The government’s >proposal to open up the legal services sector to foreign participation in a limited way may mark the end of India’s policy of barring international law firms from entering the country and of keeping domestic firms and lawyers insulated from the growing global market for trade in legal services. The government says it has both the Bar Council of India and the Society of Indian Law Firms (SILF) on board. The proposed entry of foreign firms will be limited to aspects other than litigation and to international commercial arbitration. The presence of overseas lawyers in forums of litigation is of course ruled out. It is unlikely that foreign firms will be interested in litigation work, which is by and large organised and regulated on national lines. Further, unless there is reciprocity with regard to recognition of legal qualifications among member-countries, it will not be possible for visiting legal professionals to overcome basic eligibility norms. Ever since the General Agreement on Trade in Services was adopted by member-countries of the World Trade Organisation (WTO), the potential for legal professionals to offer services outside their national jurisdiction has expanded exponentially. Apart from drafting of agreements and contracts and rendering general advice to overseas clients on domestic legal regimes and frameworks, advocates and law firms now play a big role in starting new businesses, mergers and acquisitions, advising on investments, complying with regulations and obtaining clearances.
At the same time, there has been disquiet in the legal fraternity about the possible adverse implications of the entry of foreign firms which, presumably, are better organised and have better resources to corner the legal services market. Some went to court and obtained favourable orders barring the entry of overseas players. The courts have so far said foreign firms cannot practise in India without adhering to the Advocates’ Act. However, the Madras High Court has allowed overseas professionals to fly in to offer advice to clients on international legal issues, and participate in international commercial arbitration. The matter is now in the Supreme Court, but if the government can carry the legal fraternity along on its proposals, India will be in a position to benefit from opening up the sector. However, all stakeholders must see to it that it does not have an adverse impact either on the cost of litigation or on the livelihood of hundreds of thousands of people enrolled as advocates in the country. A key consideration would be whether India ought not to try and get a share in the estimated $20-billion global annual trade in legal services. The country now has better law schools and a vast pool of legal talent; there is no reason why it should not succeed.
