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Internationalization of Indian Legal Services Market
Introduction:
Indian market is growing and many multinational companies have opened offices in India in the recent past. Almost half of the fortune five hundred companies in India have opened their offices either or call centers. Indian companies are taking over companies abroad. With estimates of annual growth ranging between 7 and 9 percent, the economy India is one of the fastest growing in the world.
More importantly, the type of economic activity that foreign law firms is likely that makes a profit, such as large cross-border agreements, is growing even faster. A greater number of foreign customers in India are now involved transactions also, what these companies want to establish a stronghold in India, to better serve its customers.
The Bar Association of India has imposed restrictions the activities of foreign law firms in recent years have drastically reduced the participation of foreign law firms in the Indian market legal services.
India requires that any person wishing to practice law must register as a member of the Bar and if that person becomes an alien then it must belong to a country that allows national laws of India to exercise reciprocal in their country. FDI is not permitted in this sector, and international law firms are not allowed to open offices in India. foreign service providers can be hired as employees or consultants in local law firms, but can not sign legal documents, represent clients, or be appointed as members.
In 1994, two in New York and a law firm based in London had sought the permission of the Reserve Bank of India (RBI) to start the activities of a liaison office in India to advise and help customers Non-Indians in relation to its activities in India and outside India. The three law firms, White & Case (New York), Chadbourne & Parke (New York) and Ashurst Morris Crisp (UK) have been granted permission under the law regulating foreign exchange (FERA) to start the outreach. However, in 1995, Lawyers Collective, a public interest trust created by lawyers to provide legal aid, moved Bombay High Court challenging the right of foreign law firms to law "practice" in India. The High Court had held that the practices employed by these companies totaled the "practice of law" and therefore not allowed. Law firms have challenged this decision before the Supreme Court, which remanded the case to Court Superior to hear and decide.
Today there are about 38 'magic circle' firms with their liaison offices or reference relationships their Indian counterparts, while others engage in informal associations.
Regulations:
For the purpose of regulating the legal department and the practice of lawyers in the courts the legislature of India has enacted the Law on Lawyers which contains provisions for the supervision of the legal arena.
Section 24 of the Lawyers Law provides that only natural persons who are citizens of India can be registered as lawyers. This section also provides that, apart from the other provisions of the Act, a citizen of another country can be admitted as an attorney on a paper the State, whether citizens of India, duly qualified, are allowed to exercise the right in that other country.
Section 33 Law of Lawyers: Lawyers, the only competent practice: Unless otherwise provided in this Act or any other law for the time being in force, no person shall, on or after the appointed day, entitled to practice in any court or before any authority or person unless he is registered as a lawyer under this Act.
Section 47 of the Advocates Act subjects any foreign country which discriminates against the citizens of India in the field of legal practice, is not entitled to practice in India. Also empowers the Bar Council of India to establish conditions under which foreign nationals may be recognized for being registered as a lawyer.
Rule 2 of Chapter III, under Sec.49 (1) (h) of the Act reads as Advocates: An Advocate shall not enter into a partnership or any other arrangement for payment to share with anyone or legal professional who is not a lawyer.
Even if a foreigner is allowed to license the practice of law in India, you must obtain permission from RBI if want to buy foreign exchange and the powers of the same outside India under the section. And section 29. 30 of the Regulations of the Foreign Exchange Act, 1973. Although the Act Foreign exchange regulation has been repealed have similar provisions in the Foreign Exchange Management Act, 1999 which is the successor to the old law.
Section 11 of the Corporations Act provides that a partnership or any other form of association with more than 20 partners, if not registered as a company, will be a unauthorized assembly. Thus, the law firms of India can not have more than 20 partners.
Apart from all these obstacles in the legal community India is not too interested in allowing their foreign counterparts to mingle with them and is quite inflexible and dogmatic opposition to globalization six hundred crore the great legal services industry.
All these laws, legislation and hostility that the scope of the legal services of a difficult area step and also make the option virtually impregnable and very unattractive for foreign entities to set foot in the legal scenario in India.
