We just witnessed history being made in the Indian legal industry. The Bar Council of India has made a significant decision to allow foreign lawyers and law firms to practice foreign law, international law, and international arbitration matters in India on a reciprocal basis.
The move will boost confidence among foreign investors and improve FDI flow to the country. International Arbitration in India will also benefit. Overall, its a win-win situation for all - Indian lawyers, foreign lawyers and most importantly for clients and the country as India progresses towards becoming the world’s third-largest economy by 2030.
We believe it’s a large step in the right direction and all stakeholders will see upsides in one way or another. There will certainly be more competition for law firms, but the pie should also increase with more FDI flow and arbitration matters coming in. It will also bring more competitiveness which will drive quality of services and innovation levels up.
The Indian legal sector has welcomed this move. The conversation had been going on for quite some time now and the industry is now fully geared up to take on the foreign competition now. The best Indian lawyers are most certainly at par with the best talent globally.
However, one of the main contentions from Indian industry was a level playing field. In India, lawyers were not allowed to promote their practice in any way, including having a website or advertise, whether in print or digitally. On the other hand, there are no restrictions in most developed markets as far as practice promotion is concerned. Since the internet knows few boundaries, the concern has been that spillover may give foreign firms with strong global brands an edge.
So, it is yet to be seen what kind of BD tools Indian lawyers may be allowed to leverage to be able to compete well in the market. However, the existing constraints have made Indian lawyers more resilient and some of the evolved practices in India used classic thought leadership marketing that has positioned them well in India, as well as globally.
However, most of the big players in India will now have to up their game since practice promotion has historically not been a top priority and is an underinvested area within Indian firms.
As we all know, many foreign law firms already have relationships with Indian clients through their investments around the world and they have done many high value transactions for them in the past. With their sophisticated BD support system, it is expected that international firms will move in to increase their workflow from Indian clients, leveraging these existing relationships. But there will also be many more opportunities for international and Indian firms to collaborate to better serve their clients.
International firms now face interesting choices about if, when and how to enter the Indian market with a presence on the ground. You could expect to see the most global firms, which are well versed in navigating markets only partially open to foreign lawyers, to be the first movers. It is notable for example that Baker McKenzie was the first global firm to be commenting to the press welcoming the news. Then there are the firms who have long invested in their relationships with Indian clients and indeed Indian law firms. Not all of these are global firms but there are quite a few of them and we would expect them to also be prioritising market entry.
However, firms will be cautious and will take great care to play by the rules and respect the progressive step India has taken through beginning to open its legal market. Whether they open through small representative offices which they grow over time, joint ventures or even at some point mergers with Indian firms, this will take time and there will be no immediate flood of change. Those entering the Indian market will need to carefully consider their messaging and get their PR strategy right. Opening in India is not “just another office” – within a decade India is set to be one of the big three economies alongside the US and China. Firms must get their entry right.
To end with an old adage from the technology industry, things change more slowly than we expect, but more quickly than we realise. Don’t expect a flood of foreign firm announcements tomorrow, but do expect the legal market in India to look quite different by 2025 compared with today…
Aman Abbas is the CEO of Commwiser Consultants LLP, India.
Gus Sellitto is the Founder of Byfield Consultancy, UK.