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Professor David Wilkins, Faculty Director of the Center on the Legal Profession (HLS CLP), has been teaching at Harvard Law School for over 30 years. His major interest throughout this time has been the transformation of the legal profession, first in the US, and then, all around the world.
Most recently, Professor Wilkins and his team have been working on studying the development of legal profession following the liberalisation of various economies, and will be visiting India this month.
In this interview with Bar & Bench’s Varun Marwah, Professor Wilkins talks about how India’s legal profession, in its post-liberalisation development phase, while borrowing several practices from the West, has also retained several characteristics that are uniquely Indian.
What brings you to India?
Close to a decade ago, I began to realise that some of the most significant changes that were affecting the entire global legal profession were happening in the emerging economies, the BRICS nations.
And thus, we started a research project titled Globalization Lawyers and Emerging Economies or GLEE for short, to study these developments. And the first country I viewed as the best place to study for what was happening, and which hadn’t nearly been studied enough, was India. We began our project in India which eventually culminated in our recent book, The Indian Legal Profession in the Age of Globalization, which is officially being launched in December 2017.
How has the ‘corporate law firm’ market shaped up in India since liberalisation?
The market started to develop with liberalisation in 1991, but there was rampant growth towards the end of ‘90s and moving into the beginning of the 21st century. That’s where you saw the growth and development of not just the ‘Big 5’ law firms – firms like AZB & Partners, Khaitan & Co, J. Sagar Associates, Luthra & Luthra, and Amarchand – but also the creation of the second ‘new generation’ law firms like Trilegal and Economic Laws Practice, firms which have now become quite important in their own right.
This was a whole new development. There weren’t any Anglo-American style firms prior to liberalization. The law firm sector was made up mostly by old colonial British Raj law firms like Crawford Bayley and Mulla & Mulla. One of the stories we talk about in the book is that you might have expected those firms to be the best placed to take advantage of the liberalization given their first-mover advantage, but it turns out that over time they lost their pre-eminence. That being said, some of the old firms, like Amarchand and Khaitan, did adapt and change in the new circumstances, and are now thriving.
The book speaks of the Cravath model, which has been exported into India. Could you elaborate on that?
The model for the large law firms that every other country in the world has looked to is the Anglo-American model – often called the ‘Cravath Model’ – that was adopted from the law firm Cravath, Swaine & Moore.
From the last decades of the 19th century and into the early decade of the 20th century, Cravath, Swain & Moore began to develop a model for a law firm — a model where you hire juniors straight out of law school and train them to eventually become partners and where work is divided into specialties. All the things we view as the hallmark of a modern law firm began with Cravath. It was something you only saw in the States and then, it moved to UK and Western Europe.
One of the questions we explore in the book is how much is this model moving to emerging economies such as India. And the answer is: it’s complicated! On one level, many parts of the model can be found in India’s new corporate law firms. And the reason why the ‘Big 5’ emerged as the dominant players is because they embraced the model to a much greater degree than the traditional British Raj firms that dominated India before liberalisation.
But the complication is that the Cravath model and other Anglo-American aspects of large law firms have been undergoing their own transformations in the US, UK and the West at the same time as the Indian law firms were developing and looking at the model.
Indian law firms are, therefore, trying to adapt to these changes, all the while keeping many important features that are rooted in India’s culture and environment; so, it’s a complex mix.
For instance, family ownership. Many of the most successful Indian firms are still substantially owned or controlled by founding families. Also, India’s complex structure of communal, regional, and religious diversity continues to play an important role in the way Indian firms are developing and operating.
So, it would be wrong to look at the Indian market as simply a reflection of the developments that are happening in the West. Rather, it’s a complex mix between global influences and strong, important elements of India’s history and cultural essence.
The book also speaks of two distinct classes of the Bar in the US: those that serve individual/small businesses and those that serve big business/large companies. Based on your studies, how far is that applicable to India?
One of the major aspects about the study, which we undertook was whether or not we would see the development of a distinct corporate sector of the Bar, and I think that has happened in India since liberalization, and particularly since the late ‘90s. We now have a distinct sector primarily made up not only of growing number of large law firms, but also of smaller boutique law firms that are dedicated to serving corporate clients — a further sign of continued development and elaboration of the legal market.
We also see a growing in-house legal sector, where now you have some companies like the Tata Group having close to 400 in-house lawyers and other major Indian companies, like Mahindra & Mahindra or the Birla Group or Infosys also developing large, sophisticated in-house departments. And then you’ve got a new Indian LPO sector, which is also functioning around serving corporate clients.
But all of these sectors are distinct from the traditional Indian Bar that continues to represent individuals and small businesses. The overwhelming majority of Indian lawyers still practice in very traditional ways, mostly aimed at individuals and small businesses. But this new corporate legal sector is developing quite rapidly and exerting influence on the rest of the Indian legal profession.
While the Indian economy started opening up long back, there has been considerable debate around opening up of the legal sector. What are your views on the topic?
This is one of the areas that has been debated for a long time, and with further opening of the Indian economy under the new government, it is now much more likely to happen. In some ways, that is likely to change what the corporate law firm market in India looks like.
