Entry of foreign law firms: Indian firms flag concerns on reciprocity, level-playing field; SILF to send representation to BCI

The Society of Indian Law Firms (SILF) on Monday resolved to send a representation to the Bar Council of India (BCI) on the latter's recently released Rules allowing the entry of foreign law firms into India..The representation will point out the deficiencies, irregularities, vagueness and illegalities in the Bar Council of India Rules for Registration and Regulation of Foreign Lawyers and Foreign Law Firms in India, 2022 notified this month. The representation will also demand the creation of a level playing field for Indian law firms. In the meanwhile, SILF will also ask BCI to hold off on implementing the Rules..At a meeting held today, SILF President Lalit Bhasin formed a Drafting Committee to prepare the representation. The Drafting Committee includes:Jyoti Sagar (Chairman, Jyoti Sagar Associates)V Lakshmikumaran (Founder & Managing Partner, Lakshmikumaran & Sridharan)Pallavi Shroff (Managing Partner, Shardul Amarchand Mangaldas)Amit Kapur (Joint Managing Partner, JSA)L Badri Narayan (Partner, Lakshmikumaran & Sridharan).During the meeting, Managing Partners of Indian law firms expressed their concerns regarding the decision to open up the Indian legal market.Some of the Managing Partners were even in favour of challenging the Rules before the courts.However, Bhasin was very clear that the first step would be dialogue, to which end a representation would be sent to the BCI and the Union Ministries of Law & Justice and Commerce..Some of the major concerns expressed at the meeting included:The BCI Rules have been brought in a hurry due to internal and external pressure. The Indian legal profession needs to be reformed if it has to compete with international law firms. There is no level playing field given the constraints on Indian firms regarding forming LLPs, advertising, marketing etc. BCI has come out with these Rules now in 2023 while the BCI Chairman in July 2017 had agreed to bring out the reform of the Indian profession. Indian law firms are not recognized under the Advocates Act, while foreign law firms can be registered in India under these new Rules. BCI cannot take disciplinary action against foreign law firms and lawyers. It is only the disciplinary authority of the firm's own jurisdiction that can take action. BCI can only report to that country's regulatory authority, which can decide whether or not to take action. This process can take a long time. There is no clarity on reciprocity - it has to be country wise. What does it mean in terms of global law firms that have offices across the world? There is a lack of clarity on what foreign lawyers can do or can't do. Foreign law firms are allowed to lobby, which is not permitted in India. Will foreign firms be able to lobby on the basis on reciprocity? How will the BCI prevent it? Suitability of foreign lawyers in the context of India. Given that there are no barriers or restrictions, it will put India at risk. The BCI Rules are contradictory to the clarification issued by BCI. Rules are ultra vires the Advocates Act, 1961 and beyond its ambit. The Rules are also against the Supreme Court decision in AK Balaji. With these Rules, India has lost its bargaining power in any of the trade negotiations. .During meeting, Bhasin highlighted the point that the Rules were brought in sans any discussion with Indian firms."The methodology should’ve been to circulate certain Draft Rules, giving a certain timeline - say 1-2 months. We know you are under pressure, but give us time, take our view and then come out [with the Rules], as it’s normally done...The Rules have become automatically applicable without anything more being done, it is virtually more like a midnight declaration."He opined that challenges to the Rules before the courts could not be ruled out."The problem, personally, which I have discussed with my colleagues here is you may have good intentions to bring these Rules, but you’re still running the risk of these rules being challenged by anyone, on the ground that these are against the law laid down by the Supreme Court in AK Balaji’s case of 2018, where the Supreme Court very clearly and categorically said, “Foreign Lawyers and foreign law firms cannot practice law in India”. And practice of law was defined by the Supreme Court as not just litigation but also all the corporate, transactional work, every type of legal work.".Jyoti Sagar stressed on the need for a level playing field to be created for Indian firms. He said,"We cannot compete with our hands tied behind our backs...The entire issue of marketing and business promotion activities, they should be allowed. We have no provision in the Advocates Act which recognizes firms, and these Rules say foreign law firms, foreign lawyers, corporations, companies whereas under our Advocates Act, it’s only individuals who can be practicing law and individuals collectively in a partnership can practice law."Questioning how reciprocity may work under the Rules, he said,"There is nothing in the Rules which actually deals with very critical issues. So they have a concept of a foreign lawyer who has a primary qualification. How do you apply that for a law firm? Now, if you have reciprocity with the UK - because they seem to rely a lot on the UK - you don’t have reciprocity with many other countries. If those countries’ nationals are partners of a large law firm with 1,000 partners, can those lawyers come and practice in India? What happens to reciprocity? What does reciprocity mean in terms of a global firm which has 50 offices all around the world? You are a reciprocal to what and whom?"He also criticised the language used in the "poorly drafted" Rules, opining,"Law firms do not have primary qualifications. It is the lawyers who have primary qualifications...They are very poorly drafted Rules which leaves a lot of scope for unfair play. And fighting reciprocity is a very key element...you see what reciprocity in the UK is. Can an Indian law firm even go and succeed in the UK? I tell you, if all of us Indian law firms got together and we set up a common law firm in the UK, we still can’t compete. They will not give you work permits, there will be immigration difficulties and so on...I feel, by doing this, the Bar Council and the Ministry of Law have given away the bargaining point that we had in any trade locations.".Shardul Amarchand Mangaldas Chairman Shardul Shroff weighed in on the lack of disciplinary provisions in case of breach on the part of the foreign firm or lawyer.On the point of suitability of foreign lawyers for practice in India, he pointed out,"The cornerstone of registering an Indian lawyer is suitability. If, for example, you see the enrollment form or membership form for becoming enrolled in a State Bar Council - you have to have the support of a domestic lawyer. You have to have worked with or have had exposure with a lawyer of 10 years' standing. Where is all that in the context of this registered (foreign) lawyer?".Founder of ASC Legal, Solicitors & Advocates Aseem Chawla said,"For SILF, it has to be a very balancing act as it echoes the view of large section of law firms."Founder and Managing Partner of Cyril Amarchand Mangaldas Cyril Shroff opined,"We should not as SILF challenge the Rules. We should not be on the wrong side of history. We should make a strong representation.".Some of the other law firm partners who were present at the meeting were Ashish Razdan (Khaitan & Co), Arush Khanna, Charandeep Kaur (Trilegal), Mohit Gogia (S&R Partners), Mukesh Bhutani, Nishith Desai (NDA), Rohit Kochhar (Kochhar & Co), Shweta Bharti and Suhail Nathani (ELP)..The new BCI Rules allow foreign lawyers and law firms to practice foreign law in India on a reciprocity basis. Justifying the move, the BCI had stated in its statement of objects and reasons,"Time has come to take a call on the issue. Bar Council of India is of the view that opening up of law practice in India to foreign lawyers in the field of practice of foreign law; diverse international legal issues in nonlitigious matters and in international arbitration cases would go a long way in helping legal profession/domain grow in India to the benefit of lawyers in India too.".While both Indian and international lawyers welcomed the BCI's move and believe that it will benefical for the profession, they opined that clarity is needed on some aspects..On the opening up of the Indian legal market, Bhasin had earlier said,"It is a welcome step, but the BCI Rules need to be ironed out. Particularly, interest of the Indian legal profession should be safeguarded.".Follow Bar and Bench channel on WhatsAppDownload the Bar and Bench Mobile app for instant access to the latest legal news.