To me it appears childish to pose the query "until when can entry of foreign lawyers be prevented in India", says Bhasin & Co managing partner and Society of Indian Law Firms (SILF) chairman Lalit Bhasin in response to last week's opinion that the Lawyers Collective judgment is wrong.
This query can only be answered if the basic question "why and whether foreign lawyers should be at all be allowed in India" is answered.
The first query indicates the mind-set of people who have already adopted the name and format of foreign law firms.
Who wants the foreign lawyers in India? The Indian business, the foreign business, the Indian government, the foreign governments, the Indian lawyers or the foreign lawyers?
Business case
Indian business has categorically stated in CII (Confederation of Indian Industry) meetings that as and when inputs are required regarding legal issues in non-Indian jurisdictions, they leave it to their lawyers in India to seek foreign lawyers' help.
There is no evidence that foreign business or multinational companies want foreign law firms in India. Evidence is to the contrary. Multinational Corporations are outsourcing legal work directly to India to avoid the heavy expense of professional fees to US or UK law firms. This possibly can be the only reason (loss of earnings) why there is a clamour for entering India.
Multinational companies have reposed confidence in the Indian legal profession at about one tenth of the cost they would have had to incur in the UK or US.
Powers that be
The Indian government left to itself does not want foreign law firms to open their offices in India. Reference to the General Agreement on Trade in Services (GATS) is misplaced. The Indian Government (Ministry of Commerce) is on record that opening of legal services is not on their agenda.
World Trade Organisation (WTO) and GATS regimes are applicable within the four corners of existing laws. No nation can be compelled to change its laws – that is a sovereign function and international treaties/conventions/protocols are all subject to the laws of member states.
Foreign governments such as those of the United Kingdom and Japan have definitely taken a stand that foreign law firms should be allowed in India. This is mainly because of the negative growth that the legal profession is facing in those countries. The profession exerts pressure on the governments to put pressure on the Indian Government.
It is therefore the legal profession in foreign jurisdictions which wants the Indian legal services sector to be opened up. The legal profession in so-called advanced countries is a product of Industrial Revolution whereas in India it is a product of Independence Revolution – a product of our struggle for independence in which lawyers' role was most illustrious. The names are well-known.
The Indian legal profession is alert to and vigilant about the obnoxious pressures being brought on the Government of India in this regard. These attempts would be resisted.
In any case, Bombay High Court has authoritatively pronounced on these aspects under discussion here and until the judgment is over-ruled or the laws are amended this remains the law of the land.
Right for wrong reasons
One has a right to say that the judgment is wrong – but there have to be cogent reasons.
The reason given that chartered accountants, engineers, company secretaries are doing legal work is begging the question. What these professionals are doing is illegal, being in gross breach of the provisions of the Advocates Act (Section 33) which authorises only advocates to engage in practice of law.
This is one issue which the legal profession has taken up strongly with the Government. We are opposed to multi-disciplinary practice. In any case two wrongs don't make one right.
The entire focus on what will happen to "millions of non-lawyer professionals" is totally misplaced and with great respect I do not understand the rationale or logic of this concern for those who are non-lawyers doing lawyers' work.
Frankly I have no answer to this line of reasoning which does not deal with the basic issue of foreign lawyers' right to practice in India but with the issue of "millions of non-lawyer professionals" doing legal work in violation of law.
This sympathy is totally misplaced. Jurisdiction of the courts (especially the High Court) has been transferred to tribunals and authorities (tax, Company Law Board, and others) where professionals from other disciplines are allowed to appear.
Especially in corporate litigation, the High Court's jurisdiction is virtually stripped and is to vest in the National Company Law Tribunal (NCLT). The say of the Bar in these tribunals is very limited or negligible.
At the same time, there are advocates who have been practicing on the tax side and they suffer restriction by the introduction of mandatory tax audits and the courts have held that Advocates practicing on the tax side cannot audit.
I am not canvassing that advocates should become auditors but at the same time the exclusivity of the advocates and law firms is to be protected too.
We notice big accounting and consulting firms employing in-house counsel to advise their client on legal issues. These firms advice on drafting, conveyance and more and would create a redundancy for small and mid size law firms.
