In addition to lawyers protesting the illegal practise, the opening of a Nigerian lawyer’s law company in Delhi has reignited a controversy that has been going on for 15 years about whether or not foreign lawyers should be permitted to practise in India.
It is frequently claimed that India, together with London and New York, has the potential to rank among the top legal hubs in the world in the twenty-first century. Its common law heritage and proficiency in the English language are inherent benefits. But up until very recently, India was unaware of the crucial role advisory legal services play in luring foreign capital and expanding a services-based economy.
India is required to allow Member Nations access to the service sector as a signatory to the General Agreement on Trade in Services (GATS), a body of the World Trade Organization (WTO).
Except for services provided in the course of exercising governmental powers as defined by GATS, “services” would comprise any service in any sector. Any service that is not provided for profit or in direct competition with other service providers is included in the definition of “a service delivered in the exercise of governmental authorities.”
The practise of law is considered to be one of the services covered under GATS. Multinationals and international firms are expanding their presence in India as a result of the liberalisation and globalisation policies that are being implemented there. Quite a few foreign corporations and financial organisations are also expanding into India. Their business dealings in India are undoubtedly governed by Indian law, and since foreign law firms (FLFs) and foreign legal consultants (FLCs) aren’t entirely familiar with Indian law, they need the help of lawyers who are registered and actively practising in India. As a result, the International Bar Association (IBA) and the GATS have developed rules that call for the entry of international legal advisors and the liberalisation of legal practises in India. The Advocates Act, 1961, which established the rules for Indian legal practise, must be changed if this concept is to be put into effect.
The Advocates Act does not define “legal practise,” but a reading of Sections 30 and 33 suggests that practise is restricted to appearances before any tribunal, court, or authority. It excludes services like legal advice, paperwork, alternative conflict resolution strategies, and similar things. According to Section 24 (i)(a) of the Act, a person must be an Indian citizen in order to be admitted as an advocate on the State Roll; however, subject to the provisions of this Act, a national of any other country may be admitted as an advocate on the State Roll if Indian citizens who meet the necessary qualifications are allowed to practise law in that other nation.
According to Section 47 of the Act, no subject of any country that is specified by the Central Government in this regard by a notification in the Official Gazette prohibits Indian citizens from practising the profession of law there or subjected them to unfair discrimination there shall be permitted to practise that profession of law in India.
Fairness, uniform and non-discriminatory treatment, clarity and transparency, professional accountability, reality, and adaptability are the fundamental standards outlined by IBA with regard to the validity of FLCs. The IBA has established the following rules:
A person who is qualified to practise law in their home country and wants to be licenced to do so in a country (the host country) other than their home country is referred to as a “legal consultant.” In order to do this, they must apply to the host authority for a licence by following the procedure for doing so, subject to the reasonable conditions set forth by the host authority. This licence needs to be renewed. A legal consultant must include an undertaking with his application promising not to accept, hold, transfer, or otherwise deal with a client they find or are assigned unless they do so in a way permitted by the host authority, as well as to agree to and abide by the host jurisdiction’s code of ethics and all other rules and regulations.
It is up to the host authority to impose the reciprocity requirement and reasonable restrictions on FLCs’ ability to practise in the host country, such as prohibiting FLCs from representing clients in court or before tribunals, and forbidding FLCs from preparing any documents or performing any other tasks that the host authority has expressly designated for completion by its local members.
Numerous experts have expressed their opinions regarding the entry of FLFs and FLCs into India under the GATS. Although they are not against the idea, they do recommend that there should be some limitations, sufficient protections, and requirements in addition to reciprocity.
If there are any restrictions, they must be reasonable. The only fair limits might be obtaining an Indian law degree and practising Indian law for a set amount of time prior to entrance. A workable option might be the Canadian style of university education, examinations, and articleships managed by a joint committee accreditation. It may not be possible to apply any onerous restrictions limiting the clientele, the nature of legal activity, the fees to be indicated, the form of fees (Rupees or foreign currencies), etc. in order to uphold the principle of non-discrimination. It will be necessary to provide a level playing field and consistent rule of conduct in terms of reciprocity. While lawyers in many western countries are permitted to advertise, this is not permitted in India. In California, FLFs were only allowed to trade in laws that did not apply solely to California. Even in Singapore, Hong Kong, and Japan, FLCs are limited to working with exclusively international companies. Before allowing the entry of FLCs and FLFs into India, the treatment given to them in other nations and the laws and regulations created to control their practise there should be carefully examined.
