Delhi bar council member and Luthra & Luthra partner Vijay Sondhi responded with a letter of his own, slamming Tiku’s warning as illegal, and one Delhi law firm mothballed its LLP firm to avoid the controversy.
Despite chartered accountants being allowed to operate as LLPs since July, the Bar Council of India (BCI) has not made any apparent progress in its decision on LLPs…
- Click here to read Legally India’s full story in today’s Mint for the inside scoop on legal LLPs, under LI’s content partnership with the business daily.
- Legally India exclusive: Download Sondhi’s response to Tiku’s letter here.
Comments
Legal Dodo
None of you guys above have stated your respective stand disclosing your identities. whys is that ?
LLP allows a limited liability of the partners. That would mean that in case of misconduct by the LLP or the firm the lawyer/ lawyers can escape total liability stating that well the case was handled by the LLP and not the individual lawyers so because of the LLP formation, you cannot hold a lawyer liable for any kind of misconduct. So a LLP can possibly break every single law governing and regulating lawyers and the lawyers behind it can get away with it.
For example - advertising. an LLP can advertise blatantly and when questioned by the Bar council, the LLP can say, well we are not covered by your rules. (please enlighten me here, as to which provision governs misconduct by a "non-human" juristic person) and the erring lawyer/s can simply get away by stating that we are covered under the LLP act with limited liability and in any case we as lawyer/s are distinct entity from the LLP so we cannot be held liable for the conduct of the LLP.
Another smart thing that is being done under the LLP umbrella is that non-indian nationals are becoming partners under the LLP.
Now, please correct me here, is it proper for an American to practice law in India when there is a specific bar in the Advocate Act ? When this is /would be questioned. Apt would come the reply from the LLP - Bar Council does not have jurisdiction. Apt would come the reply from the American lawyer - You have no jurisdiction over me and secondly I am an individual, cannot be held responsible for the work done by the LLP a separate, distinct legal entity. Apt would come a reply from the Indian lawyer- you can't hold me responsible for misconduct of somebody else - in the present case the LLP.
So maybe (though i dont think so) the idea of foreign nationals not being allowed to practice law in India is wrong. But it is the law today.
From what I understand, as long as the law is there howsoever wrong and the same is either not challenged / set aside, the same is the law of the land. If anybody does not like it, challenge it and get it voided / nullified. Don't we do that all the time as lawyers ?
So before blindly criticizing the Bar council, at the very least understand why the Bar Council is opposing it.
Another thing - How many Indian law firms have more that 20 equity partners ? Most do lip service of a calling a lawyer as a partner while still being a sole proprietorship. Partners in a Sole Proprietorship?
If there are going to be less that 20 equity partners, whats wrong with registration under the Partnership Act ?
Saurabh
[quote name="saurabh"]I disagree with the views above.
None of you guys above have stated your respective stand disclosing your identities. whys is that ?
Saurabh[/quote]
It matters. because the least it does is let the readers know whether your comment is from a person who has a neutral / ringside view or do you have a conflict of interest. surely, readers should know that.
Saurabh
[quote name="a"]How does it matter who says what in this debate? What is said is relevant - not who says it.
[quote name="saurabh"]I disagree with the views above.
None of you guys above have stated your respective stand disclosing your identities. whys is that ?
Saurabh[/quote][/quote]
Your line of reasoning would surely also apply in almost every other field of industry and therefore by your logic, 'Limited' companies should also cease to exist. In fact the introduction of the LLP is of great service to clients, since they are now aware that they are dealing with an enterprise where liability is limited. Needless to say, thereafter it is upto the client to determine if they are comfortable working with a firm that only offers limited liability. In fact most law firms, or at least most law firms with any significant insurance protection, already contractually limit their liability. So permitting LLPs (and regulating them) will only serve in the client's benefit.
Your line of reasoning would surely also apply in almost every other field of industry and therefore by your logic, 'Limited' companies should also cease to exist. In fact the introduction of the LLP is of great service to clients, since they are now aware that they are dealing with an enterprise where liability is limited. Needless to say, thereafter it is upto the client to determine if they are comfortable working with a firm that only offers limited liability. In fact most law firms, or at least most law firms with any significant insurance protection, already contractually limit their liability. So permitting LLPs (and regulating them) will only serve in the client's benefit.[/quote]
Hey Anon,
Again, as I have stated in my earlier posts. A lawyer has to remain liable for the service rendered. and secondly there has to be check on who is actually practicing law in India.
Now, the concept of limited liability that you are talking about is contractual. The liability that I am talking about is statutory. surely contractual disclaimer cannot take away statutory duties. In case of LLPs it is unclear who is statutorily liable. That is all. Dont read more than this in my comment. If you look at the comments before my comment, they are critical of the Bar Council, without stating any reason.
Again for the sake of clarification, I am stating that I am talking about the statutory liability of the lawyer. not contractual.
Look at it another way, when I limit my liability under an agreement, it protects action against me arising out of the contract. Right ? BUT, it does not prevent action under law of torts. That is why we have the consumer courts.
What happens when a lawyer working with a client under a strong limited liability agreement screws up ? the limited liability clause takes care of action arising out of a contract. But what happens to normal care and diligence that is expected from a lawyer? Can the client take the lawyer to a Consumer court ? No. Why ? because in case of lawyers its the Bar Council. Can the client take the lawyer to the Bar council ? No. Why? because there is no lawyer. its an LLP That sir, is my point.
