By Dhruva Kumar Singh
The significant incr-ease in cross-border trade and investment flows due to globalisation is also fostering global integration of the legal sector. This trend presents both challenges and opportunities for the traditionally conservative sector worldwide, including in India.
Many trade treaties and agreements, in addition to facilitating trade, have begun incorporating provisions for the cross-border movement of legal personnel. The General Agreement on Trade in Services of 1995 includes provisions for the movement of services, including legal. Similarly, several regional agreements have established frameworks to support this, such as the North American Free Trade Agreement (1994), the ASEAN (Association of Southeast Asian Nations) Framework Agreement on Services (1995), the Comprehensive Economic and Trade Agreement between Canada and the European Union (2016), etc.
However, these treaties allow for the cross-border movement of legal personnel only on a temporary basis and under regulatory oversight. Amid the near-total unification of markets, the EU stands out in this regard. The EU introduced the Lawyers’ Establishment Directive (Directive 98/5/EC) to encourage greater integration of the union’s legal market.
In India, the issue of cross-border movement of legal personnel arose through litigation. It was alleged that certain foreign law firms had established offices in India in an unauthorised manner. This was challenged in the Bombay and Madras High Courts. Ultimately, the case reached the Supreme Court of India, which passed a judgment in 2018 stating that only advocates enrolled under the provisions of the Advocates Act, 1961, are permitted to “practise” law in India.
Nevertheless, the court permitted foreign lawyers to make “casual visits” to India to provide legal advice under a “fly in and fly out” arrangement and instructed the Bar Council of India (BCI) to establish rules on this matter. In 2023, the BCI introduced regulations allowing foreign lawyers to visit India and offer legal advice based on the principles of “reciprocity” and the “fly in and fly out” model, subject to specific conditions.
Regulatory bodies worldwide are gradually recognising the need to facilitate the cross-border movement of legal personnel. China has chosen not to leverage its substantial economic power to exclude foreign legal firms. Instead, it has focused on enhancing legal education and fostering experience-sharing to improve the competitiveness of its domestic legal sector. According to one estimate, around 250 foreign legal firms operate in China. Similarly, the Brazilian Bar Association successfully addressed opposition from a segment of the bar to foster greater collaboration between foreign and domestic law firms.
The growing internationalisation of legal practice is an undeniable reality. The rise of global legal hubs in cities like Singapore, Dubai, and London is evidence of this trend. Legal issues related to environmental, social, and governance compliance, data privacy, digital laws, international transactions, etc. are gaining increasing importance. Addressing legal issues in these areas necessitates coordinated transnational responses.
In response, organisations such as the International Bar Association have also developed standards over the past two decades, covering areas like international arbitration, legal ethics, and the independence of the legal profession. These standards aim to bring greater uniformity to legal practices worldwide, despite the regulatory and cultural differences that exist across jurisdictions.
The traditional legal ecosystem based on national boundaries is facing significant disruption due to the rise of “legal tech”. Technologies such as artificial intelligence (AI) and borderless cloud-based data rooms are not only challenging national regulations but, in many instances, questioning fundamental legal principles. In this new paradigm, clients, who once played a central role in the traditional legal framework, have been replaced by “users”. There are questions as to how AI will align with national laws and how the algorithmic assumptions used by computers to deliver legal outcomes will be scrutinised. These are just some of the issues that the global legal community must address.
In this context, it is essential to acknowledge that the legal ecosystem is not only becoming increasingly global but it is also undergoing a profound transformation. The global market for legal works exceeds $1.1 trillion, a size comparable to that of the global information technology services market. Historically, approximately 40% of this has been concentrated in North America. This regional dominance is gradually shifting towards fast-growing economies such as India, China, West Asia, and Latin America. This surge is driven by factors such as rapid economic growth, ongoing diversification of economies, and even complexities of regulatory framework.
To keep up with the evolving landscape, the Indian legal sector needs a quality revolution. One of the key areas for transformation is legal education. With a few exceptions, the legal education system often carries a perception of mediocrity. This underscores the need for a curriculum overhaul that includes exposure to foreign laws, legal tech, and other modern elements. Foreign laws, for instance, are generally not taught at the graduate level in Indian law schools.
Like any other profession, the legal field cannot afford to remain low-tech. While some large law firms have started using AI, data analytics, and similar technologies for case analysis and record management, and the government is promoting digitisation through initiatives like e-Courts, technological literacy among lawyers remains limited. Rather than viewing legal tech as a threat to the profession’s viability, its adoption should be encouraged by incentivising lawyers to offer smarter, tech-driven values to clients. In this context, fostering technological innovation to provide smart solutions for clients and improve access to justice is crucial. In addition, there is significant potential for establishing state-of-the-art innovation centres within the framework of public-private partnerships, particularly for legal start-ups.
The Indian legal sector should embrace these trends and competition they bring and lead the way in the second quarter of this century.
The writer is chief controller of accounts, ministry of law and justice, Supreme Court, and ministry of corporate affairs.
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