A slow passage to India? Without legislation years of haggling over legal market liberalisation lie ahead

India’s latest plans to open to foreign law firms may stand more chance of success than previous attempts, but the regulation is unclear, writes Hook Tangaza’s Alison Hook

Alison Hook Photo courtesy of Hook Tangaza

On 10 March, a ground-breaking announcement was published in the Gazette of India, which appears to open up the Indian legal market to foreign lawyers. Is this the moment that the doors of the impenetrable fortress of the Indian legal market creak open? Or will the weight of history cause them to slam shut again, just as the 1991 opening introduced by then finance minister Manmohan Singh was subsequently reversed by the Bombay High Court.

There are both reasons to believe that this time it may be different, but also reasons to be cautious and prepare for many years of haggling over the interpretation of regulations.

On the plus side, this move has come from the Bar Council of India (BCI), which both the Indian government and the courts have repeatedly pointed to over the past 30 years as the body with designated powers under the Advocates Act 1961, which had to be the primary arbiter on this issue. Moreover, the immediate reaction in the Indian press and on social media has been positive, which might suggest that the appetite for further debilitating litigation by breakaway groups of Indian lawyers or individuals on this issue is limited, though it can never be ruled out.

But if I were a foreign lawyer looking to practise in India, I would not be booking my passage any time soon.

The ‘Rules for Registration and Regulation of Foreign Lawyers and Foreign Law Firms in India, 2022’ beg too many questions, both practical and legal. The following are just some of the more egregious elements within them.

The terms foreign lawyer and foreign law firm are used interchangeably in the rules, apart from when it comes to fees, which at $50,000 for a firm and $25,000 for an individual could represent a tasty income for the BCI. (By way of comparison, an Indian firm setting up in England and Wales to practise as a fully licensed English law firm with solicitors in the practice and able to undertake reserved work, would pay only between £1,200-£2,000, depending on their circumstances).

It is unclear from these rules why a law firm would choose to register as a firm rather than as an individual? Are multiple individuals from the same firm covered in that registration or does this registration sit in addition to individual registration? What if a foreign law firm sends its lawyers into India on a fly-in fly-out basis alongside a lawyer who is resident? Is the very restrictive 60-day fly-in fly-out limit for an individual or a firm?

If I were a foreign lawyer looking to practise in India, I would not be booking my passage any time soon

The scope of practice allowed to a foreign lawyer/law firm is fuzzy at best and there is no incentive for any foreign firm to employ or go into partnership with an Indian advocate since, under these rules, the latter are not allowed to provide even transactional advice on Indian law.

Anyone not deterred by the lack of clarity over what they register as, what they are able to do as a foreign lawyer/law firm or by the high price tag, will have to supply seven certificates, swear five oaths (nice work for the Indian notaries) and provide an interest free security deposit of $15,000 (for an individual) or $40,000 (for a foreign law firm). There is also the opposite of a ‘single window’ for registration, with four bodies potentially involved in registration, including the foreign lawyer’s home competent authority, the foreign lawyer’s home government, the Indian government and the BCI.

And, even if the persistent advance to that stage, they may yet be thwarted by the fact that under the rules the BCI may “limit the number of registration of Foreign Lawyers and/or Foreign Law Firm in order to maintain a balance or to ensure complete reciprocity or to protect the interest of Indian Law Firms/Indian Lawyers”.

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There are two conclusions to draw from this.

The first is that these rules illustrate very clearly the value of the World Trade Organization’s recently agreed Joint Initiative on Services Domestic Regulation, agreed by 67 WTO members at the WTO Ministerial in June 2022 (though sadly not by India). This agreement sets out very clearly the principles of good domestic regulation: transparency, legal certainty and predictability and regulatory quality and facilitation. The BCI‘s rules are, regrettably, a case study in what regulation that ignores those principles looks like.

The second is that it is now time for the Indian government to legislate. It is perfectly reasonable for India to wish to manage the access of foreign lawyers to its market, but the regime proposed is not going to work. As a sometime participant, now observer, of the tortuous journey towards opening the Indian legal market – and someone who admires many excellent Indian lawyers and law firms – I believe that the Indian government should now thank the BCI for doing the groundwork and legislate afresh, creating an entirely new independent regulatory regime that is better able to serve both the domestic market and the regulation of foreign lawyers.

If not, the proposed ‘liberalisation’ of the Indian legal market will mean more work for lawyers, both Indian and foreign, but only for the trade and regulatory practitioners, who are likely to be in the greatest demand as they attempt to make sense of these rules.

Alison Hook is co-founder and director of legal consultancy Hook Tangaza.

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