Change is in the air:
But the winds of change have begun to blow and that too in the right direction. The Indian government has intended to liberalize its position on the legal market opening and is very interested in deciding to make a level playing field. There has been a change in policy government and the course of action. The government is in favor of allowing foreign law firms and lawyers to open offices in the country, but has provoked mixed reactions among the legal community. As for occupational demand, there is a shortage of legal experts to the tune of 22%, according to a FICCI report. The Government has shown interest in making Limited Liability Partnerships (LLP) a reality in India and has made efforts to have representation in place to govern it. This would allow foreign companies the right (as well as accounting firms) that the fasteners and associated offices in India and to enter into service in this way. The Bar is also considering requests to relax the restrictions on the advertising of the legal profession.
India is a signatory to the Agreement General Agreement on Trade in Services (GATS), which is an organ of the World Trade Organization (WTO), which aims to facilitate free movement of services across the world is required to open the services sector and Member States are also lawyers as one of the services is included in the GATS.
"Services" includes any service in any sector except services supplied in the exercise of governmental authority as defined in the GATS. "A service supplied in the exercise of governmental authority "is also defined as any service which is supplied on a commercial basis nor in competition with one or more services suppliers. Since India is a responsible country and a prominent founding member of the multilateral trading system should strive to fulfill its commitment to the WTO.
With all these trials and the development of enabling environment, the arrival of foreign law firms appears to be not far away. But before allow foreign law firms to operate in the Indian soil, there is a play there is little to be done to be an easy process for both parties.
Some restrictions incoming companies should be established which will undoubtedly have to be reasonable enough to give them a fair chance in the light of "equality of opportunity." Adequate safeguards and qualifications should be provided in addition to reciprocity. Before the opening of the legal profession, there is a need to introduce courses advanced-legal in the country. We have enough talent and try to beat anyone in the world. While the basic principles established by the International Bar Association, is ie equity, uniform and non-discriminatory treatment, clarity and transparency, professional responsibility, reality and flexibility are met, the entry of firms lawyers should not pose any problem.
Anything that improves the competition would be a positive development. But it will not be a cause and effect of long list due to the entry of foreign firms. Sooner or later the trend of liberalization is the restrictive mode of acquisition of the Indian market. An analysis detail the changing situation with regard to the entry of foreign companies the right has to be done in order to reach results as to what may be the benefits and how we will be affected by the prospect messenger.
The arguments in favor of the services market transparent and open legal are:
The first and foremost to be affected would be the indigenous law firms and lawyers. The impact immediately on Indian law firms would be greatly increased competition for work with foreign law firms. From the lawyer's point of view, working with firms international law and the opening of this sector in India would open up a range of opportunities for lawyers who want to learn, develop and advance their careers. Any resistance is due to a rash assumption of the threat of competition. Furthermore, to allow foreign private law firms in India will certainly help to lawyers for better job opportunities and break the monopoly of a few private law firms working in India.
Indian citizens also would be affected as the entry of foreign law firms are expected to increase the professionalism and quality of behavior in the legal profession. How to improve standards legal, the cost of legal services may rise, but can not increase significantly given the vast reservoir of legal practitioners in India. It may well be said the Bar Association of India is fully aware of the legal practices of the UN-salted and will be able to regulate against it. In general, citizens Indians and customers will benefit from the entry of foreign law firms which will be facilitated by a wider range of knowledge in the industry. They should also be allowed so that they bring with them a new brand of professionalism, competence and experience that the legal profession here has failed to develop on their own.
The customers of foreign companies, especially multinationals, which provide a substantially higher remuneration package than those offered in India and the opening of legal services would bring in foreign investment with them which in turn would be useful and support the overall growth of the economy. More to the point is that foreign law firms are ready to lend a hand in creating jobs in the legal framework of the market.
It will allow companies to outsource services pricing pressure average general consumption and for its own offices in India, instead of transferring the work to other local companies, so keep a curb on quality and customer service and improve communication and collaboration efficiency. Apart from the familiar foreign companies law "with global operations of foreign-owned companies, but also provide greater comfort for the staff of the headquarters of foreign companies and allow more flexible access to a variety of legal services providers.
