India has the second largest number of lawyers after only the US. There has been mounting pressure on the Indian government from other governments, particularly of the UK, for opening up professional services in India, including legal services.
Illustration: Jayachandran / Mint
Legal services in India have experienced a steady and continuous growth in the past decades as a consequence of the growth in international trade and the emergence of new fields of practice, particularly in the area of business law. Issues such as corporate restructuring, privatization, cross-border mergers and acquisitions, intellectual property rights, new financial instruments and competition law are generating an increasing demand for more sophisticated legal services, which are now readily available here. It is absurd to suggest that our legal profession does not have the expertise or experience to handle complex international transactions. Indian law firms have the requisite skill and technology to deal with high-profile work of any nature.
The legal profession in India is seeing a paradigm shift in its focus, style and orientation. This can be attributed to factors ranging from the changing face of legal education to new opportunities for lawyers and emerging law firms, and to technology and globalization. Law as a profession is no longer synonymous only with litigation. Specialization is the new mantra, and firms and lawyers are seen aligning themselves to specialized practice groups.
Indian lawyers have played a crucial role in helping formulate policy to enhance foreign investment and to create a favourable environment for foreign investors. Despite limiting circumstances, law firms, particularly over the last few years, have shown youthful dynamism by reinventing themselves to provide cutting-edge legal advice. Leading firms in different jurisdictions have worked with Indian lawyers/law firms, with several cross-country transactions in the fields of international commercial and financial law to their credit.
India did not undertake any commitment in legal services during the Uruguay Round of negotiations. It has neither offered any commitments in its initial offer, nor in its revised offer submitted at the WTO in the ongoing services negotiations under GATS. International law firms are not allowed to establish offices in India. Indian advocates are not permitted to enter into profit-sharing arrangements with persons other than Indian advocates. Foreign law firms are also prohibited from giving any legal advice that could constitute practise of Indian law. Despite this, they have set up surrogate practice and are working in the guise of liaison offices.
There are a number of regulatory impediments which hinder Indian law firms from competing effectively against foreign firms. Some of these, which severely limit the scope of growth of the legal profession are: (i) Partnership is the only permitted model for law firms. (ii) Limited liability partnerships (LLPs) or limited liability corporation are not allowed (although moves are afoot now for introducing LLPs). (iii) The number of partners is limited to 20. And, (iv) Advertising, even entries in law directories and websites, is barred.
Removing these constraints will tremendously enhance capacity building in the areas of international law, third-country law, patents law, IPOs and other forms of capital markets so that they can not only advise foreign companies in India, but also support Indian companies acquiring assets abroad.
Expansion into the international market by Indian law firms will not go unimpeded. Indian lawyers will continue to face competitive challenges from global players, principally the internationally focused legal practices operating from the US, Canada, the UK, France, Germany and Spain, but they would meet the challenge successfully.
We have very good and cordial relationship with foreign law firms, both socially and professionally, since the last three-four decades. If we need any guidance or expertise on foreign laws, we consult our counterparts on issues of law in the UK, US and Japan, and they too do the same. It’s a two-way traffic of mutual consultation and assistance, so we do not feel the necessity to set up offices overseas. We have the benefit of foreign expertise available to us everywhere, and we pick and choose whichever is the best.
An argument, particularly from the UK, is that Indian lawyers can practise law there and that India should reciprocate.
The reality is different.
It is very convenient to say that one has to simply pass a Qualified Lawyers Transfer Test (QLTT) to get the right to practise there. That obviously implies Indian law degrees are not recognized and one has to acquire a special qualification (the QLTT). Technically, Indian doctors are allowed in the UK, but strong protests have been lodged by the doctors that it is virtually impossible to get working permits or visas. The so-called right?exists?on paper alone.
The fundamental question is: Whose need is it to open legal services sector in India? It is not the demand of the business. It is not the demand of Indian lawyers. This is not on the WTO agenda. It is essentially a demand from UK law firms as these are witnessing a negative growth.
The Indian law ministry has filed an affidavit in the Bombay high court that anybody coming to India to advise on any law other than Indian will not be covered under the Advocates Act — which means they will not come under any regulatory body. The Bar Council of India, the statutory regulatory body for the profession, has opposed this affidavit.
The legal profession in an integral part of justice delivery system in India. The council has taken the correct stand in its categorical opposition to foreign law firms, which is further supported by the Bar Association of India and the Society of Indian Law Firms on this front. Let there be proper dialogue between the representatives of the profession, the government and foreign law firms. Any move on the part of the government of India to open the legal services sector to foreign lawyers without the full involvement of the Indian legal community and without discussions with representatives of the legal profession would be a retrograde step.
Lalit Bhasin is a Supreme Court lawyer and president of the International Indian Bar Association. Comment at email@example.com