Follow a phased, sequential approach for entry

Legal profession in India is different and distinct from the profession practised elsewhere in the world. It is more litigation-oriented as is evident from the fact that out of nearly 1.2 million lawyers in India (largest in the world) more than 1 million are litigation lawyers, practising mainly in district courts all over India. It is unlikely that these lawyers would be adversely affected if foreign lawyers were allowed entry into India.

Those who are likely to be affected are the transactional/corporate lawyers and the law firms. Indian law firms are now much better equipped to face the challenge from foreign law firms than these were about 20 years ago, when this issue was raised by Law Society of England and Wales with the government of India, which had always been sympathetic to the entry of foreign law firms. Society of Indian Law Firms (SILF) and the Bar Association of India supported the Bar Council of India in its vigorous opposition to entry of foreign lawyers.

Since then Indian legal profession has grown in stature, competence, knowledge technology, efficiency and speed. Past 20 years have seen growth of law firms in Mumbai, Delhi, Bengaluru, Chennai, Hyderabad, Ahmedabad, Kolkata, etc. These law firms are second to none in the world in terms of competence. Accordingly, these are much better placed to face the entry of foreign law firms, although in a phased manner, subject to the approval of the regulatory body, the Bar Council of India.

We suggest a phased sequential approach for entry of foreign legal consultants and law firms into India over a period of five to seven years.

Under Phase I, there is a need to reform the environment for domestic firms. This would include removal of difficulties in the LLP format. The Bar Council of India must clarify that practice of law in LLP format is permissible. There has to be clarification from the Income-Tax department that conversion of partnership firms to a LLP is not a taxable event. Bar Council rules need to be amended to permit issue of firm brochures, websites, directory listings, sponsorship of events, and other means of market development and information dissemination for a firm.

After completion of Phase I, foreign lawyers and foreign law firms may be permitted to have presence in India subject to certain conditions, such as prescribed qualification criteria, practise only their "home country" law, prohibited from practising, directly or indirectly, law of India. In the third phase, foreign law firms and lawyers may be allowed to practise, directly or in joint venture with Indian firms, in certain areas of law of India, subject to disciplinary jurisdiction of the Bar Council. Among other things, this has to be on a reciprocity basis - the ability of Indian lawyers to practice in the foreign jurisdiction on similar terms and conditions.

Lalit Bhasin
President, Society of Indian Law Firms, and managing partner, Bhasin & Co