August 01, 2021
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Who Needs Foreign Law Firms Here?

Lalit Bhasin on how it is not the fear of foreign firms but the Government's failure to bar them despite existing law that has stirred up a controversy.

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Who Needs Foreign Law Firms Here?

It is not the fear of the foreign firm, insists Lalit Bhasin, President of the Society of Indian Law Firms (SILF), but the Government’s failure to bar them despite the laid down Law, that is at the heart of the controversy. The Government’s belief that ‘transactional work’ and work like drafting etc., not directly related to the court, do not amount to ‘practice of law’ was corrected by the Supreme Court of India earlier this month, he points out with obvious satisfaction. Excerpts from the interview :

A survey commissioned by A & O seems to suggest that clients, lawyers and firms here are in favour of liberalisation?

In the SILF General Body Meeting on 7th July, 2012, representatives of almost 60 top law firms were asked whether they were contacted by the surveyor. All of them vehemently denied it. The findings do not, therefore, inspire any confidence.

But why are you opposed to the current practice of flying-in-and-flying-out by foreign lawyers?

SILF has never been opposed to it. SILF has gone to the extent of saying that they could be permitted to be either a part of any Arbitral Tribunal in India or allowed to represent a client in arbitration proceedings in India along with Indian lawyers.

Wasn’t the practice upheld by the Madras High Court, which felt that allowing foreign lawyers was required to fulfil the Government’s aim of making India an arbitration hub?

The law never made any distinction between ‘litigation’ and ‘non litigation’. Practice of law by foreign lawyers in any form was illegal and remains so. It was the Government, which was confused and the Bar Council of India, which failed to enforce it. The fat is now in the fire because the Supreme Court has clarified the position.

National interest demands that Indian legal profession be encouraged and supported by the Government. The experience in the case of accountancy firms is shattering. The Big Four have actually cartelised, monopolised accountancy and audit practice in India. One hardly hears of any good accountancy firm with local roots. The Indian legal profession will also meet the same fate if the caution indicated by the Supreme Court is not exercised.

With a growing number of Indian firms acquiring companies and assets abroad, isn’t it helpful to have the expertise of foreign lawyers in India?

With the Indian acquisitions overseas on the increase, the services of foreign law firms would definitely be required, but for this purpose they need not set up their law practice in India. Depending on their (foreign law firms) expertise and specialisation, Indian law firms would contact their foreign counterparts with regard to matters pertaining to acquiring companies and assets abroad. Similarly, foreign law firms contact their Indian law firms for inputs required with regard to Indian law. This has been the traditional way of law practice for more than five decades and we see no reason why the same pattern cannot be followed in the changing global scenario.

By not allowing foreign law firms, do we stand to lose out to, say, Hong Kong or Singapore?

Indian law firms do not stand to lose out to Hong Kong, Singapore or Seoul. It has the inherent strength to export its legal services without having a practice base in a foreign country. Increasing number of firms engaged in Legal Process Outsourcing (LPOs) clearly demonstrate that Indian professionals command great respect from foreign multinational companies and even from the foreign law firms.

With even China and Malyasia opening up the legal sector, how long can we afford to stall the entry of foreign law firms?

China never had any significant number of domestic legal professionals and they are relying heavily on foreign expertise in this regard. Malaysia may also have its own reasons but one thing is certain that there is no unrestricted entry of foreign law firms in any part of the world. In the United States there is now a move to liberalise legal profession within the U.S. to enable lawyers of one State in theU.S. to practice in another State within the U.S. Fortunately we do not have such restrictions in our country.

Isn’t the pie big enough for both Indian firms and foreign firms to co-exist?

The question is not of the pie but one of principle. Who needs foreign law firms in India? In a seminar held by CII nearly two years ago, the bigwigs of the corporate sector categorically said that they were very happy and satisfied with the competence of Indian law firms and they felt no need to have the services of a foreign law firm available to them in India.

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