The question is not whether to allow entry of foreign lawyers in India, but the question is until when can entry of foreign lawyers be prevented in India, argues Kaden Boriss Legal LLP founding partner Hemant K Batra.
India is a signatory to the General Agreement on Trade in Services (GATS) and is consequently under an obligation to open up the service sector to the Member Nations.
"'Services' as defined under GATS would include services in any sector including the `legal profession'. If India fails to provide a level playing field to foreign lawyers, it could run into the risk of facing complaints before the Council for Trade in Services of WTO where after India would be forced to take corrective actions.
I am anticipating that it would actually become a political decision because a large section of Indian lawyers who are opposing the entry of foreign lawyers are basically into advocacy or court practice i.e. litigation.
Badly judged
The recent judgment of the Bombay High Court in Lawyers Collective Vs. Bar Council of India & Ors has restarted the debate on the entry of foreign lawyers and the meaning of the legal profession.
As per the judgment, `practising the profession of law' includes litigious as well as non-litigious matters. In other words, if one is not enrolled as an advocate, one cannot draft any legal document.
With due respect, I beg to differ from the judgment for the following reasons:
1. If the judgment is to be applied in its present form then none other than advocates can draft legal documents in India. What will happen to chartered accountants, company secretaries, engineers and non-enrolled law graduates who are already doing legal documentation work. What about deed writers who sit outside Tehsils and Registries to draft conveyance and lease deeds, affidavits, wills etc. These are all legal documents. What about warranties and guarantees drafted by engineers? This judgment is like Pandora 's Box which has the potential to open flood gates of chaos.
2. When the Reserve Bank of India (RBI) had stated that liaison office can neither render services nor generate income then where does the question of practise of profession arise? It was a different matter, if the liaison office was found guilty of breaching the terms of the permission letter and found to be rendering services but that was not the case.
3. The Government's argument was that law practise means practise in the court of law, but in my opinion it would also include drafting of pleadings, rendering legal opinions and assisting clients in regulatory compliances. If we go by the judgment, only advocates can do that. Would the Bar Council now direct millions of non-lawyer professionals to not engage in any kind of legal or para-legal documentation?
4. Perceived in the light of this judgment, what would be the fate of non-lawyer power of attorney holders, who are engaged in para-legal activities on behalf of their clients, friends and colleagues?
5. The judgment not only abrogates the RBI permission letters but has also reinterpreted the term `legal profession', which will have wide ramifications.
Split the profession
In my view the legal profession in India needs to be bifurcated into two parts - law practice and legal services by bringing in legislative changes unless the Supreme Court of India decides to reinterpret the law laid down recently by the Bombay High Court.
Law practice should include practice in a court of law, drafting of pleadings, appearing in courts and issuing legal opinions. While legal services should include work like legal documentation, corporate and commercial advisory, regulatory work etc. This principle is also embodied in the Advocates Act, 1961 which regulates legal practice in India. Though `legal practice' is not defined in specific terms under the Act but a constructive analysis of demonstrates that practice is restricted only to appearance before any court or any judicial forum. It does not include legal documentation, arbitration and other legal or paralegal services.
The foreign lawyers and law firms may be allowed to render legal services to begin with and later if there is not much opposition they could even be permitted to practice law.
Reciprocal
As of today the Advocates Act provides that a person shall be qualified to be admitted as an advocate on the state roll if he is a citizen of India.
Now, subject to the Act a national of another country may be admitted as an advocate on the state roll if duly qualified citizens of India are permitted to practice law in that country. Therefore, India may also stipulate prerequisites for foreign professionals intending to either practice or render legal services in India. Such prerequisites could be fulfilment of minimum aptitude tests and reciprocal treatment meted out to Indian lawyers by country of their origin.
Interestingly, the Advocates Act embodies the principle of reciprocity as one of its provisions with the rider that where a country specified by the Indian Government prevents the citizens of India from practicing the profession of law and subjects them to unfair discrimination in that country, no subject of such country shall be entitled to practice that profession of law in India.
