New Delhi: Kenneth Clarke is fighting a new kind of case. The lord chancellor, secretary of justice and senior lawyer from the UK visited India this week and met top policy makers and businessmen, all the while asking that lawyers in the UK be allowed to open shop in India.
The issue of foreign law firms being able to enter India is nearly a decade old. But this has been the most vociferous bid by the UK government to allow corporate law firms to enter the lucrative Indian legal market—valued at $4 billion (around Rs 19,600 crore) in annual revenue by some estimates. The UK government believes this can reach $12.3 billion by 2016 if the market is opened up, Clarke said in an interview. Edited excerpts:
What are the sectors of cooperation you are looking at?
Well, the areas, if you mean why we’re asking to start having talks about access to each other’s markets, is because you’re now a global economic player. What we’re interested in really is legal advice in the commercial field to business of all kinds. A businessman in a global economy requires good quality financial and legal advice. The British provide it through the City of London. And there are now powerful Indian world traders and multinational companies, some of whom are big investors in our country. In England, foreign firms are freely allowed to practice and the effect of that is it actually grows our legal sector. I’ve no doubt your best Indian lawyers would provide competitors for us, but actually the level of expertise in India, and the entry for Indian firms into this market (the UK) would follow from opening up. I think you would benefit from being more liberal about and allowing international firms like British firms to come in more freely.
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So it is non-litigation practice areas that you are interested in?
It is corporate advice principally. You have a very large number of lawyers because you have a huge population. But 90% of their work is litigation.
I’d be astonished if anybody’s lawyer was interested in taking part in litigation.
What steps did you take in this visit to further this?
I met the minister (Salman Khursheed), my opposite number for law and justice, and I met the attorney general (Goolam Vahanvati), I met the bar council. I met quite a few businessmen. I’ll give a company that’s well-known and is one of the biggest investors in our country. I met one of the senior people from Tata, but only to see what the business opinion was about.
And what happens when you open up the market is that the best of your lawyers thrive. But any businessman, not just these giants—I mean Tata is so big it can get the best legal advice it wants from anywhere in the world. But a medium-sized Indian businessman getting into international trade really does need to know how to access high-quality legal advice alongside his financial advice. He wants to go to an international quality company; the company actually probably employs lawyers of several nationalities, and in London we have hundreds of them. Given the size of India’s economy, and its sophistication and its role in the world, it is surprising India still has rules which I regard as 30-40 years out of date as a British lawyer, whereby you’re still restricting access to foreign firms. And I think it would benefit, the best of your firms would do extremely well.
The first thing anybody who came here would do is hire a lot of Indian lawyers and actually start introducing them to the best international practices. You have some very good ones already, but you don’t have enough.
The British, my own Bar Council, of which I’m a member, was ferociously opposed to opening up in the 1980s. And actually looking back at all the successes, we were just wrong (to oppose opening up). The British legal profession is now in a much healthier state. It’s one of the things that makes the City of London a leading centre for services of all kinds.
And it’s not just financial services. It’s legal services we provide to international clients. The best of your legal practices will explode on to the international market on a wider scale, not least because your costs are lower here. You’ll keep that advantage for about a generation.
What has the response been like when you said all this to your Indian counterparts?
Cautious, I would say. I think in principle, we got a very good hearing and I think there’s quite a lot of sympathy for the case we make. I think people think it’s a subject worth addressing. There‘s a feeling that, ‘all right, let us find out more about it and let us involve the legal profession more.’ I personally am confident that if the Indians drew on British experience they would discover how advantageous it was to the legal profession in Britain when we opened up 20-30 years ago.
Were any promises made?
No, no. I think what we need is a proper debate. Because, obviously, both sides have interests which they wish to explore. But nobody entered into promises. What we are intending to do with the ministry (of law and Justice)—department to department—is have a memorandum of understanding that includes cooperation on exploring this issue. It includes cooperation on a lot of things we have in common, simple things like comparing practice on judicial appointments and that sort of thing. And we think the two governments would like to draw closer together and compare experience. As you say, we have legal systems of common origin and the principles through our legal systems are remarkably similar. We approached an MoU (memorandum of understanding).
But the MoU didn’t come through.
That’s because half your government is travelling a lot, including the PM (Prime Minister)... So we haven’t finalized it. So to show that this didn’t mean anything had gone wrong we arranged for a letter of intent to be signed. Just in case people started saying, “has something gone wrong? Have you disagreed?”
We have not disagreed. We’ve more or less completed the drafting. My Indian colleague has to get it cleared by his cabinet. I would have to get the draft cleared by cabinet colleagues since you can’t enter into even an MoU on behalf of your country without the government collectively knowing what you’re doing. We just haven’t had time to finish that.
What’s the next step?
I think the minister might come to London. But that’s up to him. I would welcome him to London if he came. But I’m sure we’ll meet. We intend to meet in the next few months, whether in Delhi, whether in London, I’m not sure.