Unleashing India lies partly in the hands of its lawyers...Unleashing India lies partly in the hands of its lawyers...

India makes it really difficult to maintain perspective sometimes when gung-ho headlines, government statements and statistics only ever tell part of its story. Yes, at give-or-take around 7%, India’s GDP is growing faster than most other countries and this is predicted to continue increasing next year. But is this enough? And, importantly, are India’s lawyers ready to keep pace?

At the end of the day, there are few who’ll bet against India in the long term: its demographic capital remains huge and the ceiling to India’s potential economic and global ambitions should and does remain sky high. Yet it is exactly that long-unfulfilled potential and its demographics that also create India’s greatest challenges, both from a business and a human perspective.

Average education levels, qualifications and skills remain woefully low with 10 to 15 million young Indians entering the workforce every year, while only 155,000 and 231,000 jobs were created in 2015 and 2016 respectively, according to government metrics (both record lows as against 2009, when 1 million new jobs were created). The obvious question therefore is: what will the masses of potentially unemployable youth do? Government initiatives, such as Prime Minister Narendra Modi’s Skill India initiative, are a step in the right direction, alongside similar government initiatives that at least sound the right notes.

And foreign direct investment (FDI) will, no doubt, also form part of the answer, as global companies are keen to slice pieces off the fast-growing pie of Indian consumers. But while FDI has hit a record $60.1bn in 2016-17, according to government figures, trickle-down economics won’t work miracles and can seem like a bitter joke when wealth inequality in India remains one of the highest globally (the news that a record 70 out of India’s 101 billionaires in 2017 were self-made rather than having inherited their wealth, according to Forbes, showcases the opportunities available, although critically those remain constrained mostly to the elites).

Furthermore, beyond a few homegrown exceptions and niche areas, India has not yet really given many major global industries, such as high-tech manufacturing or internet-related businesses, much to worry about in terms of competition, with India’s brain drain diaspora having instead enriched Silicon Valley and other countries more than India itself. That said, some in that diaspora – also amongst lawyers – are returning home and innovation, often with a uniquely Indian twist, is taking place here and a handful of Indian companies are beginning to make global impacts.

And while some industries, such as Indian healthcare, are flourishing, largely off the back of innovations in low-cost production and a boom in generics, others, such as India’s global technology outsourcing miracle, have begun showing cracks in their shining armour in the last few years.

The spectre and reality of corruption, of course, remains sand in the gears of the India machine, and largely ineffective government policy, such as the so-called surprise ‘demonetisation’ of high value notes, despite proving surprisingly popular, had temporarily undone economic gains and might have few long-term effects other than a possible widening of the tax net. And even much-lauded and awaited initiatives such as India’s goods and services tax (GST), widely predicted to result in a bump to GDP growth figures due to simplifying the inter-state tax regimes, are unlikely to be smooth sailing in practice or do much to curtail the near-dictatorial powers of tax inspectors to harass businesses.

For better and for worse, investors and businesses often draw some comfort from the fact that India remains a huge ship, where course corrections will take years, if not decades. And while it is hard to foresee an iceberg big enough to sink India, the ride is likely to be a bumpy one.

In such choppy waters, the role that lawyers will play in India’s future and the way the legal profession evolves and deals with the huge challenges it faces, will be pivotal.

Advocating for change

It is fair to say that lawyers have been at the forefront and centre of India’s economic boom since economic liberalisation in the 90s, often being the class of professionals who could best help domestic entrepreneurs and foreign investors navigate the complex Indian regulatory and business minefields.

But beyond the valuable role played, services rendered and fees billed, India’s legal industry has been fortunate on other fronts for the last two decades or so.

Corporate law firms have been spared most attention and restrictions by its regulator, the Bar Council of India (BCI). While Indian law firms have had to grow while nominally shackled in the way they do business, most have managed dealing with restrictions that exist primarily in the black letter of the law rather well.

For example, the continuing confusion about the most tax-efficient and least risky business structures that large law firm partnerships should adopt, has not stood in the way of most firms’ growth, with partnerships having found creative ways to make things work. And although restrictions still exist on paper about advocates marketing themselves, with some firms still preferring not even to have a website, many younger firms (and a few older ones with sufficient strategic nous and ambition) have managed to completely displace the more conservative old guard of the profession, by being more competitive, client-driven and aggressive on all fronts. Indeed, in the last decade, India’s legal industry has prospered, grown and innovated on its home turf, and the legal ecosystem is now mature enough to where things must fundamentally change in order to keep up with India’s ambitions.

While massive legal talent exists at the top of legal market, both domestically and abroad as evidenced by the contributions to this book, this by itself will not be enough to allow India to take the next leaps forward that it must.

India’s second-tier cities, for instance, remain massively under-served by quality legal advisers, and even in the economic power centres there is significant room for growth.

A toothless regulator that barely understands corporate law firms may have been beneficial to helping the profession grow freely and rapidly, but in the long term it is neither in the interests of lawyers, clients nor the country.

