Foreign law firms: SILF tells BCI that Rules can lead to loss of livelihood for Indian lawyers [Read Representation]

Following up on its earlier resolution, the Society of Indian Law Firms (SILF) on Friday sent a representation to the Bar Council of India (BCI) highlighting its concerns with the opening up of the Indian legal market..While SILF makes it clear that it welcomes the move to allow foreign lawyers and firms to practice in India, it raises issues regarding the timing of this step and how it will be implemented..Through its President Lalit Bhasin and Associate President Jyoti Sagar, SILF has felt it necessary to lay out a "blueprint of the future of the Indian legal profession.".Below are the flaws it has pointed out in the Bar Council of India Rules for Registration and Regulation of Foreign Lawyers and Foreign Law Firms in India, 2022 notified this month..1. Rules are not in conformity with AK Balaji judgment of Supreme Court.In that case, the Supreme Court had held that only advocates enrolled with a State Bar Council could practice law - Indian or foreign - in India. SILF claims that the Advocates Act must be amended to enable practice of law by foreign lawyers. Failing this, the new BCI Rules will be open to challenge before the courts..2. Opening up of legal market should not be done in ad hoc manner.SILF has pointed out that through deliberations over the years, a consensus was reached that the Indian legal market should be opened up in a phased manner. The first step of this phased liberalisation should be reforms in the legal services sector."A three-phased sequential approach to the opening up of the Indian legal system must start with regulatory reform of the Indian profession which continues to be governed by centuries-old traditions while the world has moved on. It is imperative to create a level playing field for Indian lawyers by the time foreign lawyers are allowed in the next phase. Unfortunately, domestic reforms have remained unattended for a long time and have not been addressed with the same alacrity as the Rules," it stated.Reference is made to the liberalisation of legal markets in China, Singapore, Japan and Korea, "carefully articulated programs of opening up" have been implemented, in most cases, over decades..How foreign law firms are reacting to the opening up of the Indian legal market.3. Rules discriminate between Indian lawyers/firms and foreign lawyers/firms.SILF has highlighted examples of how the Rules are discriminatory. For one, while Indian lawyers are still governed by the Advocates Act and other Rules framed by BCI, foreign lawyers and firms are governed by their home country's rules. This is contrary to the BCI's stand over the years, as well as the Supreme Court ruling in AK Balaji."The profession rules in India have remained stagnant in a changing world - for example, they do not recognize the concept of a law firm; do not permit Indian lawyers to form limited liablity partnerships; do not permit any form of marketing; do not permit innovative fee structures (such as contingency fees, success fees)..."On the other hand, the Rules do not bar foreign lawyers and even companies and corporations from practicing in India, SILF says. Foreign lawyers and firms, not being bound by Indian professional standards, can undertake marketing, enter into fee arrangments and more, it added. Further, the Society has raised concern over the fact that BCI has ceded disciplinary authority over foreign lawyers and firms..4. Rules are deficient in understanding and implementation of reciprocity.SILF laments the lack of clarity on how reciprocity will be established in the case of a foreign firm with offices in multiple jurisdictions around the world."While a foreign government or competent authority may acknowlege reciprocity, other discriminatory practices like immigration rules and work permits can make a mockery of reciprocity. Free movement of professionals across borders, on an equal basis, is necessary to establish "real and meaningful" reciprocity.".5. Rules are silent on eligibility criteria for registration of foreign lawyers/firms.SILF further points out that under the Rules, credentials of foreign lawyers and firms who will be allowed to work in India are left self-declared. There is no scrutiny regarding national security, foreign firms that undertake multi-disciplinary practice including law, such as large accounting firms, would be entitled to practice under the Rules. Further, there is no regulation on their relationship with Indian professionals."Thus, exposure to surrogate practices where foreign lawyers and foreign firms could control Indian lawyers and Indian law firms and thereby practice Indian law - that is doing indirectly what can't be done directly."As a result, the Indian legal fraternity will suffer grave prejudice, harm and loss of livelihood, SILF claims..SILF in its representation also highlighted the importance of global cooperation among legal fraternities. It says that while it welcomes overseas colleagues to practice in India, regulatory reform must first take place to create a level playing field..In view of these concerns, SILF has made the following requests to the BCI:Commence consultation with SILF and other stakeholders of Indian legal fraternity on Phase I reforms (domestic reforms) before foreign lawyers and firms are allowed to practice in India; Repeal/suspend Rules pending consultation Implement Phase I domestic reforms in time-bound manner Reject/keep in abeyance any applications received from foreign lawyers and firms seeking registration in India..Read SILF Representation