The debate over opening up the legal sector has revived once again, with India and the European Union deciding to expedite talks on a free trade agreement (FTA), including opening up legal and accountancy services.

However, negotiations are not going to be that easy, with the Bar Council of India (BCI) and the legal fraternity still unwilling to soften their stand on globalising the Rs 750-crore legal services industry.

Legal experts seem to be divided. While most say liberalising the sector would bring unfair foreign competition since there is a lack of reciprocity, others think it will open up opportunities for young talent to realise their potential for growth and be on a par with their contemporaries in the West.

The Indian legal fraternity, led by Supreme Court Bar Association (SCBA)

president Vikas Singh and BCI chairman Manan Kumar Mishra, said foreign lawyers should not be allowed in unless it’s on a reciprocal basis.

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“BCI doesn’t allow Indian lawyers to advertise, [they] can’t have their website or solicit work and also cannot work on percentages. Our counterparts in the West don’t have any such restrictions,” said Singh.

Besides, Indian degrees are not recognised abroad. “Only those countries which recognise our degrees should be allowed to practice here,” the SCBA president said.

Mishra said apart from reciprocity, the policy should be subject to the Indian regulatory framework.

Debanjan Mandal, managing partner, Fox & Mandal said more ideas from around the world make law professionals sharper, better informed and more driven. “It is essential, however, to ensure a level playing field before we welcome foreign firms into India. One way to do that would be to only allow foreign law firms to advise on non-domestic laws ie, non-Indian law which is a reasonable restriction considering that they are not domain experts as well.”

Mandal pointed out two serious concerns: foreign firms will take over the business of domestic firms and will poach the best legal talent in the country. He added, “neither of these problems are deal breakers though. Effective policy measures can minimise both these harms.”

Lawyers said Indian firms are subject to certain business barriers that don’t apply to foreign firms. They can’t advertise their expertise or services, limiting their ability to reach clients, and are barred from raising capital from non-lawyers.

Mandal said a gradual and phased entry of foreign firms may be a prudent step as remommended by past Law Commissions. “The government should also negotiate for a reciprocal arrangement with the countries whose firms are interested in opening offices in India. These safeguards are essential for not only the domestic law firms, but also the legal sector as a whole.”

Rajiv Luthra, managing partner, Luthra and Luthra Law Offices said, India is committed to opening up its services sectors including legal, and accountancy services under the WTO, but “let’s not do it in emergency”.

“Having a law firm, it goes against my personal interests. Who wants competition? But then I chair a number of panels working on these issue, I have stakeholders — litigants, the companies that are doing cross-border transactions, junior bar — whose conditions have to be looked after,” Luthra said.

According to him, affordability is a big concern in India as foreign lawyers charge around 2000 pounds per hour, “and we hire a junior lawyer in that price”. “There are some unfair things here. Today I can’t have a website officially. I can’t solicit and take contingency fee unlike foreign lawyers. Is that a level playing field? First, let them open their legal sectors. And then, we can talk about reciprocity.”

However, some sections of lawyers believe that in a growing economy such as India, there can be plenty of work for everyone.

Kunal Vajani, BlackRobe Chambers and Court Member (India), ICC International Court of Arbitration, said, “Legal reforms are an important part of the economic prosperity of a globalising and modernising nation. Having founded India’s first UK style barristerial chamber, a modulated entry of foreign law firms would certainly not only bring with it global best practices in the legal arena, but also earned trust as well as confidence, both locally and globally.”

A chance to work with the biggest firms and minds

Harish Salve

I feel this will be the best thing for young Indians who would get paid on international scales and will get an opportunity to work with the biggest firms/ minds of the world. Our brains are no less than any of these, but there is a need for an opportunity and a work culture which we need an introduction to.

Look at how foreign consultancy firms like Deloitte, PriceWaterhouse, KPMG are working. How many Indians have become very successful chartered accountants because of them? Its all Indian chartered accountants in these firms. The same pattern will be adopted when allowing foreign firms to set up shops in India. Now what is the harm if foreign firms are allowed to set up their practice in India where only Indian lawyers will be hired to do the corporate and legal work? No English lawyer is going to practice in India.

Opening up legal practice means law firms like Allen & Overy, Freshfields, Linklaters and Slaughter and May of the world will come to India to set up India practice by hiring Indian lawyers. You may have a British partner who may come to advise on non-Indian law work, so, if he has an American or a British client who wants advice on English law, he may hire an English lawyer, but that it will do in any case whether he’s giving that in London or giving that in Delhi. It doesn’t matter.

This is just a scam to create confusion. So what is in the interest of the junior Indian bar is actually being sullied by big law firms. And I have never flinched from saying this. And those who say Indians will get run over are totally wrong. See the number of Indians here in London who are doing so well. I’m doing a case for GAIL, instructed by Stephenson Harwood partner Kamal Shah.

People who have no understanding and stakes about what it means are crying over it. The problem is that the big Indian law firms who have a best friend relationship with foreign law firms want all their work to come to them. And if Freshfields comes on its own, then Indian law firm will not get its work.

I have been practising in the UK for the last eight years and have never seen an advertisement by any of its big law firms like Freshfields or a Linklaters. This advertisement part is a biggest bogie.

If you want a level playing field, you have to sit with BCI and get proper regulations in place to advertise and then align them with the international best practices.

Where is the question of reciprocity? If 10 Indians want to come to London and set up a law firm to practice Indian law, nothing stops them. If Indian law firms want to start a firm in London and hire English trained solicitors, they can.

(As told to Indu Bhan)