Procedural hurdle for foreign law firms

The government has set the ball rolling to liberalise legal services, and allow entry of foreign law firms in India. In a meeting chaired by secretary, ministry of law and justice, on Tuesday, there was in-principal agreement among various stakeholders that included representatives of The Bar Council of India, the legal fraternity, and the sector, on the move to open up legal services. However, there are differences among stakeholders on certain procedural issues to allow foreign law firms to offer services in the country.

ENTRY HELD BACK

Ball starts rolling

• For liberalising legal services, allowing foreign law firms in India

In-principal agreement

• Among various stakeholders  on the move to open up the legal services

Differences

• Among stakeholders on procedural issues to allow foreign law firms

Regulator

• Circulates among its members the draft rules for foreign law firms

Last week, The Bar Council of India (the regulator of country's legal services) circulated among its members the draft rules for foreign law firms and lawyers to practice in India. These included the terms for registration with The Bar Council that allows them to offer non-litigation legal opinion in non-Indian laws, in association with Indian law firms.

However, the draft rules attracted criticism from Society of Indian Law Firms (Silf) that has many large- and mid-sized law firms as its members. The lobby group has been advocating a phased entry for foreign law firms and lawyers, spread over five to seven years. "The draft rules do not reflect our position," said Lalit Bhasin, president, Silf.

Bhasin said there was a need for internal liberalisation of the legal profession before opening up legal services. An Indian law firm or lawyer is not allowed to publicise his or her services, but that is not the case with foreign firms, he said. There are issues around ownership structure of foreign law firms. In India, companies are not allowed to set up a law firm.

However, many foreign law firms are registered as companies, or as Limited Liability Partnership (LLPs). "The draft rules in their present form may encourage surrogate practice by foreign law firms in India," said Bhasin.

Many in the legal fraternity feel that the government may have to amend the Advocates Act, 1961 that only allows an Indian citizen to practice law in the country.

An industry representative, who attended the meeting, welcomed the entry of foreign law firms to give opinion on foreign law. "There are some grey areas in the draft rules which need clarification," he added. The Ministry of Law & Justice has asked all the stakeholders to give a detailed presentation on their views in a meeting to be held first week of August. The meeting was also attended by senior officers of Ministry of Commerce & Industry, representatives from Ficci, Assocham and Indian Corporate Counsel Association.