What if foreign firms are allowed to practice in India?
Aniruddha Choudhury 21 Sep 2016

What if foreign firms are allowed to practice in India?

The liberalization policy that India set out to undertake in 1991 will soon be seen making its way into the legal world. For years together, the Indian legal sector has operated as an in-house, choosing talent from within the country. However, winds of change in the form of the Bar Council of India Rules for Registration of Foreign Lawyers in India, 2016 which propose the entry of foreign firms in the country may change this situation.

Highlights from BCI’s proposed rules

- Foreign lawyers and law firms can set up offices in India after registering with BCI and paying registration fees and security deposits. This amount would be between $40,000 for individual lawyers and $90,000 for law firms.

- Foreign lawyers would not be allowed to practice law relating to courts, tribunals, boards or statutory authorities, but can argue for foreign clients in international arbitrations held in India.

These rules allowing foreign lawyers and firms to set up their offices in India are being debated in the last three months between various stakeholders such as the Bar Council of India, Society of Indian law firms (SILF), Federation of Indian Chambers of Commerce and Industry (FICCI) and various ministries including the Ministry of Home Affairs (MHA), Ministry of Finance (MoF), and Ministry of External Affairs (MoEA) etc. The Union government is in support of opening up the legal sector but has been facing resistance from BCI and SILF.

Although there is still time before deliberations between various stakeholders reach a conclusion, it is still worth contemplating what the Indian legal sector might look like once the rules come into force.

Considering that the BCI rules are finally passed, it would lead to a complete turnaround in the way legal firms operate in the country. Apart from sharing synergies, Indian and foreign firms will have to compete for real estate, method of payment (hourly/monthly), acquisition of talent.

To be at par with foreign firms and establish a level playing field, Indian firms will have to pull up their socks and be strengthened. A large number of fresh law graduates who in the current scenario struggle to find a job will have to face greater hardships as talent acquisition will become more selective.

However, there are various issues to be ironed out before this becomes a reality.

For one, under the Advocates Act, 1961, it is clearly stated that advocates must be citizens of India, or foreign nationals from countries that allow “duly qualified” citizens of India to practise law. Therefore, a new class of advocates, “foreign lawyer” may have to be created before foreign lawyers can practice in India.

Secondly, it does not put Indian and foreign law firms at an equal footing since Indian lawyers and firms cannot practice aboard under any provision.

Lastly, uncertainty and confusion is bound to prevail for a long time after the legal field is opened up to foreign players.

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