Chartered Accountants and others appear before Arbitral Tribunals and quasi-judicial bodies and argue cases. While qualitatively they may not match the advocacy skills of a good lawyer the fact remains that such issue will snow ball and affect the exclusivity of legal practice of lawyers and this may not augur well for the profession.
The big accounting and consulting firms have been doing this where there is significant foreign accounting or law firms' indirect presence.
Wrong for right reason
In my view the judgment of Bombay High Court is wrong in one respect.
The observation of the Bombay High Court that the Government should decide on its policy regarding foreign lawyers is not a 'direction'. It is only an observation and is per incuriam.
But as a matter of fact and law the High Court is wrong in making this observation.
In any case the Government cannot, despite the observation of the High Court, evolve any policy which is contrary to law. Whether or not there should be an amendment to the law is for our Parliament to decide. Moreover the Bar Council of India (BCI) is a statutory body and the Government has no supervisory role over the BCI.
We will decide what is good for India and Indian legal profession.
We never interfered in the matters of others, why should others for "personal gains" adopt a high-handed approach towards India.
Lalit Bhasin is the managing partner of Bhasin & Company and the chairman of the Society of Indian Law Firms (SILF).
Opinion: Collective's wisdom; Should foreign firms be allowed at all?
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The whole question Mr. Bhasin is who is the "we" you are referring to? The We plain and simple is the small collection of law firm partners who want to maintain their stranglehold over the Indian market and get artificial immunity against competition. Me and many other Indian lawyers also fall in this category of "we" many, many people want the Indian legal market to be opended up - all sounds nice and jingoistic trying to say we will decide, we never interfered outside etc. etc. but the fact of the matter if it is correct if Mr. Bhasin or a small collection of law firms should decide wht is good and bad for 'us'? - anyway, I do hope the day will come in my lifetime when the "we" includes the associates and other non-partner lawyers in this country and not just firms which don't want to face competition claiming they are a mere David against the intruding Goliaths...
Those who oppose foreign law firms should join the CPIM.
Just see the clarity and sensibility while approaching issues by Hemant Batra (An Indian lawyer working at an Int'l law firm) and beating around the bush by SILF's president. Its a shame really.
[...]
[...]
He is representing an industry lobby group which looks after the interesting of its members, many of whom happen to be at the biggest firms that don't want foreign firms in.
And who's to say that foreign firms coming in will be all roses and joy or that they will be able to or will want to pay a lot better than the current paymasters?
ROFLMAO.
His writing is as childish as his sense [...]. May be one the reasons for the foreign firms to come in India is that they [...] they will have a lot of talent available at their disposal in form of the bright young lawyers.
[...]
His interpretation of the international law is mind boggling. I have to give him credit for his audacity to come out with utter non-sense and be so confident about it. [...]
One of the most hurting statements out of this whole piece is that he acknowledges how Indian lawyers do the work for cheap whereas others abroad do it for a lot more money. He wants us to be the queen bee of outsourcing and he merely enjoys that status. What he failed to acknowledge is that this would always make Indian lawyers inferior. I am sorry if he has got even a single clue about legal process outsourcing. Document reviewing in a very complex international deal is not the only work which bright lawyers are going to do forever? Shall we limit our horizons to this when our brains can get out and grab far more? [...] Others have a choice.
He has failed to acknowledge that Indian firms doing work for international lawyers have been charging similar if not less amount of money as other jurisdictions when it comes to proper legal issues. Pick up Indian counsel bills on any international deal where they have been instructed by a foreign client and you will know the reality. The only difference is that although the firm earns the same amount of money, the juniors working in the firms are given out a minute percentage of that earning as in India, in (learned) writer's own words, they come dirt cheap. So who pockets the rest? [...]
The only point where the HC judgment was right was were the writer feels it is incorrect. The government should make rules to get the profession sorted out.
And in the end to satisfy the writers ego, it will be WE who will make the rules in relation to foreign law firm's entry and it will be WE who monitors them. It will be WE who will work and lead their offices and it will be WE who will give them a competition. It is WE who demand growth and it is WE who want liberalisation. It is WE who are sick of the current policies and it is WE who want them changed. If YOU are not in this WE, YOU are in a minority.
I have read both the articles (one by Mr. Batra and Mr. Bhasin) and really found something interesting.
"No one is concerned about the actual delivery of justice to the common man"
Now dont give me that weird look, I dont need to explain or give lecture on how Advocates are ethically bound to the cause delivery of justice.