So under the LLP, a lawyer can literally take the client for a good ride. Good for lawyers, but grossly unfair.
However I do agree, with your last point. LLPs for lawyer can function so long as there is a mechanism to regulate them.
regards
Saurabh
More to the point, tell me of any single incident of the principals, partners or associates of a law firm - even before the LLP came in - being punished for misconduct.
Heck, these guys happily represent two opposing sides and say there is no conflict of interest. Rather, that concept is alien to them.
And you want them to own up to 'misconduct'.
More to the point, tell me of any single incident of the principals, partners or associates of a law firm - even before the LLP came in - being punished for misconduct.
Heck, these guys happily represent two opposing sides and say there is no conflict of interest. Rather, that concept is alien to them.
And you want them to own up to 'misconduct'.[/quote]
Dear "one in a million"
If you click on my name, I think it would take you to a not-so-great blog that I write once in a while. It would disclose my identity. little clicking required. So for records. Saurabh is my real name and I practice here in Delhi.
My only concern was, and is, that the person writing should disclose their identities so that one would know who they are. Its slightly crazy to me, for someone to criticize the bar and do so anonymously.
Next. It appears that you are wholly unaware of the disciplinary committee and its functioning. Go to the Bar council - Delhi office, or the Bar council India office and you will see that the complaints made against lawyers is indeed taken very very seriously. take my word on it. see for yourself. Move and RTI, do whatever. But just because the names and actions are not publicized, it does not mean that action is not taken.
My comment was not about conflict of interest. It was about individuals not allowed to practice law in India, do so through the LLP route. That I believe is the concern of the Bar council. I know of some US Firms. So this LLP route allows my American friend to be a partner here in an Indian law firm and show this to keen clients in US and India - look we are so smart and good that we have an American lawyer as partner. Give us work and money.
Now, as long as the American is not allowed to practice law in India to use the LLP route, in my opinion is wrong and illegal. And I wholeheartedly support the Bar council to check such misadventure.
Saurabh
Law firms took to LLP primarily to increase the number of people who could become partners without indulging in subterfuge or legal skullduggery. Also, it helped to limit one's liability in the event they got sued.
Practising of law, by Indians or foreigners, has nothing to do with the LLP. That is a separate issue - the BCI regulates coz' it has been given that role under the Advocates Act 1961.
The UK came up with LLP, but solicitors are still regulated by the SRA, the regulatory body overseeing the profession.
And for BCI taking complaints seriously. I nearly choked over this...tell me have you heard of RK Anand and his sordid act of bribing a prosecution witness. All captured on camera. You can't get more corrupt and sleazy than that. Made a complete mockery of the rule of law and put the profession in utter ridicule.
And what punishment did he get?
R.K. Anand got away for all purposes, scot free. but I am not so sure it was the Bar council that was behind him. I think (if I remember correctly, it was a suo moto action by the high court, based on the sting by NDTV, though I admit I dont remember it off hand properly)
Another thing that I do admit to, is that not every case that goes to the bar council perhaps gets the ideal treatment.
but then neither does every single case in courts gets an Ideal treatment. That does not mean we lose faith in the entire system, does it ? I say that the disciplinary committee does take its role properly because I have seen the functioning.
the LLP route is being wrongly used. there are firms that have non indian nationals as partners.
There are also partnerships that are actively advertising and providing legal services to "consumers". When I confronted one such company that what they are doing is illegal. No reply came. But soon enough, the website had a disclaimer that they are not a law firm, but help people with legal issues. A slight legal background research revealed that the "non-law-firm" advertises, is headed by advocates, funded by a VC, and further hires young recruits from law school.
but of course it has a disclaimer. not to mention that law permits only lawyers to practice law. This sweet little "non-law-firm" does everything possible because of the disclaimer.
so here's my grudge.
1. people not entitled to practice law in India are practicing law by misusing /abusing the LLP route
2. rules/ regulations (however archaic and wrong, they are rules till repealed/ amended) are being evaded by a breed of self proclaimed smart-alec lawyers by using the LLP route.
and here's my short answer to you and other anonymous commentators
1. As long as the lawyers behind the LLP route do not abuse the law to bypass the liability or to bypass the rules governing advocates, Me or people like me have no issues.
2. My conduct is governed by a certain set of rules. These rules are the same for everyone. If you are not happy with them, either challenge the rules and get them changed or follow them. please do not bypass the rules and state that the rules are archaic.
3. This is India. not the UK or the US or any other jurisdiction. You are not happy here, then practice law where you will be happy. But as long as you are here, follow the rule book here.
4. What you are calling a separate issue sir, is the same issue for me. The bar council has some really credible people running it. It is an elected body. It knows what it is doing. You may feel differently about it. And we can agree to disagree on it.
All in good fun and games !!
Saurabh
PS: This is (hopefully) my last comment here. I think my message is getting lost in comment, reply, counter replies etc.
PPS: note to moderators: maybe you (@legallyindia) can have a "debate corner" something like what nytimes or economist have. so that one can air their opinions and let the readers form their own opinions on various legal issues.