Why government officers learn business laws

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When we saw several government officers taking up the NUJS business law diploma course which was intended at entrepreneurs and managers, we were quite stunned. Naturally, we tried to analyse their career goals and professional objectives. Why would they want to learn business laws?

We came up with some very interesting observations. Before we go in to the details them, we will share profiles of some of them who have taken the course:

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Rabindra Kumar Bhattacharya

Ex-Col., Indian Army

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Yashvardhan Sharma

Legal Expert at Gujarat State Financial Corporation, Ahmedabad

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Raju Narayana Swamy

IAS officer(1991 batch), Secretary (Government of Kerala), Observer(Election Commission of India for 6 – Agartala& 7-Ramnagar (Tripura))

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D Raghavendar Rao

Law officer at Rural Development, Government of Andhra Pradesh in 2011

Why do civil servants want to learn business laws? How can government officers use business laws as a tool to achieve their professional goals? Here are some answers.

1.  Continuous learning requirements: Annual performance reviews and appraisals require government officers to continuously keep upgrading their skillsets. For this purpose, government officers pursue different kinds of courses that are available in the market. Of course, some courses may only be valuable on paper, in terms of the degree they impart, while others (this is extremely rare) may actually help them learn new things and develop additional skillsets.

2. Optimal exercise of government discretion and better performance of functions: The government today has a very real interface with business. Apart from PSUs which directly engage in business,government officers in various positions are often required to evaluate and consider the most appropriate entity for grant of governmentlargesse or for entering into a contract – e.g. a license to a construct a port at a specific location or conduct mining operations. Interested bidders would have submitted detailed documentation explaining their background (including commercial and legal structure) and technical capability to perform the task. The government officer would be required to enter into a contract with the most suitable bidder – understanding the motivations behind certain business transactions or the principles that guide the exercise of government action and how commercial arrangements work legally will be of tremendous help in the performance of his functions.This may also help them in better protecting the interest of the government / public interest.

Similarly, an official may be required to determine how government regulations apply to commercial arrangements. For example, revenue officers must be able to understand how licensing, manufacturing or various kinds of cost contribution arrangements work to be able to correctly apply tax laws to such arrangements. In this regard, they would be required to not only understand tax laws, but various other aspects of business laws.

Government officers also represent the government at regulatory tribunals – they are not required to possess law degrees. For example, an officer working for Telecom Regulatory Authority of India may be able to represent TRAI before TDSAT (the telecom disputes tribunal) with respect to a show-cause notice issued to a telecom operator for violation of TRAI regulations. Knowing about business arrangements can be useful in presenting his stance before the regulatory tribunal.

3. Business consultancy, entrepreneurship and new career opportunities: Business law skillsets can greatly complement the network built and sectoral expertise acquired over years of working with the government. Due to the vast exposure and domain expertise gathered over years of working with the government, several unique career opportunities emerge for civil servants, ranging from being an in-house consultant, an advisor or entrepreneur (as explained below), which they can capitalize on within a few years of starting work itself or after retirement (whether it is after VRS or post superannuation). For example, engineers who have worked for the government or who have worked as officers of PSUs can become extremely sought-after business consultants if they possess an understanding of business laws, commercial agreements and regulations, apart from technical knowledge.

Another feasible option is to work as a business consultant who understands his or her own field and on-ground aspects of how law applies to it. The market has huge demand for such engineers. For this purposes, having practical legal skills is an added advantage. These skills can be acquired through prior experience, which has its own monetary and time costs or by pursuing a systematic course such as this: Diploma in Entrepreneurship Administration and Business Law.

Government officers are known to wear different kinds of hats for private businesses – whether it is lobbying with the government for a beneficial policy for organizations operating in a particular sector (e.g. the hotels and hospitality industry or the IT sector), operating as financial or tax consultants or working as advisors on regulatory issues (such as competition, securities or tax issues), or working at the country’s best management consultancies (such as BCG or McKinsey), law firms, accountancy firms or as in-house advisors for companies. Some government officers even become independent consultants to private businesses and start a service business of their own based on such experience. These positions are very lucrative, but require a sound understanding of how commercial arrangements and regulatory laws work.

I know of civil servants who started law firms which are top-rated in their area of practice. For example, one of India’s most famous boutique competition law firms, K.K. Sharma Law Offices, was set up by an Indian Revenue Service officer who served the government for two decades. Similarly, many government officers have started their own businesses – recall that Air Deccan, the famous airline which first started price-wars in the airline industry, was founded by Captain Gopinath, who served the Indian Army. Similarly Ascent Capital, an extremely renowned private equity fund with investments in technology, power, finance and infrastructure space, was founded by a government officer who worked with the revenue department and then with SEBI. Similarly, I know of several army officers who have started their own private security agencies.

4. Opportunities as arbitrators: Government officers can also be appointed as arbitrators to resolve disputes around their area of technical expertise – arbitration is a mechanism where commercial disputes are resolved by parties by privately appointed adjudicators. For example, a government officer who has worked as a civil engineer at public works department (PWD) or at a public sector undertaking could be appointed as arbitrators in construction or infrastructure disputes. Arbitrators are extremely well paid, especially if they are on the panel of an internationally renowned institution such as the London Court of International Arbitration (LCIA), Singapore International Arbitration Centre (SIAC) or the International Chamber of Commerce (ICC). Arbitrators with technical experience are highly sought after and can be appointed as technical members on an arbitration panel, even if they do not have a formal LLB degree.

While their new avatar has been different in each case, government officers have also had to handle problems related to structuring their business (e.g. consider how to go about creating a venture capital fund), tax efficiency, hiring and incentivization mechanisms, corporate governance, compliance strategy, working of commercial arrangements and deal structures, regulatory provisions in the relevant sector, etc., in the course of starting another business, advising a business or for improving performance in their existing function.

In this process, certain career-related skillsets can be useful in enabling one to optimally capitalize on these opportunities and transition from working for the government to being an independent consultant, an in-house advisor or an entrepreneur.

Interested in knowing more? If you want to find out how business law can specifically help you with respect to your career, write to us at startup@ipleaders.in or contact Pallavi at 9582630056. You can ask Pallavi to connect you with other learners who have taken this course.

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