Even if reciprocity were permitted, no Indian company would travel outside to conduct legal business because it would not be economically feasible, not because it lacked ability, expertise, or efficiency. The Indian government would not offer any aid to the Indian lawyers to help them advertise their business abroad because they lack the finances to open an office there. Even the large population of non-resident Indians would not want to hire Indian lawyers, even though they might be experts in their own field, because resident lawyers with thorough knowledge of the local legal system would be available to them at a reasonable cost, whereas legal experts from India may also need to pay for their travel expenses. For non-resident Indians, hiring Indian legal professionals would be quite expensive, and they might not receive fully effective service because the Indian legal advisors might not be very familiar with the local laws that apply. An Indian legal consultant would only be invited to a foreign country if an Indian party was involved in the dispute and the issue also included Indian law. Such events will be infrequent. Due to globalisation, the situation is different for foreign businesses that conduct international commerce. Because they prefer to rely on local experts who are already familiar with the firm’s operations, they demand international lawyers. The Indian law firms or the Indian legal consultants can provide international companies doing business in India with assistance on home country legislation if they need it. As needed by international companies, they can also create the legal paperwork or offer consulting services for company restructuring, mergers, acquisitions, intellectual property rights, or financial instruments. When thinking about the reciprocity principle, these factors must be taken into serious consideration. As a result, reciprocity needs to be effectively defined. It is important to make sure that the rules and/or regulations set forth are carefully followed; otherwise, as is usually the case, the rules remain on paper and what is actually done is quite different. As in the instance of the foreign law firms in India involved in the Enron deal, who had authorization from the RBI, which answers directly to the Finance Ministry, to set up liaison offices, the authorities either pay no attention to the irregularities or they overlook or ignore them. The RBI disregarded or ignored the fact that these legal firms had breached the very terms of their status as liaison offices.
Some believe that this should be viewed as a drive to raise standards within the profession via reciprocal relationships rather than as a danger to attorneys. The bar had a very high level when it was being practised by the legal titans years ago. Today, however, it is impossible to observe or encounter that level of professionalism. The legal profession has likewise completely given up on moral or human ideals and turned into a business. The bar has been significantly lowered. However, in comparison to the level of service provided to the clients, the costs charged have significantly grown. There is no attempt being made to correct the errors or malpractices that have crept into the legal profession. What would be the “increased standards” given this context? If the requirements are ever lifted, will the entire class of Indian legal professionals profit from the change, or will only a small portion of the legal professionals be able to gain from it? Can this action be deemed to be in the interests of lawyers in that case? The scenario as it relates to FLCs would be entirely different because all FLCs who wish to immigrate to India will be treated equally, whereas Indian legal professionals would be denied professional equality. The FLCs will also have foreign clients, and even while they are permitted to practise law in India with the fair constraint of earning a law degree there, they will undoubtedly require Indian lawyers for a while in order to complete their task. They will be able to hire and retain young lawyers with sizable pay packages thanks to their resources and the higher currency exchange rate, even though their fees will be much lower than in India. As a result, reputable Attorney’s/Firms Solicitor’s in India may lose their best employees and their work may suffer. American law firms have resources equivalent to the State of Maharashtra’s annual budget. With such resources, such FLFs would quickly replace the current law firms in India. An essential point to consider is whether our law firms could maintain their level of service and compete in this environment.
Large legal firms that operate internationally and are largely business entities created to advance the economic interests of their enormous client enterprises can be found in the United States and certain other advanced nations. These major international law firms’ size, influence, economic standards, and power will undoubtedly have a negative impact on our legal system. No matter how far we try, we just cannot match their size, power, and—most importantly—economic standard. The number of partners in an attorney/solicitors firm is restricted in this area. The Partnership Act limits the number to 20, however a foreign legal firm is exempt from this restriction. This restriction will need to be lifted in order to achieve uniformity, opening the door to additional partners, more finance, and more personnel.
