During a recent hearing before the Supreme Court, Senior Advocate Indira Jaising raised a pointed question about the scope of the term “industry,” using the legal profession as an example. She asked the Bench whether non-lawyer personnel such as clerks, stenographers and other support staff working in courts and law firms can be excluded from this definition.
In response, Justice BV Nagarathna noted that the original basis for such an exclusion dated back to the 1970s, when legal practice in India was largely confined to individual lawyers or small-scale operations. The structure of the profession, she observed, has since undergone a significant transformation. Contemporary law firms operate on a larger scale, with non-lawyer staff playing a far more substantial and proportionate role in their functioning than ever before.
Jaising’s intervention, coupled with Justice Nagarathna’s acknowledgment of this shift, signals the need for a broader and more sustained examination of how the legal services market - in particular law firms - is understood and positioned within existing legal frameworks.
Indian law firms today find themselves operating within an increasingly competitive and globalised legal services market. The profession in India has been governed by the Advocates Act, 1961 and the Bar Council of India (BCI) Rules, where we see that law firms have been evolving within relatively insular frameworks. This position, however, has begun to shift. In 2022, the BCI introduced the Rules for Registration and Regulation of Foreign Lawyers and Foreign Law Firms in India, 2022. Through mechanisms such as the fly-in fly-out (FIFO) model, foreign law firms are now permitted limited entry, enabling them to offer legal services and establish a degree of presence in India, subject to regulatory constraints. In 2025, the 2022 Rules were further revised to strengthen protections for Indian stakeholders and introduce safeguards governing the operations of foreign law firms within the country.
Despite these regulatory changes and built-in safeguards, a clear shift is underway in the gradual opening of India’s legal market to foreign law firms. This evolving landscape signals that Indian law firms can no longer rely on a protected, closed system. Instead, they must prepare to compete with international firms that often operate with more advanced, scalable and commercially driven models. In this context, without a re-examination of their current traditional structures, Indian law firms risk falling behind in an increasingly integrated and competitive international legal landscape.
At its core, the Indian system treats the practice of law as an activity vested exclusively in individual advocates rather than in firms as independent entities. Law firms are not recognised as separate juridical persons, nor are they permitted to share ownership with non-lawyers. This individual-centric approach shapes every aspect of how legal services are organised and delivered.
The BCI Rules reinforce this structure through multiple restrictions. Advocates are prohibited from engaging in full-time salaried employment, forcing firms to rely on notional “retainership” arrangements even where the nature of work is indistinguishable from structured employment. In parallel, Rule 49 of the BCI Rules effectively prevents law firms from adopting corporate structures, since companies inherently operate through salaried roles under the Companies Act, 2013. As a result, Indian law firms remain confined to traditional partnership or sole proprietorship models, with limited scope for organisational evolution.
These constraints have broader implications for the profession. Advocates, though often working in firm-like environments, are excluded from employment benefits such as gratuity and pensions, as law firms are not treated as formal “establishments.” This creates an inflexible regime, positioning advocates within what is effectively an unorganised sector despite the increasingly institutional nature of legal practice.
The regulatory framework also explicitly limits collaboration and innovation. Rule 2 of Chapter III, Part VI of the BCI Rules prohibits advocates from entering into partnerships or sharing fees with non-advocates, thereby foreclosing the possibility of integrated, multi-disciplinary service delivery. The Supreme Court’s decision in Bar Council of India v. AK Balaji (2018) further entrenches this position by holding that the “practice of law” includes both litigation and non-litigation services and that such practice is reserved exclusively for enrolled advocates. This effectively excludes foreign lawyers and non-legal professionals from participating in the Indian legal market in any substantive capacity, reinforcing a closed and advocate-centric system.
In contrast, several global jurisdictions have moved towards more flexible and market-responsive models of legal service delivery. These systems recognise that the provision of legal services today often intersects with other domains such as finance, technology and consulting. They have adapted their regulatory frameworks accordingly. A key adoption in this regard is the introduction of alternative business structures (ABSs) and multi-disciplinary practices (MDPs). ABSs allow non-lawyers to hold ownership and management positions in law firms, enabling multi-disciplinary partnerships and access to external capital. MDPs involve collaboration among professionals from diverse fields such as law, finance, accounting and consulting, operating within an unified corporate structure to deliver integrated client services. It differs from pure knowledge-sharing initiatives, as MDPs involve formal partnerships and profit sharing with professionals from other fields.
These models aim to promote greater efficiency, professional management and innovation in service delivery while maintaining safeguards for professional independence through ethical and regulatory oversight. For instance, in New South Wales, Australia, the Legal Profession Reform Act, 1993 introduced MDPs, allowing lawyers to partner with professionals from other fields. While the model permits such collaboration, it retains safeguards where lawyers must hold a majority of voting rights and at least 51% of the net income of the practice. Similarly, jurisdictions like the United Kingdom permit a wide range of organisational forms, including ABSs, limited liability partnerships and corporate entities, with regulators such as the Solicitors Regulation Authority ensuring compliance with professional standards.
The Indian regulatory model, however, remains largely incompatible with such new-age models. The prohibition on fee-sharing with non-advocates, the absence of recognition for law firms as independent entities and the restrictions on salaried employment collectively prevent the adoption of ABSs, MDPs or similar structures. Any attempt to introduce these models must contend with a legal framework designed exclusively around individual advocates.
At a structural level, what is required is a shift away from the current advocate-centric framework towards one that recognises law firms as independent legal entities. Rule 49 would need to be amended to allow full-time salaried employment of advocates within regulated settings such as law firms, chambers and legal departments.
To enable ABS and MDP models specifically, existing prohibitions on fee-sharing and partnerships with non-advocates need to be relaxed. Rule 2 of Chapter III, Part VI of the BCI Rules would have to be amended to allow lawyers to collaborate with professionals from other fields, facilitating an integrated service delivery model. In parallel, introducing a formal licensing and regulatory framework to govern the establishment and functioning of ABSs and MDPs, potentially administered by the BCI or state bar councils, would ensure better integration and regulation of these models within the Indian framework. These frameworks could draw from international models such as the UK’s Legal Services Act, 2007 or methods adopted in New South Wales that enable phased and controlled liberalisation.
At the same time, these reforms must be accompanied by robust safeguards. These include ensuring that advocates retain majority ownership and control within such entities, which can be pursued by implementing strict conflict-of-interest protocols and mandating transparency in employment and governance structures. Importantly, these suggestions are not meant to dilute the foundational ethos of the legal profession. The idea of law as a “noble profession” continues to hold value and legitimacy. However, this legacy need not be at odds with reform.
Reform in the Indian legal services market is no longer optional: it has become imperative in light of rapidly evolving global standards for the profession. Enabling ABSs and MDPs can significantly reshape how legal services are delivered, creating space for innovation, improving client outcomes and fostering integrated, “one-stop” solutions that combine legal expertise with allied professional services. Not only does this increase efficiency, it also results in client satisfaction, where they can access all services in the same firm. At the same time, granting formal institutional recognition to law firms and allowing greater flexibility in how they are structured and managed would facilitate access to capital, support long-term investment in technology and talent and enable firms to scale in a sustainable manner.
As the Indian legal service market stands on the threshold of increased global competition, these reforms become essential in ensuring that domestic law firms remain competitive, resilient and capable of meeting both international standards and the complex demands of modern clients.
Navami Krishnamurthy is a research fellow at Vidhi Centre for Legal Policy.