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Will the entry of foreign law firms benefit young lawyers? Rational realities, expectations and opportunities

Liberalisation: Artist's impression (Image: Pieter Breugel's Schlaraffenland)
Liberalisation: Artist's impression (Image: Pieter Breugel's Schlaraffenland)

Endless jobs? Sacks of money for all? Better working conditions for everyone? Young lawyer Dhruv Balai Paul ponders the implications of the possible entry of foreign law firms to India.

The liberalisation debate has, once again, taken centre stage. It might be becoming old but this is arguably the first time that all key stakeholders appear to be on the same page (albeit with some differences).

As we find ourselves on the cusp of a ‘phased reforms and liberalisation process’, the public discourse is primarily focused on preparing Indian law firms for the perceived challenges that lie ahead.

Structural reforms are definitely necessary, and there is some merit in regulating how and when foreign law firms enter the Indian market.

There is, however, not much of a public debate on the benefits and challenges that liberalisation might present to the sub-eight-year-PQE (post qualification experience) purely Indian-qualified non-contentious private practice lawyer, let alone what it could mean for the scores of youngsters graduating from a burgeoning number of national law schools, private law schools and traditional universities.

This article raises questions that directly relate to us.

Reality: Training gap

Despite positive developments in the legal education/training arena, especially in the last two decades, there is still a significant gap in the ‘job-readiness’ of newly qualified lawyers. A system that is predominantly focused on cramming theory, without necessarily providing students an opportunity to appreciate practical implications and applications of their learning, has resulted in a majority of lawyers not being fit-for-purpose upon graduation.

At present, this gap is half-heartedly plugged by certain private education providers, ad hoc training by law firms in silos, and an informal dis-jointed internship culture.

For instance, despite theoretically knowing the function of memorandum and articles of association, most of us don’t review and analyze a sample set as part of our course work.

Similarly, not many of us would have been trained on nuances of drafting resolutions. Most of us are not even aware of the basic objectives, methods, processes, and expected outcomes of a due diligence review till we are staffed on our first transaction.

Notwithstanding this gap in training, these are the sort of issues that we are usually required to deal with immediately upon joining the corporate team of a law firm. This list could go on, including to practice agnostic examples around drafting emails and structure of letters of advice, but you already know this!

The education system has not, for the most part, kept abreast with developments in the practice of law.

Learning on the job is the norm. As one stumbles from year 1 to year 2, we pick up on practices and sometimes just do things because that’s how we did it last time.

The lucky amongst us will find knowledgeable and helpful seniors, and the more industrious amongst us invest in learning the underlying principles and reasoning. However, this is certainly not an optimal or sustainable model in the long run.

All of this is juxtaposed against the systematic and compulsory training process that aims to equip overseas graduates with an understanding of useful day one outcomes and competencies that are expected of newly qualified lawyers. Then there is the training contract process in English firms. This is supplemented by an evolved continual professional training and development programme that reenforces the learning of not just graduates but also lawyers of varied levels of experience.

With this background, at the time when a recruitment decision needs to be made, on the whole are we equipped to compete with our counterparts?

Will the perceived gap in formative training impede the prospects of younger lawyers or the career progression aspirations of mid-level lawyers?

In my view, the short answer is that we are clearly disadvantaged. Some of us will succeed despite the odds, but the same cannot be said about length and breadth of our supply chain.

Expectations high, actual benefits potentially more limited

Despite divergent views in certain quarters, there is a consensus that our generation of lawyers will benefit from liberalisation. Liberalisation is expected to improve employment opportunities, increase salaries and introduce international best practices.

It may perhaps also expose us to a broader range of transactions beyond a strictly Indian context and possibly increase mobility across jurisdictions. Even if the benefits are not far reaching, they will certainly not be detrimental.

The extent to which these expectations will be met will depend on how a number of factors eventually pan out. If I were to hazard a guess (in a nutshell since this is not the focus of this article), the benefits for purely Indian qualified lawyers will be somewhat narrow and shallow if firms are only allowed to practice their ‘home’ law.

If foreign law firms aim to develop their Indian offices as south Asian hubs (and are eventually allowed to practice some aspect of Indian law), then the benefits will be relatively wider and deeper. Bearing in mind the increasing supply pipeline of young lawyers, the impact can be optimised if foreign law firms additionally (but not only) shift a bulk of their global process driven work to their Indian offices.

This will require a fine balancing act, as we would loathe being relegated into a predominantly back-office model on account of the ‘English+Cost’ advantage.

Opportunities: Asian legal power house

All is certainly not lost. If the Indian legal services sector aims to become an Asian (if not global) power house, with or without the entry of foreign law firms, then the current crop of young lawyers and the law students should form the bedrock of the growth cycle.

Since one of the key aspects of the “phased liberalisation process” is to “reform the environment for domestic firms”, I would like to conclude by arguing that this should be dovetailed with reforming the education and training system.

The process of identifying and then implementing structural reforms in the education system is by no means easy.

Just consider the varied cross-section of educational institutions, abilities of students, financial and other practical limitations.

The fact that an overwhelming majority of graduates are absorbed in the contentious side adds its own dimensions.

But equally change is not unattainable. This is the need of the hour, and the liberalisation discourse gives us a good opportunity to focus on it.

Bold reforms at this stage will hold us in good stead irrespective of liberalisation.

Dhruv Balai Paul graduated from ILS Law College, University of Pune in 2008 (so forgive his ignorance about newer practices and better institutions!). He has seven years of varied advisory and transactional work experience gained at Trilegal, New Delhi (including a long-term secondment to BG Group) and Clyde & Co, Dubai. He can be reached at .

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