New Delhi: Indian laws may not allow foreign law firms to practise here, but local and foreign law firms are reaching out to each other and establishing innovative, non-financial relationships that go beyond mere referrals in an effort to provide better services to a client base that is increasingly becoming global, in terms of its requirement of legal counsel.
Allen and Overy, a leading international law firm and Trilegal, an Indian law firm, confirmed that they have entered into an arrangement involving client referrals, training, consultation and joint marketing.
Magic circle: The Allen and Overy office in London.
This is the first time Allen and Overy, which is part of the “magic circle” of law firms, has tied up with an Indian firm.
The “magic circle” is a term used to describe the top four London-based firms based on quality, size or geographical reach and profitability.
The previous decade witnessed numerous client referral agreements between firms from the UK and the US on one side and Indian corporate law firms on the other. However, Anand Prasad, partner at Trilegal said, “Referral agreements (of Indian firms) in the past have been with lesser international firms, (and it is only) now (that) the ‘magic circle’ firms have just about got interested in India.”
“Also, what makes this (agreement) different is that it brings the international practices to India. Our lawyers are getting trained by Allen and Overy. The earlier arrangements were pure referrals from clients; now the purpose is to improve technology and service,” he added.
According to Alex Pease, partner at Allen and Overy, the firm has been receiving a lot of work in India and the training programme for partners and associates at Trilegal would make Trilegal more effective while dealing with Allen and Overy clients. “We believe this will be this in the interest of our worldwide client base.”
Prasad said the arrangement would help a new firm such as Trilegal develop systems and practices without having to reinvent the wheel.
“It’s a big enhancement in our relationship with one of the best law firms in the world that is highly regarded for its innovation and forward looking approach. The Indian market has grown significantly. Indian companies are doing overseas acquisitions and mergers. So, the business environment has changed in the four-five years and this has got foreign firms more interested in Indian firms. So, such referral arrangements today make more sense than the ones entered into before, ” he added.
Both Allen and Overy and Trilegal, however, stressed that their referral agreement is “non-exclusive”, since either of them can have referral agreements with other firms, and “non-financial” as there is no profit sharing involved and, therefore, not in violation of the ban on foreign law firms practising in India.
“We recognize that this is a sensitive issue in India. Our absolute policy is to follow the substance of the Indian regulation. We believe in treating the Bar Council (of India) with the same respect with which we treat our law society,” added Pease.
Asked whether Allen and Overy’s strategy when the market opens for foreign firms would include acquiring Trilegal, Pease responded that it is “best to leave that question until the time arises.”
Trilegal’s Prasad, too, refuted that this agreement is a move made necessarily in anticipation of opening up of the market for foreign firms.
Lalit Bhasin, president of the Society of Indian Law Firms, an association of top law firms in the country said that since the agreement on referrals between Trilegal and Allen and Overy is non-exclusive, there has been no violation of Indian laws.
“But the training provided (to Trilegal) appears to be a first step of a possible integration of the two firms and this casts a doubt over Allen and Overy,” he added.
In December 2006, another magic circle member Linklaters Llp. entered into a client referral arrangement with Mumbai-based Indian firm Talwar Thakore and Associates. This arrangement left many Indian lawyers unnerved as they suspected such an agreement could amount to “surrogate practice” of the foreign firms in India.
Som Mandal, partner at FoxMandal Little, said that in 1995, international law firm Jones Day, headquartered in Ohio, US, had set up an India office that later shut shop after a reprimand from the Bar Council of India.
Mandal said international law firms had started working out ways to get around the bar on them opening offices in India.
Doug Peel, partner at the Singapore office of international law firm White and Case Llp. and head of its India’s practice, said that contrary to perception among some Indian lawyers, “both (Linklaters and Allen and Overy) the firms have complied with the law.”
Interestingly, while some Indian firms are finding focussed international partners others such as FoxMandal Little have set up independent offices overseas.
The firm inaugurated its London office on 18 February.
Mandal explained this move was to fulfil the growing demand from international companies for advice on investing in India and at the same time assist domestic companies that are investing abroad.
“Singhania and Co. Llp. (the first Indian law firm to do so) has set up a Llp. (limited liability practice) in London many years ago and they also practice English law, while FoxMandal Little in London is a branch office and is purely an Indian law firm practising only Indian law.”