Additionally, FLFs provide their clients “single window services,” which refers to services like accounting, managerial, financial, and other assistance in addition to legal counsel. The diverse partnerships will meet the demands of the customers in the various domains stated above. Due to the possibility of sensitive information being shared with non-lawyer professionals inside the partnership, such collaborations may jeopardise the integrity of the legal profession. Due to the potential threat to the lawyers’ independence, this would be detrimental to both the clients and the attorneys. The Bar Council of India will be required to create rules and regulations for such multidisciplinary partnerships or one window services once FLFs and FLCs are permitted entry into India. The essential concern is whether the quality of services and system accountability can be maintained despite the multidisciplinary collaborations’ allure. To include international legal activity under its ambit, the code of ethics requires revision.
Overseas law firms can come to India to conduct a limited amount of legal consulting for their foreign partners regarding their home countries’ laws, or they can apply for a licence to conduct a full-time, regular legal practise similar to that of Indian lawyers. Therefore, it will be necessary to create the laws and regulations to accommodate both of these scenarios. The FLFs may be subject to immigration and citizenship regulations if they want to come for regular legal practise. Those who only want limited practise are free to join with law firms in their own country without being scrutinised by the organised legal profession. Therefore, it is essential that a transparent, equitable, and responsible framework be developed to control and oversee the globalisation of legal practise.
In addition to international investors and businesspeople, the globalisation and liberalisation policies have allowed foreign commodities and products, including agricultural products and other things, to reach the Indian market. With these foreign products that are less expensive but might not be of higher quality, Indian goods and products must contend with fierce competition. As a result, Indian farmers and merchants face considerable discrimination in their line of work. We also have the case of Enron, which made headlines because Indian law was changed without likely recognising the negative impact it would have on the state’s electricity industries. The contracts made with Enron don’t seem to be in the best interests of the country or the state. Such issues, however, are not considered at the time the action is actually taken, but rather much later. As a result of our recent experiences, it is believed that we shouldn’t get carried away with the notion of upgrading our standards or putting ourselves on a par with other developed nations, where the principle of reciprocity may be observed and FLCs and FLFs may be admitted. To prevent any gaps or openings in the laws and regulations that might be put in place to protect the interests of the lawyers in our nation, we must be extremely vigilant, on the lookout, and well-prepared.
The nations that might be interested in India is another issue that might need to be taken into account. If not, would even non-member nations be permitted to enter India? Would these nations be WTO members? If only WTO members are permitted to enter, and a non-member country wishes to enter India, would access simply be rejected on the grounds that the non-member is not a WTO member, or will entry be permitted to demonstrate our fairness and equality of treatment? Due to India’s liberalisation, globalisation, and privatisation policies, many nations may be interested in visiting; yet, there is a very slim probability that Indian businesses will leave India and enter any other country. Even though the reciprocity concept is stated on paper, it might not be effectively implemented.
It should be noted that the “Lawyer’s Collective” has challenged the words “practise the profession of law” under section 29 of the Advocates Act in a public interest lawsuit filed before the Mumbai High Court. Several FLFs with independent liaison offices in India are among the petition’s respondents. It goes without saying that the petition mentioned above, whose outcome is awaited, allows for discussion and examination of all the aforementioned problems.
The Indian legal industry has seen a tremendous transformation recently, emerging as fiercely competitive and equipped to ride the current wave of globalisation. Therefore, it is not unexpected that global law firms are interested in setting up shop in India given that the country provides a full spectrum of legal services of equal quality for a fraction of the cost of what would otherwise be required. However, due to the Bar Council of India’s somewhat “protectionist” and conservative” stance” on the issue, international law firms are not allowed to operate in India. Some of the more established ones are slowly (and quite discreetly) establishing their presence in India, perhaps unable to resist the enormous potential of the Indian legal markets and anticipating the “globalisation of legal services” under the auspices of the WTO; this takes the form of them entering into associations with Indian firms and, in doing so, literally operating in India indirectly, despite the prohibitions aga The potential effects of foreign enterprises entering the Indian market have thus begun to catch the attention of both Indian lawyers and recent law school graduates. Will this support an expanding Indian legal market, or will it merely result in employment losses for recent law graduates?
India’s economy is, in reality, in the process of going global. In the process, the legal market will inevitably become more competitive with the global legal market. It may be more rational to accept that international corporations would eventually enter India rather than arguing over the benefits and drawbacks of opening up the legal marketplaces to foreign competitors. This does not, however, imply that their operations should be restricted, as doing so would cause them to drive out Indian enterprises. In addition to having a big impact on how the Indian legal market develops in the twenty-first century, law school graduates living in India may find a wider choice of employment prospects. For more details www.yojanaformpdf.in
