Many have written about the 2025 amendments to the Bar Council of India (BCI) Rules for the Registration and Regulation of Foreign Lawyers and Foreign Law Firms and I want to consider them further. Why? Because they are a real-life example of the law of unintended consequences: they severely curtail the ability of global companies to do business in India.
So, what was the BCI's action? It adopted the Rules believing that it was “opening up the legal profession in India to foreign lawyers...[so as to] meaningfully contribute to the growth of the legal domain in India, ultimately benefiting Indian lawyers as well.”
To the mind of the BCI, it was addressing “concerns about encouraging Foreign Direct Investment (FDI) in India.” What is the unintended consequence? The Rules essentially make it impossible for a foreign in-house lawyer at a company to travel to India to address legal matters.
Why is this the case? The Rules define a “foreign lawyer” as “any individual, law firm, limited liability partnership (LLP), company, corporation, or any other legal entity, by whatever name called or described, that is authorized to practice law under the regulatory framework of a foreign country.”
The definition applies to any foreign lawyer admitted to a national or state bar and it fails to distinguish between lawyers in private practice and in-house. Consequently, a foreign in-house lawyer at a company – whether the parent or subsidiary – falls within the scope of the Rules.
What does this mean? The Rules set out the requirements with which a foreign lawyer needs to comply in order to be authorised to “practice law in India.” They also formalise the requirements with which foreign lawyers need to comply in order to benefit from the “fly-in and fly-out” (FIFO) exception to the registration requirements. The concept of the “practice of law in India” is broadly construed.
Interestingly, the Rules do not create issues solely for the legal team of foreign parent companies with subsidiaries in India. Indeed, keen to insist on “reciprocity,” the BCI creates reciprocal issues for Indian companies with subsidiaries outside of India staffed with foreign lawyers. The issue arises from the mere fact that the foreign lawyer travels to India and engages in the “practice of law” in India – including advising his/her India-based colleagues on matters of law other than India law.
For the sake of discussion, let’s assume no foreign in-house lawyer wants to go through the burden of satisfying the registration requirements which, to date, cannot be satisfied by a US lawyer. If so, then she/he has to comply with the FIFO exception, which means that she/he must file a “Fly-In Fly-Out Declaration for Foreign Lawyers and Foreign Law Firms in India” (the FIFO application) with the BCI before travelling to India. The FIFO application requires that the foreign lawyer disclose (a) the nature of the legal work proposed; (b) the specific legal areas involved; (c) the details of the client (name, address and contact information); and (d) the purpose of the visit, including specifying the “nature of legal work and jurisdiction involved.”
What CEO of a multinational company - whether Indian or foreign - is going to want his in-house lawyer disclosing this type of information to a statutory body created by the Parliament of India, particularly when the Ministry of Law also reviews the application? Putting this aside, how does the foreign in-house lawyer comply with the requirements of the FIFO application while satisfying her/his ethical obligations to “not knowingly...reveal a confidence or secret of the lawyer’s client” (as would be required in the US)?
What happens if our intrepid in-house lawyer fails to comply with the FIFO exception and travels to India to advise his/her client in violation of the Rules? In the BCI’s own words:
“[A]ny individual, law firm, or entity, whether foreign or India which directly or indirectly circumvents, violates, or seeks to subvert the [Rules], shall be subject to strict regulatory action. Such action may include suspension or cancellation of registration, imposition of monetary penalties, forfeiture of the security deposit, debarment from future registration for a specified period, and where applicable, initiation of disciplinary or criminal proceedings under relevant Indian laws.”
High stakes for doing one’s job.
The BCI acted supposedly with the best intentions. What are global companies with activities in India experiencing? Unintended consequences. Short of disclosing confidential information, the Rules effectively prevent foreign in-house lawyers from travelling to India so that they can do their job: advise on matters of law other than Indian law. Clearly, the Rules neither help promote FDI nor improve the ease of doing business in India.
Ralph C Voltmer, is a partner in Covington & Burling's corporate group and head of the firm’s India Practice.