Law firms may not have been embroiled in the Satyam scandal, but for once, just once, they’d like to steal a headline or two away from their financial services brethren.

It has become too commonplace to even mention. At the first sign of corporate misfeasance an accusatory glance, a blameful gesture is flashed in the direction of 'the lawyers'. A stare, some idle gossip, arbitrary finger pointing are all reactions that Enron, WorldCom and Tyco have engrained in the corporate consciousness the world over. But not so much in India it seems.

When Satyam Computer Company's B Ramalinga Raju stepped down as CEO of the company he founded 20 years ago after admitting to a fraud believed to be valued at US$1.6-2.0bn, the wrath of corporate India was directed solely at Raju, his promoter-brother and the company's auditors whose creative bookkeeping was seemingly at the heart of the scandal. In the immediate aftermath, anger has also been directed at the regulator, lawmakers and others - everyone, it seems, has attracted the ire of Indian business, with the notable exception of law firms, and with good reason; law firms were not as embroiled in this scandal as they have perhaps been in other corporate meltdowns. Indeed, one could justifiably state that firms were not involved at all.

But this isn't to say that law firms have been sitting idly by since the implosion at India's IT outsourcing bellwether or that they haven't been leading the charge in calling for an overhaul of the country's corporate governance framework. In fact, for many Indian law firms the past few months have been ones in which forward planning has gone into overdrive.

Not only are they planning how to capture a share of the regulatory and corporate governance advice work that is expected to arise as a result of the Satyam episode, but they are also readying themselves for what, it seems, will be their increasing celebrity. If Satyam has taught corporate India nothing else, it is the need for a closer relationship with law firms.

The professional services pauper

Of all the professions in India, it is arguably the nation's lawyers whose services are most undervalued. Auditors, accountants, financial planners, investment bankers and consultants, it seems, are more trusted counsel to Indian corporates then lawyers.

"The role of corporate lawyers is not what it is in the west," says Shantanu Surpure, managing attorney at Sand Hill Counsel. "Companies here look to cut costs wherever possible and legal bills are generally the first thing that gets slashed; companies have tended to use corporate lawyers sparingly, preferring to make use of in-house teams more."

But it is not just all about cutting costs. Indian clients have been slower than others to realise that while advice from external corporate lawyers may cost money, instructing a good one may, in fact, save them money in the long run.

"Clients in the past may not have always been quick to understand the commercial utility of using a law firm," said Abhishek Saxena of Phoenix Legal. "They have not understood the value that a lawyer or law firm can add to a transaction, leaving corporate lawyers greatly underutilised by Indian clients."

The 'business of corporate law' is indeed still embryonic in India. "Corporate law in India is a cottage industry. In the US or UK, corporate lawyers, transactional lawyers have been around for a long time. In India, you wouldn't have had anyone calling themselves a corporate lawyer 10 years ago - that was unheard of," says Suresh Shroff of Amarchand Mangaldas. Schroff's point is well established - as is the role that government enforced restrictions are playing in keeping it there. 

"Outside India, legal services are a business, here [in India] it is a profession; we still have archaic rules," says Rajiv Luthra of Luthra & Luthra.

That is the current status quo. But developments such as the lifting of some of the restrictions faced by Indian law firms, increased FDI into the country and a corporate meltdown are catalysts for the greater sophistication of the business of corporate law.

Short-term spike

Corporate India cannot ignore the role that law firms can play in aiding domestic economic development. There is agreement among lawyers that a post-Satyam India brings with it opportunities for their own growth that were perhaps not hitherto there.

"There is undoubtedly an upside to the whole Satyam debacle for Indian lawyers," says Rodney Ryder, a partner at Indian firm Kocchar & Co. "Clients will want to make sure that they are in a position to avoid similar things happening to them; they will be looking to make sure that their operations are spick and span. The immediate consequence for lawyers is an uptake in corporate governance work and regulatory advice. We have already received instructions to this end, and it's work that we haven't really done on a large scale before.

"A lot of work will emanate from what will be the want of the regulators to tighten things up," says Saxena. "And while things may not resolve themselves in a Sarbannes-Oxley type way, there will be a lot of work around for those who are willing to go after it."

And the regulators' search for the panacea for corporate India's ills is expected to muddy the corporate governance regime enough to keep firms busy in the near future.

Satyam will ensure that issues such as the role of independent directors and institutional investor protection remain at the forefront of regulator attention with the "demand for accountability" sure to provide firms with more than enough work to keep them busy.

"Will this mean that shareholders, institutional or otherwise, become more mobilised to the extent they are in the US? Only time will tell in that respect," says Surpure. "But one thing is for sure; the role of independent directors, particularly where they are family members will almost certainly come in for scrutiny."

Just as there were moves to 'self-regulate' post Enron, so too are Indian corporations going down this path. "Clients will reach out to lawyers more in all areas of business, I would suspect," says Saxena. "Many are already making attempts to 'self-regulate' and this will also bring lawyers more instructions."