For a growing number of securities law firms today, the most valuable legal battle is the one that never reaches a courtroom. For years, they thrived on a steady stream of enforcement actions, appeals and regulatory battles. Today, many of them are discovering that the bigger opportunity lies not in fighting the capital markets regulator, but in helping companies avoid getting into trouble in the first place.
A clutch of Indian law firms, who practice securities law, are pivoting their attention to advisory services, as litigation work has been shrinking over the last two years. A combination of increasingly detailed investigations by the Securities and Exchange Board of India (Sebi) and a growing preference among clients to settle cases has reduced the volume of litigation matters.
“There has been a visible shift towards advisory, preventive compliance and settlement strategy rather than only post-order litigation. Clients are increasingly seeking early risk assessment, settlement advice, compliance remediation and board-level advisory,” said Rohit Jain, managing partner at Singhania & Co.
The shift is showing up not just in client mandates but also in hiring decisions. Firms are steadily building advisory teams to meet rising demand from listed companies.
Shardul Amarchand Mangaldas has nearly doubled its securities advisory team over the past few years to about 15 professionals. About three lawyers in this team also represent entities in matters related to Sebi and the Securities Appellate Tribunal (SAT).
Law firms are also moving some of their litigation lawyers to the advisory services teams as ‘assistants’, said a lawyer at a Mumbai-based law firm.
"A lot of clients are doing proactive health checks to ensure compliance with Sebi norms. Our advisory team has expanded over the last two years. The number of retainers in security regulatory advisory teams has also gone up, as clients seeking advisory services has increased,” said Moin Ladha, partner at Khaitan & Co. To be sure, Khaitan has not seen a slowdown in litigation matters.
Mindspright Legal has increased the size of its securities advisory practice since 2024 to four associates and a partner. The firm also deploys its litigation lawyers on advisory matters related to orders passed by the Sebi and SAT.
Client preference
The shift reflects a broader change in the securities ecosystem caused by stricter Sebi orders and clients looking to wrap up matters faster through settlement or payment of penalties.
“Most clients do not want to go down the long and tedious litigation path as they can settle the matter without accepting guilt. People are realizing that they can pay up and move on. This has to some extent led to the work on the securities litigation drying up a bit,” said Sayantan Dutta, partner at Shardul Amarchand Mangaldas. The law firm started providing advisory services post-pandemic.
Data supports the trend. Sebi received 703 settlement applications in FY25, a 62% jump from FY24, while settlement collections jumped to ₹798.9 crore from ₹94.5 crore a year earlier. At the same time, appeals filed before SAT fell to 523 from 821.
Lawyers said many clients now view settlements as a commercially sensible option, particularly when the legal costs and uncertainty of prolonged litigation outweigh the potential benefits of an appeal.
“In cases where there is lower probability of winning the case, clients prefer going for payment of penalties or settlement, instead of paying legal fees to drag the matter out for long. For low-ticket penalty matters, clients may incur an average of 20% of the penalty amount as legal cost," said Sidharth Kumar, senior associate at BTG Advaya.
New economics
The economics has become even more compelling as Sebi has streamlined the settlement process. Lawyers said payments can now be made digitally through the regulator's portal, reducing procedural friction and making quicker resolutions more attractive.
At the same time, securities litigation is becoming more difficult.
"Sebi orders are getting more compact and strong," said Akshaya Bhansali, managing partner at Mindspright Legal. "Investigations are now intense and supported by technology, which helps catch manipulators more easily. Such a framework makes it difficult to defend cases. The client then prefers to settle or pay the penalty."
Mint had reported in December that though Sebi’s pace of investigating cases has increased, its case files are getting bigger to ensure less matters reach SAT. The market regulator now includes intricate details and connects dots between various individuals, especially in matters relating to market manipulation in its orders.
The regulator's investigative capabilities have also expanded. The investigations department has grown from a handful of divisions in 2023 to three investigation verticals comprising 23 divisions by 2025.
Adding to the litigation decline is also a lack of Sebi orders that have a substantial penalty. A Mint analysis of final orders passed by the market regulator between January and June shows that matters with penalties over ₹1 crore have reduced. There were only two final orders with a penalty between ₹1 crore and ₹4 crore since January 2026. Meanwhile, there were four orders with penalties between ₹1 crore and ₹60 crore in the same period in 2025.
"There is a growing preference for commercial resolution over litigation where the costs, timelines and uncertainty associated with an appeal outweigh the potential benefit of a different outcome," said Abhiraj Arora, partner at Saraf and Partners. "Companies today recognize that investment in compliance and regulatory advisory is akin to an insurance premium."
For law firms, that insurance premium is increasingly becoming the business model. Advisory services are provided to listed firms or those set for initial public offerings (IPOs) figuring out compliance norms, and clients seeking advice on litigation matters.