Bring them in
I favour the entry of foreign law firms in India for the following reasons:
1. It would generate diverse work and employment opportunities for local lawyers as the foreign law firms will not export foreign lawyers into India. They would rather train and hire Indian lawyers for obvious economic reasons and knowledge of local laws;
2. It would give tremendous exposure to local lawyers in the new areas of practice;
3. It would raise the stature of the legal professionals;
4. It would raise the level of remuneration for the legal professionals;
5. It would introduce a high degree of integrity and efficiency in the profession; and
6. It would make lawyers more accountable to their clients.
It is a fact that many foreign firms are thronging with lawyers of Indian origin. They would eventually be relied upon for work related to India legal sector, which in turn shall further benefit us.
In today's technology driven world, one can create physical barriers for entry of individuals. However, those barriers become superficial with foreign lawyers advising clients on Indian matters by means of video conferencing, over telephone and through web mail.
Hemant K Batra is the lead partner of Kaden Boriss Legal LLP.
He frequently writes on his blogs at hemantbatra.wordpress.com/ and www.blog.hemantbatra.org/
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sadanandnaik.wordpress.com/
Entry of foreign firms would help the market and in any case, we cannot afford to violate GATS.
I haven't read the judgment, but does the second sentence follow logically from the first? I think not.
In any case there was very little analysis in this article beyond saying: "GATS says so."
Amarchand, AZB and JSA.
Assume, the market was open - every foreign firm would look to set up an office in India which would mean they would look to hire partners and associates from existing firms. I can speak authoritatively about Amarchand and AZB, not JSA but I can guarantee you that 90% of the partners in Amarchand and AZB would leave for the following reasons:
(1) Unhappiness at their present jobs - the promoters of the firms have beccome so [...] big that there is little space for others to be in the limelight. After a stage, its not about the money, its about the respect; and unless you are [certain partners] or cosying up to them, youre not going to get it. So partners will move en mass and their associates will follow suit.
(2) Intellectual stimulation - if your working at JSA, AZB or Amarchand and have a complex query - who can you look to - Jyoti, Zia, Ajay, Shardul and Cyril. Do they have the time to sit with you? How long will it take to get time with them? In a western firm, drop an e-mail to the partners (and each of these firms has dozens of lawyers of a quality better [...]) and you'll be able to promptly engage in an intellectually stimulating discussion which will result in good client service.
(3) Ability to build something - we have all grown up seeing Shardul, Pallavi and Cyril build a firm with infrastructure matching international standards (which others like Zia and Jyoti replicated)... now wouldnt you like to do the same? Joining a foreign start-up in India would give you that ability.
So, partner would leave, associates follow. But, will they be able to provide the service that a foreign firm (top tier) provides overseas? Most Indian partners are over-rated, have large egos and are technically not very good. Will they be able to survive in a western firm. Have the likes of [...] been able to shine in foreign firms? The answer is NO.
Therefore, if foreign firms were let in today, it would lead to:
(1) Mass exodus from existing firms;
(2) Medium quality Indian operations of foreign firms;
(3) Higher legal costs - the foreign firms will not be cheap, perhaps not London or NYC prices but higher than Indian firms especially as they would have world-class offices etc.; and
(4) After a while, clients will realise that they are getting the service quality of advice as earlier but at increased cost and foreign partners will feel shy of standing should to shoulder with their Indian partners for quality reasons - this will result in partner departures because foreign firms dont tolerate fools.
Net-net, it would be a bad situation for the legal community.
My suggestion would be to let foriegn firms in under a joint venture model - this will ensure that the foreign firms have a stake in improving quality standards, running training programs etc (I believe Clifford Chance and AZB are already doing this) and as a result, whilst the current crop of partners will still not be of international standard and training at least the crop a decade later will be as technically competent as their western counterparts.
