Legal process outsourcing (LPO) companies have come under the spotlight after the the recent Balaji Chennai High Court writ petition and the Bombay High Court's decision in the Lawyers Collective v Ashurst case. The cases have created significant uncertainty, argues SDD Global's Sanjay Bhatia (pictured), although for the most part it has been a false alarm for LPOs.

Although the presence of foreign law firms in India and the functioning of Legal Process Off-shoring companies (LPOs) are not connected, concerns about the legality of LPOs operating in India have been raised, and the Chennai writ petition has even named a prominent Gurgaon based legal services outsourcing company, Integreon, as a respondent.  

Does the Mumbai High Court judgment affect the presence of LPOs in India?  No – it does not.  Should legal outsourcing companies be worried about the writ petition filed before the Chennai High Court? No – they should not.  

The Mumbai High Court judgment, although 39 pages in length, does precious little in terms of laying down any law.  The first 26 pages narrate the facts and repeat the contentions of the parties involved.  The judgment then proceeds on the presumption that the three foreign law firms, White & Case, Chadbourne & Parke, and Ashurst Morris Crisp, by opening liaison offices, have engaged in the practice of non litigious matters in India.  The court concludes that the “practice of law” under Section 29 of the Indian Advocates Act, 1961 is “wide enough to cover  . . .  persons practicing in non litigious matters . . .,” such that the practice is subject to regulation under the Act.  

Effectively, after keeping the issue sub-judice for 14 long years, all that the Mumbai High Court has said is something that is not seriously disputed at all – that practicing non litigious matters also falls within the ambit of “practice of law.”  The court failed to determine what “practice” is, and it also failed to articulate how liaison activities of an administrative nature can amount to “practice of law.”  Even if the judgment were to have any impact, under the stare decisis theory recognized under Article 141 of the Indian Constitution, the judgment is binding only in Maharashtra and, at most, it will have only “persuasive” effect in the rest of the country. Had the court attempted to define “practice of law,” it would have, at least obliquely, helped in determining whether the functioning of LPOs amounts to practicing law.

Déjà vu
While the Mumbai High Court decision did little to settle the issue on the meaning of “practice of law,” the new writ petition filed before the Chennai High Court seeks to re-enact the entire drama. This petition has named 30 law firms and one LPO as respondents, alleging that they are illegally practicing law in India.  

This lawsuit should not give Indian LPOs any sleepless nights.  The entire writ petition seems to be directed against those foreign entities allegedly practicing Indian law in India.  In paragraph 12, the petitioner claims “that some of the international law firms has (sic) their office in India and practices (sic) Indian law by calling themselves as LPO (sic).”  Despite the sometimes impenetrable language, the petitioner's main grouse, at least against LPOs, seems to be that foreign law firms, he says, are illegally practicing Indian law in India under the guise of LPOs.  If that is indeed the case – fine.  After a factual inquiry, legal action indeed can be initiated against any such LPOs illegally practicing Indian law.  However, the petitioner is far removed from reality when he claims that LPOs “practice” Indian law.  
Indian legal outsourcing companies generally do not have Indian clients.  Further, as far as I know, based on my ten years of experience in the field, no work done by an Indian LPO pertains to Indian law.  Notwithstanding the Mumbai High Court's failure to define what “practice of law” is, and despite what the Chennai High Court petitioner claims – LPOs do not practice law.  All they do is provide support services that enable the practice of law.  Legal services outsourcing providers work on litigious and non-litigious matters pertaining to a different jurisdiction.  Their employees are akin to paralegals or support staff, who, by their education, training and/or experience, work under the supervision and on instructions of a qualified attorney authorized to practice law is another jurisdiction.    Most of the work outsourced and off-shored to India originates from either the United States or the United Kingdom.   

Over the pond
In the case of United States, the supervising attorney is subject to her/her respective state law governing professional conduct.   No state law prohibits a lawyer from hiring paralegals or support staff.  Some states expressly permit paralegals to perform substantive legal work under supervision.  This includes case planning, development, and management; legal research; interviewing clients; fact gathering and retrieving information; drafting and analysing legal documents; collecting, compiling, and utilizing technical information to make an independent decision and recommendation to the supervising attorney (E.g., Cal. Bus & Prof. Code § 6450(a), and New Mexico Rule 20-102 B).

The crucial aspect here is supervision.  Legal work may be done by non-lawyers, provided it is supervised by those who are authorised to practice law.  In fact, at least six bar association ethics committees in the United States have released opinions discussing the outsourcing and off-shoring of legal work.  A common conclusion reached in all these opinions is that a lawyer in the United States can outsource or offshore legal work to a legal process outsourcing service provider without breaching his ethical obligations, provided the work is supervised.  

Further, the American Bar Association (ABA) Standing Committee on Ethics and Professional Responsibility also rendered its opinion on legal services outsourcing, saying that U.S. lawyers and firms ethically may outsource legal work to domestic and foreign attorneys and paralegals, and describing the legal outsourcing trend as a "salutary one for our globalized economy."  (Formal Opinion 08-451 of 5 August 2008).

The purpose of regulating professional conduct is to protect the interests of the ultimate consumers of legal services.  In the case of legal process outsourcing, the ultimate consumer, be it a litigant or any other legal entity, is located in a jurisdiction outside the purview of the Bar Council of India.  It is not the Bar Council of India’s responsibility to protect such persons.  When the applicable foreign law itself recognizes that outsourcing of legal work does not amount to practice of law, and has checks and balances to protect the interests of the clients on whose behalf work is outsourced, it would be absurdly overreaching for the Bar Council of India to step in and even attempt to regulate the legal off-shoring industry.  The Bar Council of India was set up under the provisions of the Indian Advocates' Act, 1961, a statute that is almost 50 years old.   The Act was passed when there was no internet, no computers, and no fax machines.  The phenomena of legal process off-shoring was never contemplated or foreseen at the time. Even people with active imaginations would have to agree that the Act does not prohibit, nor can it be interpreted to prohibit, a person in India – with the use of technology - from working for a lawyer of a different jurisdiction on non-Indian legal issues.  

Indian intentions
On the policy level too – it is unlikely that the Bar Council of India will put any curbs on Indian LPOs. Its recently elected Chairman, also the Solicitor General - Gopal Subramaniam - made his intentions known in a recent interview with Legally India. While generally expressing reservations over the entry of foreign law firms into India, Mr. Subramaniam is quoted to have said:

[T]he Indian lawyer has to reclaim his business which has gone out. I think we need to first get it back. We need to be on a level playing field.