-05-2025
- Business
- Mint
Choppy markets take toll on pre-IPO deal talks
Turbulence in public markets has muddied another fundraising avenue for unlisted companies: Pre-IPO share sales. Wealthy individuals and institutions often snap up shares in private deals, tempted by potentially high returns in future initial public offerings (IPO). However, choppy markets have clouded many IPO plans, sparking caution at the pre-IPO stage as well. According to bankers and lawyers working on pre-IPO deals, investors who crowded such rounds earlier now want to bullet-proof their investments. 'Investors are increasingly asking for readjusted and discounted valuations, more controlling rights or stake, and negotiating on deal closing timelines to mitigate risks associated with the current market conditions," said Vineet Shingal, a partner at Khaitan & Co., which is actively working on several pre-IPO deals. Also read: Digital lender Kissht prepares for $225 million IPO, taps three bankers Some of the companies raising pre-IPO funds include Pine Labs, Porter, Groww, Zepto and Cred. Mint could not ascertain if pre-IPO deals are being renegotiated for them. Queries sent to the companies remained unanswered. 'Given the larger investment size in pre-IPO transactions, where investors have greater negotiating power, coupled with the stock market volatility, investors are trying to renegotiate terms on ongoing deals," said Snigdhaneel Satpathy, a partner at Saraf and Partners. Deals in the startup landscape slowed in 2023, with funding dropping to $7 billion from $25 billion the previous year, following a period of pandemic-driven funding surge. As late-stage deals reappear, investor interest leans on pre-IPO deals due to their perceived potential for clearer and quicker returns. However, market volatility and weaker tech listings have played spoilsport. Also read: TPG acquires Siemens Gamesa's wind turbine businesses in India and Sri Lanka FirstCry shares listed at a 40% premium, while Swiggy listed at a modest premium of 5%. Ola Electric listed flat but soared 20% on the day of listing. Yet, shares of these companies have shed 42-48% in 2025 so far. Meanwhile, CarTrade Tech that listed at a 1% discount is up 14% year to date. Since its September peak, the Nifty 50 has slipped 7%. Meanwhile, the India VIX, the market's fear gauge, has surged 52%, signalling a sharp rise in market volatility and investor unease. 'We are seeing a bit of a downside in terms of both HNI (high networth individual) and retail subscription in recently listed IPOs…," said Neha Agarwal, managing director and head of equity capital markets at JM Financial Institutional Securities Ltd. 'This could be due to factors like market volatility, slightly higher valuation, interest rates not coming down as early as expected and economic uncertainty, which have made investors more cautious." Consequently, several investors are repricing pre-IPO rounds or pushing for structured deals to reduce downside risk. 'We are seeing more instances of renegotiation now compared to the last quarter," Shingal of Khaitan said. 'There is certainly a wait-and-watch mode among investors. Family offices and HNI demand for pre-IPO companies, which was strong last year for companies such as Swiggy, FirstCry, Oyo has disappeared. It's hard to judge how public markets will eventually value a company as many IPOs from last year are below IPO price," said an India-market focused investor in tech deals for over 20 years. According to data from Venture Intelligence, Indian startups raised $355 million across 17 pre-IPO deals in 2024, up from $235 million across six deals in 2023. Also read: Why JM Financial's Agarwal counts on results to shape growth According to an industry watcher, a startup founder recently secured commitments from 10 investors for a pre-IPO round, but only two finally signed up since the rest wanted to renegotiate terms as the market turned turbulent. Mint earlier reported that reduced IPO appetite at a time of global turmoil following US president Donald Trump's tariff war has dried up new offerings in the market. 'More than a dozen venture-backed startups in India are currently in various stages of preparing for an IPO. Most—if not all—are choosing to defer rather than cancel their listing plans. The primary reason is compressed valuation multiples," said Iqbal Khan, partner and national corporate lead, JSA Advocates & Solicitors. He said this had resulted in selling shareholders being more open to realistic valuations and structured deals to generate liquidity through partial or full exits. 'Companies are re-evaluating their strategies in light of current market sentiment, leading to slight changes in plans that impact deal timelines and terms," said Amit Ramchandani, chief executive officer and head of investment banking at Motilal Oswal Financial Services .
