INTRODUCTION
On 15th March 2023, while putting forth the revolutionary rules, the Bar Council of India allowed foreign firms and lawyers to start their legal practice in the Indian subcontinent.1 The Bar Council of India (BCI) is hopeful that permitting the entry of foreign law practitioners to the Indian legal market in non-litigious cases and international arbitration disputes would go a long way in booming the legal profession in the country. Although the BCI believes that these directives will not pose any threat to the Indian legal domain, a heated debate highlighting the advantages and disadvantages of such an action has taken over the corporate law sphere in India.
With the evolving time, opening up the Indian legal space to interested foreign parties can be a major step towards diversification of the "law" as a profession in India, making this extensive tangled system more qualified and refined. But despite many nakedly visible benefits, corporate lawyers have been raising concerns while stating that such rapid and unorganized invitations could lead to the hijacking of the Indian legal market by foreign professionals.
A LONG-RUNNING FRAMEWORK OF THE INDIAN LEGAL MARKET
The Indian legal market is a complex and diverse system comprising various laws and regulations that govern different aspects of Indian society. This mammoth legal system is a mix of common law and civil law regulated by the Bar Council of India (BCI), which has been empowered to set standards for legal education and professional conduct in the country.
Except for the United States of America, India falls behind no other country in the numerical strength of enrolled lawyers in the profession. Apart from independent practitioners, the Indian legal market is also home to a wide range of law firms and legal service providers, both domestic and international, which offer a broad range of legal services to clients across various sectors thereby making it highly competitive, with firms competing for clients and talent.
However, the legal market in India was also highly regulated, with restrictions on foreign firms operating in the country and limits on the types of services they offer. This long-running framework of the country's legal system is outlined to be updated according to the revolutionary rules laid down by the BCI, which had invited criticisms from numerous domestic law firms and associations.
BAR COUNCIL OF INDIA'S CONTENTIOUS RULES
The publicized BCI directives will, on a reciprocity basis, enable foreign attorneys and law firms to exercise diverse transnational law and transnational arbitration in India. Such practices will include corporate work such as joint ventures, mergers & acquisitions, intellectual property matters, contractual disputes, and other related matters. These foreign law practitioners were, until now, allowed to practice their profession in a regulated manner wherein their arrival was marked for a short period to carry out their unpretentious vocation.
The regulations require the registration of foreign lawyers and law firms with the Bar Council of India (BCI). Furthermore, they are also required to submit a certificate from the Union Law Ministry and Ministry of External Affairs, as well as a certificate from a competent authority from the concerned foreign country. This registration will be issued for a period of 5 years on a renewal basis.
SPECIFYING THE CAUSE OF PANDEMONIUM
The Society of Indian Law Firms (SILF) has been demanding the revocation of rules framed by the BCI and has termed this move of the Bar as "abrupt and disoriented".2 Through its arguments, the SILF seems to highlight the premature delivery of the BCI directives and has specified reasons that need to be taken into consideration before the implication of such significant changes. Those reasons were:
- Hasty invitations to foreign firms without ensuring the sustainability of the action
The SILF and other lawyers have stated that they are not against the diversification of the sector if it is in a phased manner. They opine that a phasic acceptance of foreign lawyers and law firms would grant an observation period to the Bar Council of India to make suitabilities and amendments in the laws to support their existence in the country.
- Ignoring the Supreme Court verdict
The dissenters of the BCI rules contend that the regulatory Bar Council did not take into consideration the Supreme Court verdict in the Bar Council of India v. A.K. Balaji & Ors.3 In this landmark case, the apex court of India held that foreign law enterprises and foreign lawyers cannot set up offices and exercise their profession in India, but they can give advice to Indian clients in 'fly in and fly out' mode on a temporary basis.
The SILF and other objectors to the rules argue that the implication of a revolutionary directive as this, should not overlook an important legal precedent of the Supreme Court verdict in the "Balaji case".
- Controversies regarding amendment of the Advocates Act, 1961
The BCI rules require foreign law firms and lawyers to register themselves with the Bar Council of India, and the Advocates Act, 1961 permits the lawyers enrolled with the Bar Council of India (BCI) to practice law in India.4 This deadlocks the updated regulations from coming into force as it goes against the decision of the Supreme Court in the "Balaji case". Therefore, unless the existing law is amended to permit foreign law practitioners from practicing law in India, the rules cannot be implemented.
CONCLUSION: DIVERSIFYING OR HIJACKING?
Allowing foreign law firms and lawyers to practice in India would require significant regulatory changes. The Indian legal system is complex and would need to be adapted to accommodate foreign law firms and lawyers which could be a time-consuming and challenging process. Moreover, permitting foreign law firms and lawyers to practice in India could be a threat to Indian legal professionals. Immigration of foreign law practitioners could "hijack" the domestic market, which could inevitably lead to a loss of jobs for Indian lawyers and could make it more difficult for Indian law firms to compete.
However, allowing foreign law firms and lawyers to practice in India would increase competition and provide Indian clients with more options. This could potentially lead to lower costs for legal services and greater efficiency in the delivery of legal services. Foreign law firms and lawyers could bring global expertise and experience to the Indian legal market which could be particularly beneficial in areas such as international trade, intellectual property, and cross-border mergers and acquisitions.
But, the concerns of the Society of Indian Law Firms (SILF) and others dissenters of the BCI rules are real. The unregulated and sudden entry of foreign law practitioners into the country without updating the checks and balances measures could turn out to be devastating for domestic lawyers and law firms. While it could lead to increased competition, access to global expertise, and improved standards, it could also be a threat to Indian legal professionals, pose cultural challenges, and require significant regulatory changes. Therefore, the decision to allow foreign law firms and lawyers to practice in India ought not to be rushed and should be made after careful consideration of multifarious interests and possible consequences.
Footnotes
3. https://itatonline.org/digest/bar-council-of-india-v-a-k-balaji-and-others-air-2018-sc-1382/.
4. http://www.barcouncilofindia.org/about/enrolment-of-advocates/.
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