However, I don’t think there will be a huge number of foreign law firms that will open full-fledged offices in India, because a lot depends on how the market will open. There are many unanswered questions. For instance, will law firms have to come in and establish joint ventures with local partners as is done in Singapore? It’s issues like that which will determine the shape of the market.
Having said that, the entry will in one way or the other continue the trend of putting pressure on Indian law firms to one, update their practices, and two, compete for both clients and talented Indian lawyers. Frankly, I think Indian law firms are well positioned to engage in that competition. There are excellent law firms and there’s excellent legal talent.
The shape of the market will also be determined by what the General Counsels do and say. They’re not likely to move their business to foreign law firms since most of the expertise they require is likely to be located with Indian law firms and lawyers. They’re also very conscious of the cost.
From a different perspective, most young Indian lawyers I know want to see the market open, mostly because it creates more choices for them, upward pressure on salaries, and greater opportunities for exposure.
In the end, the market opening will be good for Indian law firms and India in general because many of these talented Indian lawyers are leaving to practice in other countries, such as the UK, US and Singapore, where they can get the kind of training and expertise that they want. Like in many other areas, India would be well served if it tries to keep as many of those talented lawyers in India as they can.
Where does India stand in the ‘in-house counsel movement’?
We did a big survey of India’s in-house legal departments – the most comprehensive survey conducted on India’s legal departments ever done – and what we find is an evolving picture.
If you look back to where India’s in-house departments were 10 years ago, let alone 20 years, there has been a tremendous change. Traditionally, the in-house position might not have been staffed by someone who was a qualified lawyer. Indeed, in many cases it was the company secretary, and that the legal department might have reported to the CFO, not the CEO.
We’ve seen a tremendous change in the status of the in-house legal departments and the lawyers who are now being brought to run these departments. Most Indian GCs, for example, now report directly to the CEO and have broad control over their company’s legal functions, including the hiring of outside law firms.
But, according to our survey data, if we compare where India’s legal departments are, particularly for Indian companies, with companies based in US or UK, there still is tremendous difference. And I think it is safe to say that most GCs in India would agree they still have a long way to go to attain that influence, power and stature both within the organisation and externally vis-à-vis law firms and the broader political-economic environment, compared to their Western peers.
However, we see there is movement in that direction. But again, it is going to be affected by things that are uniquely Indian because many Indian companies are owned or controlled by families or promoters and that relationship between those owners and their GCs is likely to be different than it is in companies in the West that are much more likely to have a diffused ownership around multiple shareholders and stakeholders.
So, while there are differences, we see an evolution in the largest and most sophisticated Indian companies towards a model that looks more like the one embodied in the phrase the ‘in-house counsel revolution’.
While we’re on the topic, in-house lawyers in India are required to give up their Bar license. Do we see this practice in other jurisdictions as well or is it uniquely Indian?
This is a major issue. It’s true not just in India, but in many other countries around the world. That being said, it’s not true in the US, where in-house lawyers and external law firm lawyers are treated on par. It really comes from a traditional school of thought where a lawyer must be independent. And by independent, they mean work in an organization owned or controlled only by lawyers.
The belief is that since in-house lawyers work in an organization owned and controlled by people other than lawyers, that lawyer cannot be independent in the truest sense. This has been a major part of what we call the ‘in house counsel revolution’ and we document in the book what has happened in US and many other Western countries.
There has been a deliberate push to change that mindset to show that a lawyer working inside a company can still be an independent professional. And that means that it’s not correct that they should be stripped of their professional qualifications. In many jurisdictions around the world, that has changed. I would say even in India, quite frankly, if there is a formal idea that an in-house lawyer is not a full fledged member of the bar, that is changing in perception. The GCs of large Indian conglomerates are now considered as major players in the legal profession.
Do you see increasing participation by the Indian legal community on international forums?
One of the sections of the book is dedicated to how India has tried to develop capacity in the legal sector to interface between India and its business interests with what we call the institutions of global governance, such as the WTO and IMF. When India opened up in ’91, one of the several noticeable things, apart from increase in foreign direct investment, was the increasing movement of Indian companies around the world.
One of the things we document is the way in which India has developed a set of specialized lawyers who operate in cases involving these institutions of global governance like the WTO and how Indian lawyers have developed into ones that specialize in areas such as trade and anti-dumping.
And India has turned out to be quite successful in many arenas. There has been a shift in stance from where those arenas were dominated by the US and other Western countries, to one where countries like India have become quite sophisticated and successful. And that is part of the story of how opening of the Indian economy is changing the legal profession.
Any concluding remarks?
We’re proud of the book because it documents the evolution of the Indian legal profession in a way that has never been done before, particularly the transformation that has occurred in India since 1991 and where we are today. But this is a continuing story.
We hope to encourage academics, practitioners, and policy makers to realize the importance of the Indian legal profession, its development internally, and as an increasingly important country in the world, and to continue to debate and document the way in which an Indian lawyer can and should continue to participate.