The Bar Council of India has received a representation from the Society of Indian Law Firms (SILF), highlighting its concerns with the opening up of the Indian legal market for foreign lawyers.
The SILF said in its representation that it welcomed the move to allow foreign lawyers and firms to practice in India, however, it raised some issues regarding the timing of this step and how it would be implemented.
As oer SILF, under the able guidance of its President Lalit Bhasin and Associate President Jyoti Sagar, it was necessary to lay out a blueprint of the future of Indian legal profession.
In its representation, the SILF mentioned that it has been over a decade since the support for a regulated and phased entry in India of foreign lawyers and foreign law has been promoted by them.
The SILF letter further said that such opening-up of the sector would recharge the fraternity by providing opportunities for Indian lawyers and law firms.
The representation mentioned how this would facilitate the exchange of knowledge, best practices and result in increased cross-border legal work in India, along with providing the much-needed advice to Indian businesses in respect of foreign laws.
The law firm body cautioned that the Rules were not in conformity with the judgment of the Supreme Court of India, delivered in March 2018 in the BCI vs A.K. Balaji case.
The letter mentioned that the Supreme Court had held that under the Advocates Act, 1961, only Advocates enrolled with State Bar Councils were entitled to practice law – whether Indian law or foreign law – in India.
The SILF asked for an appropriate sequencing and amendment of the Act to enable the practice of law in India by persons such as foreign lawyers.
The letter further mentioned that in absence of such enablement in the Act, the Rules were open to challenge.
It mentioned how over the several years,
a consensus amongst all stake holders – the Government of India, the BCI, and the profession has been deliberated on opening up of the market in a planned manner and not in an ad hoc manner – and that it must be a part of an overall thought through reform of the legal services sector.
It mentioned about three-phase sequential approach, which must begin with opening up of the Indian legal sector with regulatory reform of the Indian profession that continued to be governed by centuries-old traditions, while the world has moved on.
It was imperative to create a level playing field for Indian lawyers by the time foreign lawyers were allowed in the next phase, noted the letter.
The SILF mentioned that it was very sad that domestic reforms have remained unattended for a long time and have not been addressed with the same alacrity as the Rules.
Citing on the same, it mentioned how a phased approach to opening up as an established model has been used in other jurisdictions – such as China, Singapore, Japan, and the Republic of Korea. Learning from them could provide useful guidance on designing and implementing the ‘opening up’ of Indian legal services to foreign lawyers and law firms.
It added that in all these jurisdictions, carefully articulated programmes of opening have been and were being implemented – in most cases – over decades.
SILF mentions how keeping aside the question of foundational legality, the rules question several critical concerns. To begin with the Rules discriminating between Indian lawyers and Indian law firms as one class and foreign lawyers and foreign law firms as another class.
It added that while the Indian profession is governed by the code of conduct and regulations under the Act, foreign lawyers and foreign law firms will be governed by their home country’s rules. This is contrary not only BCI’s own stand over the years, it is also violative of the decision of the Hon’ble Supreme Court of India.
The letter mentions that the professional rules in India are ancient as they do not recognize the concept of a law firm; do not permit Indian lawyers to form limited liability partnerships; do not permit any form of marketing; do not permit innovative fee structures (such as contingency fees, success fees).
While contrary to this, the Rules allow not only individual foreign lawyers but also companies and corporations to practice in India; foreign lawyers and foreign firms not being bound by the Indian professional code of conduct could undertake marketing activities, enter into fee arrangements, and much more.
It is Surprising that BCI has ceded disciplinary jurisdiction over foreign lawyers and foreign law firms to respective foreign regulators, resulting in foreign lawyers and foreign law firms not only having their own codes of conduct but would be judged by foreign regulators.
Need is therefore not just globalisation but Glocalisation.
The representation states that the
access to a market for professional services is anchored on the principle of “reciprocity”. Simply put, if India gives market access to a professional from country X, then Country X must give equal give access to its market to professionals from India.
The Rules are deficient both in the understanding of the concepts of “reciprocity” and in the implementation.
Furthermore, the SILF mentions how as real life experience tell us reciprocity has to be substantive and not theoretical.
It added that while a foreign government or competent authority may acknowledge reciprocity, other discriminatory practices like immigration rules and work permits can make a mockery of reciprocity.
Free movement of professionals across borders then has to be permitted on an equal basis to establish “real and meaningful” reciprocity.
The Rules do lack substance and the BCI does not have the regulatory competence to deal with issues of “reciprocity”.
The Rules are also vague or on critical issues like eligibility criteria for registration of foreign lawyers and foreign law firms.
It further mentioned a very promonent point that the credentials are left to be self-declared; no scrutiny concerning national security; foreign firms which undertake multidisciplinary practice including law would be permitted under the Rules.
It added that there is no regulation on the relationship with Indian professionals. so the exposure to surrogate practices where foreign lawyers and foreign firms could control Indian lawyers and Indian law firms and thereby practice Indian law – that is doing indirectly what can’t be done indirectly.
SILF believes that it is in the national interest to lay out a blueprint – the larger mosaic – of the future of the Indian profession as it has the commitment and belief that a consensus of all stakeholders through consultation and engagement is imperative to achieve the results.
As a matter of fact, the SILF members are committed to provide legal support to economic development of the country by promoting ease of doing business.
As we all know the Global cooperation among legal fraternities is essential and so SILF is actively coordinating successfully with institutions such as International Bar Association, American Bar Association, Law Society of England and Wales, Inter Pacific Bar Association, LAWASIA, Bar of European Union, Federation of Japan Bar Associations regarding contemporaneous developments in law.
Accordingly 125 or so members of SILF have been enjoying global recognition but for giving formal right to practice law in India certain safeguards and appropriate regulatory mechanism should be put in place which should be legally sustainable in accordance with Indian law.