How a young bunch of firms is helping startups navigate through legal hurdles

Divyanshu Poddar had been a serious model rocket builder since his college days. That passion made him plunge into entrepreneurship and he set up Rocketeers Research Institute, a tech-enabled platform that helps students build mini rockets.
This might sound interesting, but getting the required government permissions is an altogether different game. For most entrepreneurs, it is a tough task understanding licensing requirements around propulsion, contacting the right government organisations for permissions, and complying with regulations to secure an explosives license.

Poddar reached out to Anirudh Rastogi, managing partner at TRA Law, and the duo set about working on these complexities. “We have worked together in understanding regulation and licensing around propulsion and model rocketry in India, how to get the right kind of license procedures in place, and the government organisations to contact,” said Poddar, who calls himself the chief educator at Rocketeers Research Institute. “In model rocketry, there is an explosives license we have to get... there are some 136 explosive rules and you have to show compliance with all those rules.”

Rastogi’s firm, established six years ago, specialises in emerging areas like drones, crypto currency, space tech and artificial intelligence. TRA has worked with space-focused startup TeamIndus, fashion rental services provider Flyrobe, the Hyperloop India student team, online education platform Udacity, and food-delivery platform Swiggy.

With the startup ecosystem maturing and new ideas cropping up each day, regulatory scrutiny, too, is increasing.

Lawyers, who have always advised on term sheets, shareholder agreements, cofounder agreements, and other funding-related queries, are increasingly advising on emerging technology and its possible legal ramifications. Their practice is now at the intersection of law, policy and technology. Several startups reach out to these specialist law firms, contributing a significant chunk to their revenues.

“We have a sizeable startup practice across the firm. In the startup world, there is the capital piece. Also equally, there is the ‘how do we do what we do’,” said Samuel Mani, founding partner at Mani Chengappa & Mathur, also founded in 2012 and which gets about 30% of its business from startups.

The law firm has advised various clients on the legal implications of the multiple data flows in their organisations, a crucial focus area with privacy laws becoming stringent the world over, particularly with the European Union’s General Data Protection Regulation becoming effective from May.

“We ask (clients) to tell us every type of data they access. We help them figure whether the data is subject to privacy legislation and if they need this data for their business, and draft appropriate policies and take the necessary technical measures. This includes helping them put in place appropriate technical and contractual measures to protect the confidentiality of their clients’ customer data,” said Mani.


A common thread among these law firms is their overall grasp of the startup industry and how they stay abreast with technology. Nikhil Narendran, partner at law firm Trilegal, used to be a coder. “I read more about tech than law. Without understanding technology, it is difficult to do what we do,” he said. For Mani and his partners, their time at technology outsourcing giant Infosys has helped them understand engineering and sales.

Working with startups comes with its set of demands. The law firms might have to reduce their rates so the startups can afford them. It is also a bet they place on a startup, almost like an investor, because not every startup can end up becoming big and give the law firm long-term business. Legal advice for new technology startups has to be nuanced, almost like predicting how things can turn out in emerging areas.

“Working with clients at an early stage is an investment–you charge lower than for your more mature clients, and spend time researching new areas of law and technology and the business model. That kind of investment you can do only when you are really motivated about the client,” said Rastogi of TRA.

The law firm, which gets about half of its business from startups, has set up a separate public policy team to research and advise on emerging technology areas.

Anupam Sanghi, founder of Anupam Sanghi & Associates, said the biggest lesson she imparts to startups is that whatever a startup does, however new, there is always indirect regulation and it is best to be prepared. Startups “think they are not regulated but they are. That is what leads to problems.

For example, if a technology company has a tech solution (for cab-hailing), they cannot get away by simply saying, we are a tech company and not a cab company at all,” said Sanghi, who has worked with ecommerce firms and cab-hailing companies on the regulation front. “Regulators need to understand how their business model is different but beneficial.”