Business Today

Allow foreign legal firms in India: Salve

Foreign law firms have clients who need advice on Indian law issues, on structuring transactions, and also help in litigation in India.

Harish Salve | Print Edition: February 7, 2010

I have been dealing with the issue of "foreign law firms" practicing in India from the time that I was asked by the government to receive a delegation of English lawyers, when I was the solicitor general of India.

At the outset, it is necessary to understand what precisely is the proposal of foreign law firms practicing in India.

No foreign national has expressed any interest whatsoever in appearing in an Indian Court or Tribunal. Equally no foreign national has expressed an interest of shifting to India to set up a law practice.

Foreign law firms have clients who need advice on Indian law issues, on structuring transactions, and also help in litigation in India.

For the present, foreign law firms have to first hook up with an Indian law firm, who provides legal advice - or at least bills for providing legal advice and help - and once this is done it does not matter who does how much of the work involved in structuring the transaction.

I am not being critical of any Indian law firm - nor am I suggesting for a moment that they do not provide valuable service. I am only clarifying what exactly is at stake here.

As far as litigation is concerned, they similarly have to first go to an Indian law firm, who then sets up a litigation team and briefs counsel.

The client has to carry the burden of two law firms acting on its behalf.

What the foreign law firms propose is to set up an Indian office, which would have Indian lawyers practicing in India and entitled to practice in India.

These lawyers would be trained to work in the same work culture and style (and discipline) as the foreign law firm - and believe me we have a lot we can benefit from this.

Instead of engaging an Indian law firm, the foreign law firm would use its Indian office to do the Indian leg of the work.

I do not see any illegality - or impropriety - in such an arrangement.

The downsides will obviously be on the revenues of Indian law firms - the handful of them who engage in corporate work.

The upside would be that Indian juniors - who presently are hired by Indian law firms and do bulk of the work - would be similarly hired by foreign law firms. Obviously it would increase the pressure on the "market" for young Indian lawyers, and that would have favorable results on their remuneration. It would lead to a situation that it would attract the best of Indian talent to the legal profession.

Secondly, it would give young Indian lawyers the advantage of practicing at home, and at the same time being the part of and international law firm - working in their culture and discipline. It would, over a period of time, create a whole brood of truly international Indian lawyers.

The Bombay High Court judgment resolves issues that may not be of any real significance in the present scenario.

Section 29 applies to individuals - all the individuals practicing law would be lawyers enrolled in India.

Section 30 confers an exclusivity in favor of enrolled advocates in respect of the entitlement to "…practice in any Court or before any authority or person …". It obviously refers to litigious practice.

Even assuming that non litigious practice is covered by Section 30 (a conclusion with which I do not agree), it does not forbid an Indian lawyers from acting as an associate or under the name of a foreign law firm.

The issues raised in the High Court were on the premise that a foreign law firm would directly practice in India - which I do not think reflects the correct perspective.

The issue of the FERA permission is now of no significance.

In my perception, this obdurate refusal to "allow" foreign firms to set up base in India - by engaging Indian lawyers to work the Indian office - is unfortunate. I think Indian lawyers are amongst the finest in the world - and we can benefit immeasurably by learning from the experience of the foreign law firms who have the experience of mega transactions and transnational deals - for as our scriptures teach us, we must let in "light" from all over the universe.

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