For instance, there is practically still no realistic recourse for clients who receive bad service or advice from their lawyers: the regulator has neither interest nor capacity to deal with complaints, litigation is an ineffective remedy for wronged clients for a variety of reasons, and professional liability insurance is still basically a formality that is occasionally asked about by clients but, in practice, never invoked.

The reform plans mooted by the Law Commission therefore comprised of cautious steps in the right direction. The draft Advocates Act amendments proposed formally recognising law firms and beefing up disciplinary panels by including non-lawyer professionals as well non-elected lawyers in the process (on its face, especially the latter would have been a good move, since bar council elections are little more than exercises in populism, which usually put in power bar council members who want to do little to upset their electorate).

The Law Commission also proposed outlawing advocates going on strikes (in any case, this occupies a legal grey-to-black area after the Supreme Court of India basically ruled lawyers’ strikes unlawful in all but the most exceptional of circumstances).

Ironically, however, the Law Commission’s unborn baby was thrown out with the bathwater, after the BCI and state bar councils called for mass strikes earlier this year. The government eventually made the minor concession to the BCI that it would not pass the amendments without discussing them with advocates and bar councils first.

For now, any reform is certainly on hold but that is not to say that the government has lost the battle and won’t yet institute reforms of the legal profession, though it could mean that the government has lost some appetite to take on the legal profession. If so, it wouldn’t be the first regime to have faltered and decided that there is little to gain in the short term by regulating lawyers. But in light of the current government’s legislative strength, it would be a major missed opportunity and a huge mistake.

If India is to be unleashed, it will need a world-class legal profession and legal system but those changes will not come from within. For true change to happen, the government must take the initiative and be bolder and more forward-looking than what is currently on the table.

The long game

No discussion of the inadequacies of India’s legal system is complete without raising the growing mountain of pending cases and the glacial speed of the justice system, which have been clichés for far too long now, sadly.

Unfortunately, no government has done much on that front other than making empty promises, which now occur primarily by rote in all election manifestos. But fixing the backlogs and judicial system is not going to happen overnight; it will require huge investment and taking a very long view, rather than the single-minded obsession governments have had on making judicial appointments more transparent (important as that may be, in isolation).

Much like India’s demographic time bomb of unskilled labour hitting the market, making the Indian legal profession future-proof requires taking a holistic look at fixing Indian legal education, which has continued sliding deeper into a morass where many law degrees are not even worth the paper they are issued on. With states falling over each other to create (and then abandon) national law schools, a few state-funded and private institutions have cropped up to give the mistaken illusion that overall, the landscape is improving.

The unfortunate reality is that out of the more than 1,300 law colleges that are open for business in India, only a small handful provide the level of education that India requires, with tens of thousands of law students graduating every year. The knock-on effects of that are many. For one, the vast majority of lawyers practising in the courts, especially the ones outside the big cities, act more as fixers than advocates with their talents often primarily extending to seeking repeated adjournments. Second, and even more worryingly, this means that the talent pool of educated jurists to enter the judiciary remains tiny, with many judges lacking the understanding required to fix the legal system from the ground-up. I believe that cadres of well-trained, confident and efficient judges would go a long way to raising the standards at the bar by standing up to bad lawyers, curtailing unnecessary adjournments, and generally improving the quality of arguments made and justice that is delivered, which reduces the likelihood of pointless appeals.

But in order to entice India’s brightest and best legal talent to opt for a career at the bench, it needs to be a much more attractive proposition; right now, it is frankly not lucrative enough and the money on offer is insufficient to make corruption as a judge an entirely irrational proposition.

The government could fairly easily fix at least that part of it by significantly increasing judges’ remuneration; the greater challenge will lie in ensuring that the next generations of Indian law graduates as a whole are adequately trained and prepared for the realities of the economic and social environment.

The only way to do that is to reform regulation of legal education from the ground up. For too long the regulators have not just been asleep at the wheel, but in some cases even jailed outright for corruption in overseeing law colleges, which has created the crisis we find ourselves in.

Again, the fight to take away regulation of law colleges from the bar councils would not be easy (and it is one that the previous government had also failed at after lawyers’ strikes), but whichever way you look at it, I don’t think there is any way around it: we need to start planning and pushing for a better future for the profession now.

India will need many more good lawyers who can and will get involved in assisting companies, citizens, foreigners, the government, bureaucrats and the courts to unleash India’s unrealised potential and its many dividends.

This editorial is part of India Unleashed, a print and online publication by Global Legal Media and Legally India, providing country-by-country insights and sector-specific analysis and from leading law firms around the world. We will be publishing more articles from India Unleashed shortly.

This article is brought to you by India Unleashed

India Unleashed is a print and online publication by Global Legal Media and Legally India, providing country-by-country insights and sector-specific analysis from leading law firms and writers around the world.

Click here to read more on the India Unleashed microsite with all the articles from the print magazine, or view the full PDF below.

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Like +1 Object -0 kianganz 28 Jun 17, 11:35
Sorry, comments had been disabled on this story by accident... They are now enabled again.
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Like +0 Object -0 Dhakkan 28 Jun 17, 14:49
Good Work Kian!
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