In India, the legal profession is regulated by the Advocates Act of 1961, which prohibits foreign law firms from practicing law or establishing offices here. Section 47 of the Act mentions reciprocity to allow the same. This legislation, on the pattern of most other countries, was enacted to protect the domestic legal industry and ensure that only Indian lawyers were able to practice law in the country. BCI acts as the regulator. 1
However, it was in march last year when the Bar Council of India (BCI) issued a notification opened the doors for foreign law firms and lawyers in India, to open offices and practice with restrictions, in non-litigious matters and international arbitration, on the principle of reciprocity.2
But, a little more than a year after the Bar Council of India (BCI) decided to allow entry of foreign law firms into the country, the scorecard is stuck at just one. Link Legal announced a “combination” with one of the world’s largest global law firms – Dentons – in May last year. But the collaboration is a mere “hand-shake” or at most a co-branding exercise and does not herald an actual “entry” in the real sense of the term, legal experts say. 3
In the last few years, each top legal firm has studied the Indian market, drawn up an entry strategy and recalibrated their expectations. That with India becoming a $3.8 trillion economy and increasingly connected to the global economy, it's no longer a question of "if" but "when", so the government has to start acting quickly now.
Most of the global (Law) firms still remain in a wait-and-watch mode, seeking clarity due to India’s history of policy flip-flops, tax and regulatory complexity.
I've been in talks with the several local lawyers about the issue and their remarks on global lw firms entering to India are quite obvious.
Even if regulatory hurdles are cleared by the government, it will be difficult for foreign law firms to navigate other aspects of practicing in India. 4
Yes, ours is a unique legal system with a mix of common law and statutory law. Apart from that, understanding and navigating cultural nuances can be challenging for foreign firms. Many clients in India are not used to discussing fees very upfront and they tend to roll over fees or club it with multiple works that firms do. Now, several Indian entities of MNCs have also learnt that, but can foreign law firms do that when they have to stick to stringent global processes?
The global legal services market size was valued at around $1 trillion in 2021 and is expected to grow with a CAGR of 5.3 per cent. In India also it is estimated to be a multi-billion-dollar industry, with over a million lawyers. 1
While India is inching closer and closer towards globalisation of its economy. The legal sector is yet to open doors for the global giants in Law. Many Indian lawyers raise concerns about opportunities being cut due to putting immature Indian law industry in front of well organised global law firms. But there are many local lawyers who argue that it will boost employment and education in while also addressing the current problems of Law industry in India.
I know most of the Stackers are not from India but the big law firms that are trying to enter world's fourth largest economy have their headquarters in your countries. Here I seek your views on how do these law firms view Indian market and how would they impact law industry in India?
Thanks for reading
Sats for all...