Entry of foreign law firms will help businesses and law professionals

The decision of the Bar Council of India (BCI) to allow foreign lawyers and legal firms to practise in India, in a limited way, has far-reaching consequences for all the entities engaged in cross border trade and investments, and also firms and individuals engaged in legal practice.

For now, foreign lawyers and legal firms will be allowed to get registered with the BCI and then practice on transactional work such as joint ventures, mergers and acquisitions, intellectual property matters, drafting contracts etc. In fact, there is paucity of enough talent and experience in these areas and so, the inflow of know-how from well-established foreign firms that have been handling such issues for a number of clients in a number of countries since decades will only help local entities access such storehouses of knowledge. So, the restriction that the foreign entities will not be allowed to practice on Indian laws or appear in courts or tribunals will not really matter much, so long as they can advise their clients on the international laws and laws in other countries.

The stipulation that the BCI permission to foreign entities will be granted only on a reciprocal basis also need not deter many countries from opening up their legal field for Indian lawyers and legal firms in exchange for getting access to Indian entities seeking foreign expertise in the specified areas. The United Kingdom already allows Indian lawyers and legal firms to practice. Other countries like Australia, Canada, New Zealand, Singapore etc. also may have no problems in allowing Indian legal entities from operating there. In due course, more countries may open their doors to Indian entities vastly expanding the opportunities for Indian professionals, especially the younger ones.  

Historically, London has been the centre where most commercial laws have evolved starting from contract laws to the laws on banking, insurance, shipping etc. Many of the Indian laws and laws in many other commonwealth countries have followed the British laws, especially those relating to international trade. Some of the legal firms in Europe have been in the business of advising clients in various countries. When they start their operations in India, they may prefer to employ Indian lawyers, train them and give them access to the vast institutional experience available with them. Indian legal firms can also expand their operations abroad to give their employees better opportunities. Easier access to and spread of knowledge has only helped the professionals, their clients and their countries.   

 The General Agreement on Trade in Services (GATS) at the World Trade Organisation allows the member countries to treat the foreign entities differently from the national entities and limit the market access to specific areas and even specific numbers of entities. So, the BCI has enough flexibility. 

The Indian legal industry is in a state similar to the Indian manufacturing industry prior to 1991. The BCI has now started the process of liberalisation. Of course, only the first step forward has been taken and many details have to be worked out. Yet, there is no need to fear. Just as the Indian manufacturing sector became more efficient with the arrival of foreign direct investment, our legal professionals will also become better versed with the global best practices and exploit the global opportunities over a period of time.   

email: tncrajagopalan@gmail.com