Regards,
Anon
PS: I can speak about the difference between Indian and foriegn partners with authority because I have worked with both and there is a "zameen asmaan difference"
To my knowledge, who can or cannot be a part of the legislature was a topic of heated debate as one of the ‘matas’ (an erstwhile elected representative of the Mumbai electorate actually called her that, the only mata I know of is ‘bharat mata’) of a political party is a Foreigner (her claim to fame was that she roped in the night her knight in shining armor who belonged to the Indian royalty, names anyone?) and accordingly a lot of hullabaloo was created around whether a foreigner could or could not become an elected representative of the people. Unfortunately as we all want a fair bride due to our inferiority complex that white is might and hence a little bit of tweaking was done to the rules – I might be wrong on this point but this is what I heard on or gather from the grape wine more than a half decade ago.
Now please look at the fact that so far as law is concerned the moolah is in corporate law or when you become a Senior Counsel (again dominated by people who weren’t a part of the Indian freedom struggle but aligned themselves with the goras. We however glorify them. I have asked many along my way to wisdom and old age that it was good that India became free, they said no we preferred the Raj (marathi manoos don’t rejoice its the British Raj and not Raj Thackeray). I for one, gain inspiration from one of the doyens of Indian business who from humble beginnings set up an empire which shook the entire corporate world that Indians can make it and make it big.
To fine tune my earlier statement on where the moolah lies, I would restate it to say the moolah lies where the client is a gora because you can bill him in USD unlike an Indian client who may, at this time (emphasis supplied), doesn’t have that deep a pocket. The gora as I know him wants to control where his money goes and hence wants to come to India to earn a large piece of the pie. He is not here for striking immediate gold but being a wily fox is in the game for the long term. He is not here looking at inbounds investments into India but when large outbound transactions happen. He wants to come here set up a firm and bill corporate India at rates which would suit him. I would rather have corporate India pay money (when they are able to in the next 5 to 10 years) to law firms born, raised and bred in India.
My contemporaries and opponents would say why I should bother if the gora or his friend (the Iranian refugee) just wants to engage in corporate law in India. My answer to this is simple as the Indian court system takes too long a time it isn’t economically rewarding unless you are a Senior Counsel who if you read who’s who of the Indian judicial system seems to be I dare say a gora.
Moreover, if were are to liberalize the judiciary we should go a step ahead and also open up the executive. It would good to see a foreign (albeit in a sari) Indian nari who is a Prime Minister, a foreign Chief Justice and President of India. Finally we can then say we have all ‘fair and lovely’ (doing amazingly well in the Indian market –read fmcg goods) people at the top (not the BDSM kind).
Jai hind!
I refer to your first point, I am not sure if you are aware that cross profession partnerships are not permitted in India i.e. a lawyer and a chartered accountant are not permitted to form a partnership whereby they provide both auditing as well as legal services. The reason for this is simple it adds a level of protection for the client as well as bring s about checks and measures to instill a good sense of corporate governance.
The fact of the matter is that for donkey's years Chartered accountants as well as company secretaries have been doing documentation work as well conveyances. This practice basically arose because most businesses at the level of the masses are small in nature. While each of such business do not have lawyers they certainly require CA's to file their returns. Given this the charted accountants have usurped a portion of the of the activities that come under the sphere of practicing law.
The Bombay High Court has simply reestablished the role of a lawyer. Let me give you an example lets take a property sale transaction of a flat, when it comes to a tittle search would you give any credence to the tittle certificate of a CPA or CA? If the answer is a No (I certainly would not give credence) then my question to you is how is this CA qualified to draw up the conveyance itself.
Frankly it's high time The Bar Council of India wakes up and kicks a few people in line.
I am in-house counsel for a major company and I regularly am a customer of both - Indian and foreign legal firms.
I can tell you as a customer - there is a whole lot of difference in the talent, generally.
In my experience of a decade or so, for India, a larger % of senior associates/ partners would be a waste of Rs. paid to them... for foreign firms, I have got useless advise, but on an average, the % of senior lawyers in a top foreign firm who come back to me with useless advise is really low.