The Constitution, the Laws of the land, the Judiciary and the Advocates, are there to make the ends of justice meet, for the common man. Not for catering the "elite white" client class.
Nobody is concerned about:
-the pendency of cases in the judiciary,
-the delays, the roadblocks to effective justice,
-fate of litigants who spend a fortune
-national productivity and resources locked up due to litigation
-uncountable adjournments taken up by "US" (The Advocates)
Infact I just heard that Hon'ble CJI has not endorsed the idea of setting up Four Cassation Benches. God knows when I will see a ray of hope.
The question is not "whether to allow entry of foreign lawyers in India, nor is until when can entry of foreign lawyers be prevented in India"
And I fully agree with Mr. Bhasin's stand on asking "why and whether foreign lawyers should be at all be allowed in India".
I again completely agree with him on "The first query indicates the mind-set of people who have already adopted the name and format of foreign law firms."
He has raised very important questions like:
-Who wants the foreign lawyers in India?
-The Indian business?, the foreign business?,
-the Indian government?, the foreign governments?,
-the Indian lawyers? or the foreign lawyers?
The answer to all the above questions is:
-the ones who just want to fill their own pockets, either in hope of getting higher salary or a pay hike, equity partnership, and other reasons. But it all ends with money.
Advocates Act is not a law to decide who will have a greater share of the pie. So please stop grappling for any reason available to amend or interpret the Act for personal gains.
And if at all it needs amendment to reflect the "changing scenario", the question which needs to be asked is :
"FOR WHOSE BENEFITS THE CHANGE SHOULD BE BROUGHT IN?"
-is it the "law firm associate/senior or junior" who sits in an air conditioned classy offices?
- is it the "white law firms" which has deep pockets and will pay in $$s(as salary)?
-is it the top law firms/partners ?
-is it the national law university kids passing out every year?
-or is it the man who is actually affected by the present state of administration of justice?
WHOSE INTERESTS SHOULD BE KEPT IN MIND BEFORE BRINGING IN ANY CHANGE?
If the foreign law firms can, by any means possible, cater to the common man in securing justice in efficient and "cost effective" manner, they are always welcome. And if they are not, its better they cater in their own nations. The Indian common man does not need them.
No landmark chance can be brought in for the vested interests of the few and elite. So dont expect it to come in any near future (unless the foreign firms put up a socialist face).
I might sound socialist in a place which is filled with "law firm culture", but yes, Advocates are ought to be so, because of their professional and ethical requirements.
Bottom line: Dont try to change national laws/policies for "elite few" but for the "greater and common good"
Regards,
Just Curious
I am sure the writer cannot dispute the freedom of speech in this country?
[Sure, but there is no need to be offensive and insulting in comments, in the interests of keeping this debate on topic, relevant and stop it from turning into a shouting match. In any case, we did not make that many edits to comments and the sense is in each case intact. -Kian]
Law is not just for the common man , law is for everybody which includes the elite, poor, middle class and all. Whenever, there is a necessity to amend or make a law for the poor , it is done by the legislature or by the Court through a PIL , so if there is a necessity for an amendment which will benefit the people involved in the corporate society , then why not ? Don't forget they are the one who contribute a lot towards our nation's GDP .
Starting from legal aid to gramin rojgar yojana , all the money spent comes from the tax payer's money and its the associates working in corporate law firms whose TDS is being deducted, not like you advocates ( obviously not all ) who evade tax some way or the other .
With regards to pendency of cases, it has no relation with entry of foreign law firms .... even if the foreign law firms do not come then also the court crisis will persist .
It seems that you have not studied economics and political science properly .... our economy is structured in such a way that even if we dont care about common man's problem and do our business properly and pay tax honestly , then the government under the command of constitution is there to take care of the common man .... u need not be socialist in your approach ... just be social , that is more than enough .
PART 1
This debate is so lively that comments are aplenty. And thankfully, these comments ensure that the views of “some” do not get deemed status of “majority view. There isn’t much sympathy in my head for Mr. Bhasin’s views (yes, no point singing out your heart e.g. reference to Independence era), simply because the few good points were watered down (or just washed away) with other comments (like the “we will decide” bit). The “we” presumably being SILF, the lesser said the better (SILF has no locus to decide, much less use words like “we will decide” as opposed to “we will do our best to protect interests of Indian lawyers”). On an idealistic note … as lawyers who pledge to defend the Constitution, the “WE” is the “people of India” …. Or in this case, “people of India” in general and “lawyers of India” in particular (SILF being a minuscule minority).
