NOTE ON PHASED SEQUENTIAL APPROACH

Legal Profession in India is different and distinct from the profession

practiced elsewhere in the world. It is more litigation oriented as is evident
from the fact that out of nearly 1.2 million lawyers in India (largest in the
world) more than 1 million are litigation lawyers practicing mainly in the
District Courts all over India. It is unlikely that these lawyers would be
adversely affected if foreign lawyers are allowed entry into India.
Those who are likely to be affected are the transactional / corporate lawyers
and the law firms. Indian law firms are now much better equipped to face the
challenge from foreign law firms than these were about 20 years ago when
this issue was raised by Law Society of England and Wales with Government
of India which had always been sympathetic to the entry of foreign law firms.
Society of Indian Law firms (SILF), the Bar Association of India supported the
Bar Council of India in its vigorous opposition to entry of foreign lawyers.
Since then India Legal Profession has grown in stature, competence,
knowledge technology, efficiency and speed. Last 20 years have seen growth
of law firms in Mumbai, Delhi, Bangalore, Chennai, Hyderabad, Ahmedabad,
Kolkata, etc. These law firms are second to none in the world in terms of
competence. Accordingly these are much better placed to face the entry of
foreign law firms although in a phased manner and that also subject to the
approval of the regulatory body namely the Bar Council of India.
We suggest a Phased Sequential Approach for entry of foreign legal
consultants / law firms into India.
Phase I reforming the environment for domestic firms
o

Removal of difficulties in the LLP format

Bar Council of India (BCI) Clarification that practice of law in LLP format

.
is
permissible
.
Income Tax Clarification

conversion of partnership firm to a LLP is not a taxable event;

changes entry and exit of partners post conversion permitted;

and

change in assets and liabilities post conversion permitted;

o
BCI Rules to be amended to permit
.
Firm brochures;
.
Web sites;

.
Directory listings;
.
Sponsorship of events; and
.
Other means of market development and information dissemination of
firm
information;
o
Ceasing of all surrogate practice of Indian law in India by foreign law
firms through various devices and structures;
o
Ceasing of practice of Indian law outside of India by foreign lawyers
and foreign firms [websites of several leading foreign firms unabashedly
claim India practice conducted from the overseas offices]; and
o
Any other changes that emerge in consultation with the profession and
its
professional body the BCI.

Phase II after completion of Phase I, foreign lawyers and

foreign law firms may be permitted to have presence in India
subject to conditions including the following
o

Qualification criteria to be prescribed;

Permitted to practice their home country law only;

Prohibited from practicing, directly or indirectly, law of India, both:

contentious; and

non-contentious;

o
No surrogate practice of law of India through controlled, dependent,
under
influence (Indian) firms or lawyers; Relationship with the local profession to
be
strictly controlled such that surrogacy and indirect practice of Indian law is
prevented. [This is a critical point as experience suggests that without
proper
monitoring foreign law firms have violated local law practice prohibition
with
impunity in many jurisdictions];
o

Subject to disciplinary jurisdiction of the BCI;

o
Confirmation from the concerned Foreign Bar Council that any decision
of the BCI in disciplinary proceedings will be honoured by such Foreign Bar
Council;
o

Compliance with tax and immigration laws of India; and

o
Reciprocity ability of Indian lawyers to practice in the foreign
jurisdiction on similar terms and conditions.

After an agreed period of operation of Phase II, a minimum of seven

years, a review of the activities undertaken by the foreign firms/lawyers in
India in accordance with Phase II conditions, status of Indian legal market,
and assessment of readiness of Indian law firms (all stakeholders Bar
Council of India, Ministry of Law, Ministry of Commerce & Industry, and
Indian law firms and lawyers will be represented in such a review).


Phase III to be approached after the above review has been
undertaken and it is considered appropriate to enter Phase III. In
this phase foreign law firms/lawyers to be permitted to undertake
practice in certain areas of law of India. subject to the following
o
Directly or in joint venture with Indian firms (BCI Rules to be amended
then to
provide for such arrangements) ;
o
Number of foreign law firms to be licensed for direct and joint venture
participation, to be limited in the beginning and thereafter a gradual increase
in number of foreign firms so licensed;
o
Number of foreign lawyers in all (including those in the permitted
foreign firms and joint ventures) to be limited in the beginning and thereafter
a gradual increase of
foreign lawyers so licensed.
o
Qualifications of such foreign law firms and foreign lawyers to be
established fit
and proper test;
o
Practice to be allowed only in defined areas of Indian law;
o
No permission to undertake litigation or regulatory work at any level;
o
No surrogate practice of law of India through controlled, dependent,
under
influence (Indian) firms or lawyers in India; Relationship with the local
profession to
be strictly controlled such that surrogacy and indirect practice of Indian law
is prevented;
o
Subject to disciplinary jurisdiction of the BCI;
o
Confirmation from the concerned Foreign Bar Council that any decision
of the BCI in disciplinary proceedings will be honoured by such Foreign Bar
Council;
o
Compliance with tax and immigration laws of India; and
o
Reciprocity ability of Indian lawyers to practice in the foreign
jurisdiction on similar terms and conditions