Since, I also work with Management consultants, I will say the same for Indian v/s foriegn associates -- we have fresh Indian IIM students who come with zero work ex!
Ignorance is bliss but lawyers should at least check up facts before they making sweeping statements.
And legallyindia, please let us see Number 4's unedited comment!
Now a day you can see atleast four to five Indian Law graduates’ as a partner in many international law firms like Clifford Chance, White & Case, Linkletter and many more. Any brilliant lawyer without a legal background wants a good infrastructure to flourish his work, in this case every body get attracted to foreign law firms and India is left without them.
So if we have International law firms in India we can retain the best young legal professional in India, who can contribute in Indian economy. I think more than anything this fight is between independent lawyers who are waiting for big great break and Top tire law firms, who are insecure about existence of foreign law firms. May be Top tire law firms are afraid of competition, so they are happy with being a “Best friends”(Partner) with International Law Firm.
My personal view is it would be Legal revolution as soon as foreign firms would be allowed to practice in India. I would say legislature should come with new law for existence of foreign law firms. The way these firm are allowed to practice in USA or UK by giving there respective Bar exam, same way for foreign lawyers, Bar Counsel of India should come with Bar counsel of India exams for foreign Lawyers ( I think it should be for every Indian Law graduate also, who wants to practice law). The examination pattern can be just like The Bombay Incorporated Law Society’s examination (“Society”), which the society conducts for those who want to qualify as solicitors.
Like Mr. Batra I too strongly favor the entry of foreign law firms in India, it would provide a dynamic prestige to the profession and the legal professionals.
Right now only handful of Lawyers are getting best of the legal training, which would increase drastically though the entry of foreign law firms as the competition among the Law firms would increase and efficiency among the professionals would increase.
Regards.
1. It is impertinent to make a clear classification of what covers under legal practice & legal services.
2. What should be done to those non-advocates (like CA, CS, Engineers & not also forgetting MBAs) who support legal works in different ways eating our pie in addition to their own?
3. The fear of rising legal cost with foreign law firms’ entry will automatically adjust itself according to the economics of the client.
4. Free and fair competition should be allowed. If our law firms are allowed to work in abroad then why should not we allow them to work here.
5. We talk of globalization or WORLD is ONE. Is it really so in legal sense?
6. This will also break the cartel of top tier of law firms. Meaning thereby, free & fair competition among all.
7. The Advocates Act is required to be amended according to the needs felt.
8. If the fear is quality, the law firm should also take CSR, by making provision for training Indian law students from all colleges, not just Nationals Students so that we compete with international standards.
9. And only if we allow them (foreign law firms), then we can also go free there to work meaning no sharing of revenues with law firms abroad.
10. Taking example of Corporates, we can also take use of Int’l LLM Grads in India setting up country specific practice like teams dedicated for UK, US, Aus, East Asia & Middle East.
11. Just like the Corporates are focusing on AFRICA’s untapped resources, we should also focus on setting up business in African countries thereby nurturing us there in the early ages of their development.
12. We are 12 lakhs lawyers competing among ourselves, so lets just use our brains be scattered around the world for a long term goal rather than fighting among ourselves in India. If this so, what is the difference between us and the political parties misleading us.
What appears to be closer to the truth is that even if they do invade, they will be withdrawing in double quick time when they realise that to move the creaking wheels of the justice sytsem is no mean feat and that to attain any success as a lawyer India being a master in the art of adjournment is a core requirement.
Probably that very adjournment culture affords otherwise busy lawyers a little time to give their 2 annas worth to an intellectual discussion on globalisation.
No offence meant and none taken!
Gee Yes!
Solicitor, Supreme Court of New South Wales
Grad. Dip. in Legal Practice (College of Law, New South Wales)
Grad. Dip. in Legal Studies (Uni. of New England, New South Wales)
Grad. Dip. in Legal Practice (Uni. of Western Australia)
LL.B (Hons) (Uni. of London, United Kingdom)
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