“Multinational companies have reposed confidence in the Indian legal profession at about one tenth of the cost they would have had to incur in the UK or US” …. But sir, Indian companies have also been knocking the doors of foreign law firms when the deals are complex OR if they can afford it. With all due respect, India does not have lawyers who can handle all types of deals that are happening today simply because the foreign firms have experience in certain transactions that we lack. Having said that, I would like to clarify that I do not mean that Indian lawyers would be inferior but simply that they lack the experience. That experience can come in many ways, one being working alongside foreign law firms. Also, just because we may offer smaller bills (which again has been doubted in a comment asking us to pick up a bill generated by an Indian firm) does not mean that we always offer same quality … right :P. Anyone who has exposure to foreign and Indian work quality, will nod their heads.
“Reference to the … (GATS) is misplaced… The Indian Government (Ministry of Commerce) is on record that opening of legal services is not on their agenda…. No nation can be compelled to change its laws”. The reference is not by what the Ministry thinks or believes … what the Executive does can be illegal and violative of laws. And sir, LAW IS NOT JUST THE ADVOCATES ACT. Law means the Constitution read with other statutes as well. GATS obligations need to be respected as the Constitution commands that we respect our treaties. If the Advocates Act is inconsistent, then it can be amended …. Surely, it will bend to the Constitution with grace. For Chrissake, ARCHAIC LAWS NEED CHANGE.
References to “Independence Revolution” and “independence in which lawyers' role was most illustrious” looks seriously misplaced and an attempt to act righteous and draw upon the contribution of those great lawyers for the economic cause of SILF. Lawyers of that era did us proud … they gained us independence. But what link do they bear to this debate (now don’t say that the link is that we gained Independence from the Brits and now we are again going to get chained by them if we allow foreign firms an entry). Lawyers of this era have a different role to play …. To act as the times require and move in the direction of more development. If we can use foreign technology and education, surely we can use foreign expertise and experience? As regards protecting our domestic interests, we can implement a strategy that helps us e.g. foreign firms allowed entry in phases, or allowing to act only as JVs with Indian firms. Or maybe a lock-in of revenues of JVs in India, disallowing its disappearance abroad. Surely, the brilliant lawyers of SILF can help us in achieving this? If they don’t want to, others can :D
“These attempts would be resisted … Bombay High Court has authoritatively pronounced chartered accountants, engineers, company secretaries are doing legal work is begging the question. What these professionals are doing is illegal, being in gross breach of the provisions of the Advocates Act”. Again, the resistance commitment sounds fanatical. Bom HC may have ruled, but surely, the rulings of courts are not infallible. And there are laws allowing professionals like CA, CS, etc. to do what they are doing. Even those laws can be amended to allow greater flexibility? And when we don’t have engineer-lawyers, how can we as lawyers do justice to clients who need that combination than by using engineers in conjunction with lawyers? Patents, engineering contracts etc. may need contribution of those trained in higher disciplines of science.
Another pertinent comment made that SILF may note …. “if Indian banks can sustain foreign competition who enter Indian market with huge amount of capital to do business then why not Indian law firms”. BEAT THAT.
The bottom line is this … if foreign law firms are not allowed entry, then foreign jurisdictions can DISALLOW INDIAN LAWYERS FROM PRACTISING THERE. Just like Indian lawyers who qualify the NY Bar or the Qualified Lawyers Transfer Test and practice in NY / London, foreign lawyers also have a claim to have dual qualification and practice in India. Why should the Executive / Judiciary jeopardize the prospect of young Indian lawyers / future lawyers by disallowing foreign lawyers with a blanket-ban (because those jurisdictions can do the same to us)? Why vent against a foreign lawyer from a reciprocating country who wishes to enroll in India? AND … what about the fact that Indian firms hardly offer any training (except learning on the job) while foreign firms offer training, professional skills courses, and a scientific step-by-step growth as opposed to what mostly happens here in India? What about the fact that foreign law firms can help to develop the quality of Indian lawyers by bringing their knowledge and experience here OR by prompting Indian firms to pull up their socks when it comes to doing their job more professionally / offer better salaries and work environment to their recruits? [Off-shore unit of a foreign firm doing LPO work offers better salary and work + work conditions than some SILF members]. Like me, a lot of young lawyers want foreign firms to enter the Indian market. A cap can be put on the no. of foreign lawyers in foreign firms / JVs in India, thus ensuring they operate here with say 20% foreign lawyers and 80% Indian lawyers. That would give rise to opportunities to Indian lawyers. And, when almost every other professional discipline has foreign players (like banking, consulting, accounting/auditing), WHY NOT the same for lawyering?
