Proponents of the economic liberalization of India’s legal services sector had been waiting since 2012 for a Supreme Court ruling on whether to allow offshore law firms and lawyers to practice in the country.
Last week, a bench headed by Justices Adarsh Goel and U.U. Lalit interpreted the law, as it stands, as prohibiting foreign lawyers from carrying out either litigation or non-litigation work in India on any permanent basis. Rather, they can only take up tasks in the country on an advisory basis, whereby they “fly in and fly out.” The court handed the Bar Council of India (BCI) regulatory control over such assignments. However, it also said it was not opposed to liberalization of legal services and that the government could enact legislation to open the sector up to offshore lawyers and firms if it desired.
The ruling was on the BCI’s appeal against a 2012 Madras High Court judgment that said foreign lawyers and law firms could practice law in India if they met BCI rules and requirements, as set out in the Advocates Act. The 2012 judgment did not stipulate regulatory oversight.
The BCI has firmly opposed any entry of foreign lawyers and law firms – primarily to protect the Indian legal services sector. It is also concerned that it might not have the wherewithal to effectively regulate foreign legal practitioners.
Speaking to Asia Times, Dushyant Dave, a senior Indian Supreme Court lawyer who represented the London Council of International Arbitration, said that the Supreme Court’s ruling was “not pragmatic, and a setback for India.”
“The world may need India or not, but India certainly needs the world, with 1.2 billion poor people,” he said. “There is a crying need for new technology to come in to improve agriculture and irrigation to create hundreds of millions of jobs, we need sophisticated technology and foreign capital investment. Foreigners [investors] would be much more comfortable if they could use their own legal counsel. It is not something the Supreme Court should have stalled. To fly in and fly out [to give advice] is ridiculous.”
Union Minister for Law and Justice Ravi Shankar Prasad, whose government has been actively pushing for the globalization of the legal sector to boost economic activity, told Asia Times he would be able to give a concrete response only when he is back from his tour of Patna, and after speaking to all stakeholders.
Not a major setback
Senior Advocate Indira Jasing, founder of Lawyers’ Collective, which first took the matter to court, told Asia Times the Supreme Court’s ruling had vindicated her organization’s stand.
“Economic development requires a level playing field,” she said. “Right now there is none. Foreign lawyers would be free to advertise, Indian lawyers are not; foreign lawyers work on contingency fees, Indian lawyers are not allowed to do so. Moreover, there is no reciprocity; we cannot practice in their jurisdictions.”
Jaising added that there was nothing to stop foreign lawyers from providing pro bono services in major cases involving human rights, where their expertise in international law and comparative jurisprudence could be useful.
Kian Ganz, the editor of the legal news and analysis website LegallyIndia told Asia Times that “not allowing foreign lawyers and law firms to set up offices and carry on full-fledged practice in India [will] not make a major dent in opportunities for Indian lawyers and graduates; after all, the number of hirings they would do in India would be only a minute drop in the ocean.”
“I cannot accept that foreign capital is the panacea for the Indian legal profession. Capital always has strings attached. The focus of reform must be the clients and the stakeholders in the profession”
He pointed to research indicating that it would be presumptuous and premature to assume that the entry of foreign law firms would translate into a deluge of jobs for Indian law graduates. As for arbitration, he said that a major chunk of international commercial arbitration, as it relates to India, is conducted in London and Singapore.
A study by the consultancy firm RSG Consulting found that in 2017 foreign lawyers and law firms were not overly keen to set up business in India.
Suhail Nathani, managing partner at Economic Laws Practice, a top-tier law firm in India, argued that calling the apex court’s judgment detrimental to India’s legal services sector was inaccurate. “The obvious result is that the government is now unimpeded to legislate on this sector,” he said. “The arbitration scene is already being revamped. Every year India produces a large body of common law-educated lawyers who are well qualified and comparable to the best. The judgment does not bar foreign lawyers from participating in international commercial arbitrations and I hope that they will draw upon the local pool of talent to serve their clients in Indian arbitration matters. They will certainly be pleased with the local talent.”
He disagreed with the view that the judgment would be to the detriment of Indian law graduates. “To expect that the entry of foreign law firms will change their future, I believe is misleading. The profession is changing from within. That is what will give them a bright future. Central decisions for the firm they are a part of are best made from their own jurisdiction, not by some distant foreign committee. In a global scenario, Indian revenues will be insignificant for a multinational law firm, so India will never drive the firm.”
Nathani added: “I cannot accept that foreign capital is the panacea for the Indian legal profession. Capital always has strings attached. The focus of reform must be the clients and the stakeholders in the profession. This does not require foreign capital.”