Why should we have foreign 'anything' in India? Perhaps Mr Bhasin drives an Indian BMW or an Indian Mercedes? Perhaps Mr Bhasin uses and Indian phone, such as a Nokia. Maybe Mr Bhasin buys Indian electronic goods like a Sony television or a Hitatchi air conditioner? Maybe Mr Bhasin shops in Indian stores, like Emporio, or Levis, or Benetton? The point is quite clear, it's about choice and consumer choice, and all these foreign entities manufacturing in India bring employment and generate tax revenue.
What Mr Bhasin fails to point out is this: Rather like KPMG, Deloitte and PWC, who employ Indian accountants, foreign law firms will employ Indian lawyers. How many foreigners have you seen working for KPMG India or Deloitte India Mr Bhasin? I have seen the grand total of - zero.
As pointed out in numerous posts above, Indian subsidiaries of foreign companies in India, foreign law firms in India will pay tax on their earnings. Indian lawyers working for foreign law firms will pay TDS on their salaries.
All liberalisations benefit the economy as a whole, with increase in consumer choice and an increase in tax revenue for the government which can be spent on things like infrastructure, education and healthcare. Unfortunately, monopolists do not care about wider economic and beneficial interests for the vast majority of society. They care only about their own wealth and having a stranglehold on it.
Mr. Bhasin, your arguments are on the wrong side of history, and it will not be long now before the monopoly you represent will be smashed by the government.
i thank legallyindia for giving us this platform to comment our views ... a revolution may be created against family law firms who oppose entry of foreign law firms .
Foreign firms may have come to other countries and improved competition and maybe quality of legal advice but at what cost?
They have steamrollered the local competition, absorbing practices, gutting partners out of the firm who don't fit with their ruthless profit motive under the guise of "streamlining" or "professionalisation".
Nevertheless, the young generation of lawyers in those countries is never daunted and most want to join the firms anyway, seduced essentially by money and the clever marketing of those firms, selling the lifestyle as some sort of global playboy existence.
The reality is that at most foreign firms the associates - although they might get paid and perhaps trained better than currently in India - they are treated as a disposable resource too.
The English or NY legal market is flawed in many different ways, as is the Indian. Nowhere is perfect and the grass is always greener.
Come foreign firms, the Indian law firm industry will lose its charm, unique culture and individuality, which means both positives and negatives.
Protectionism is not a bad policy for a country to allow local talent to flourish and develop its unique culture, brought about through internal competitive urges.
In the last few years that is exactly what India has been doing and things are changing already.
In short, if you had the choice, would you not rather work in a marketplace that had grown organically, rather than been brought about by aggressive reform if the end result is the same?
Would you not rather wait a few years and let things take their course?
Do you really want to work in a Walmart/McDonalds-style industry?
Ps: @21 is not correct, I know lots of foreigners working in accountancy firms here (although the majority are local).
Why should the Government care?? They have bigger and in all honesty more important fish to fry. Pendency of cases? Reform of laws? Judicial corruption? Court infrastructure?
The list goes on.
Don't you think foreign firms are a relatively minor and unimportant point compared to all those?
Protectionism kills competition, especially when it is killing opportunities for young Indian lawyers to get a decent training and a foothold in life, whatever they may go on to do in the future. Whether they make partner, start their own law firm, or go into business, while associates in foreign law firms may be expendable, they are equipped with skills that allow them to flourish in flexible labour markets. Our own law firms, with no-competition, treat their juniors no better than serfs and teach them nothing wider than the benefits of psycophancy and 'loyalty' to the promoter family.
Your recommendation of organic growth fails to take into account the costs of delay and the enormous costs to the economy that it brings. If liberalisation were more aggressive, the economy would be growing at double the rate, with all the benefits that it would bring.
Imagine the whole of Europe or North America with just ten law firms doing all the corporate work - the backlog of deals would severely hamper GDP growth and the prosperity of society in general.
No system is perfect, but liberalization, rather like democracy, or capitalism, is the least worst option. I'd rather work for Walmart or McDonalds, than work for feudal godfathers. Open the gates, and open the gates now! The monopolists have had almost twenty years to adapt, just like any other industry. Their failure to do so is ultimately their fault.
On the other hand, family firms like Bhasin, Dua, and other "silf" firms took so many years to make their reputation . Amarchand was started in 1917 and today they are no.1 , whereas, AZB started in 2000 and now its No. 2 .
The reason being , the first category firms are ready for the competition and some of them also have made tie-ups with foreign law firms , whereas, the second category firms are afraid of competitions and earn money without sharing.
As for AMSS, it may have been started in 1917, but all this #1, #2 stuff has to be reckoned and viewed in today's context. The growth spawned by the spurt in corporate work (which is what has driven the growth of all the law firms in question) is essentially a post-1995 phenomenon and viewed in that context, AZB is not really much of a David to the AMSS Goliath :-)
Thank you for rectifying me with that point but please dont digress from the core issue .
And one more thing, ranking of law firms should definitely be taken into consideration .... every nation rank their law firms accordingly and if I m not wrong many international organisations give awards to these law firms which few of our elite law firms also boast off.
Ranking shows where u are and makes the clients aware about your potential and not just reputation which somebody in your family have created and you enjoy for the rest of your life.
Anyway, the way things are going foreign law firms won't enter in our lifetime. The previous law minister (Bharadwaj) was quoted on a number of occasions as saying that he was in favour of foreign law firms. The [guy] presently heading the Ministry (Moily) is known to be opposed to foreign law firms. Had Bharadwaj still been around, things may have been different.
Ms Sindhu Yadav,
Subject Matter Expert,
Choir de Law Pvt. Ltd., Delhi
A big reason for the kind of responses that have been posted to this message is the feeling that most lawyers have of being "left out" by such firms. It is no secret that most of these firms recruit on a policy which can only be called discriminatory as it is restricted only t the 5 year law schools. this in itself is antagonizing as it suggests that people graduating from other universities are not good enough from these firms. Interestingly enough the fact that the best brains in the country never went to a 5 year programme but the old established law colleges eludes them all collectively. Recruitment to more senior positions are also made on the basis of either closely guarded networking or from other firms. The fact that many good brains are only CV's on the systems of such firms is a something that has to be realized and acted upon by these Firms.
Which brings one to the issue of whether or not foreign firms should be allowed? interestingly i have'nt heard or met too many individual practitioners who are wary of the entry of the foreign firms. The reason seems understandable. The people who prefer to give their business to individual lawyers or "chambers" are not the ones who would be heading to engage a foreign law firm if and when they come. God knows they cannot afford to engage the Indian firms!!! So it is the business of the Indian Firms which is in direct danger. But can the threat of competition be the sole reason that most Indian firms would not like their foreign counterparts. As easy it would be to say yes, i believe the answer is no. the biggest threat to most Indian Firms would be in the field of treatment of Employees. Most firms as on date have working environments which can be termed as exploitative. While the firms are making immense profits, passing benefits to associates is something that most shrink from..and here i do not simply mean money. Most firms look down upon associates availing leave, while never thinking twice about overworking them. Even though most firms have fancy leave policies on paper, any associate actually taking leave ( though without being dishonest to his/her work) is evaluated negatively. Working hours no matter how killing are justified without looking into a human beings needs. The fact that the Legal Profession requires one to overuse one's brain is a fact that again misses most.
So in all this it is almost inevitable that a foreign law firm will gain...after all foreign companies, foreign firms in the CA profession have shown us that. Not to say that foreign firms are a miracle cure and will have no problems, but they can surely give the Indian Firms a run for their money in one department- Human Rights.
By the same (il) logic , we should not import any goods into India and continue to remain isolated, because we can produce do everything as well.
Further, how can a few "Indian firms" deem to represent and speak on behalf of the entire legal fraternity?
Ask the young lawyers who are working in Indian law firms and various companies that frequently use foreign law firms- ultimately should not the market forces decide?
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