Foreign law firms have tie-ups and associated offices in India with further work. Therefore, even if they have set up offices in India, which have liaison offices or departments that India effectively do the job. If we allow greater transparency and openness of the process of fact and law offices not only help eliminate ambiguity, but it will provide available everywhere and also define the concept prevalent.
Although the onset of foreign companies would come as a rude shock and the most lawyers to consider the profession as their birthright but showing the reduction in personal feuds in the area that is created by some of the companies of the association working family in feudal lines, lacking in professionalism and vision.
A significant number of Indian law graduates are being recruited or poached are either as partners or as apprentices, outside law firms leaders. For the past few years, law schools have attracted major the attention of foreign law firms in their campus recruiting programs. So the moral of the story is clearly written on the wall that if we do not allow foreign companies to cross the threshold that will rid the brightest of our graduates in law that nourish and make us victims of brain drain. This would the legal equivalent of engineering colleges in which part of the talent is hired by foreign companies
The reasons why the legal market India should not develop in the world are:
Opening up the Indian legal market is not only detrimental to the interests of the legal profession Indian liberalization but also has important implications for the nation. The legal profession is fundamental to the administration of justice. To allow foreign lawyers to interfere in this very important aspect of a democracy could be contrary to public interest. A symbiotic system of co-existence has been successful in meeting the needs of a customer has always been in place. This system has worked well for decades and there is no reason for not work in the future.
The effect of market expansion will be a shift by corporate customers in India for foreign law firms that offer services on a scale that Indian companies today can not match the law. Indian law firms providing services in commercial law can be expected are under strong competition, and perhaps even forced into bankruptcy. The fear is, then, that foreign law firms would ultimately eliminate its Indian competitors and create a situation similar to that which exists in the field of accounting.
There is a marked difference between the nature of the legal tradition in India and foreign companies, which are representative of a legal culture of the ambulance chasers. Globalization and liberalization of the legal field is resisted on the ground in India legal advice is a service to society and therefore there restrictions apply and advice.
The law firms argue that there are indigenous preparations for the attack in the form of competition from global companies and the proposal to open legal services sector is premature, since the law the Indian companies are at an early stage of development. Some companies also claim that allowing corporatisation will destroy the values of the local industry, becoming lawyers mercenaries.
There is no comparison between the judicial sector and other sectors. No country has opened the sector overnight. Japan took 20 years. Korea has been deliberating for more than 10 years. And Japan, Korea and China have other reasons for liberalization – language barriers, cultural differences and gaps involved. U.S. also has the most rigid rules on foreign firms. India, by contrast, is quite self-sufficient. Thus, India should not be so quickly tear open the market and give more careful thought.
Conclusion:
It is a question of balance of advantage. It is a common phenomenon in India, prior to liberalization of any sector, there is no opposition been widespread for example the insurance industry. The reason for this seems to be that company law remains more or less evenly across borders. The fact is that India is in the process of globalization of the economy. In the process, the legal market opening to competition of the international legal market is rather inevitable. Instead of deliberating on the advantages and disadvantages of the legal markets are opening up to foreign companies, perhaps more sensible to accept that the entry of foreign firms in India is only matter of time. This should be seen as an opportunity: for the law firms, competition, and for graduates, as a wider range of employment options.
Advocating protectionism is a parochial and myopic vision. Parish, and that liberalization is only off-shop for non-competitive entities, which are a burden on the economy. Shortsighted because the long-term benefits should be the driving consideration for policy makers. The liberalization of services involves quite painful short term adjustment costs, which requires that the institutional and regulatory environment to strengthen before hand. Once these are set up India's economy may have the advantage of the entire Asian market both to the inside to the outside of drawing and the provision of services of legal professionals. If India is held, there was a risk to "miss the boat" in a change that would give him access to legal and technical expertise needed to increase opportunities for local lawyers to do the job internationally.
The issue regarding the entry of foreign firms and lawyers in India requires in-depth discussions and should be carefully considered in consultation with the Bar Association of India (BCI), the Bar Association of All India (AIBA), the Supreme Court Bar Association (SCBA), the Bar Association of India (BAI), Society Indian Law Firms (Silf) and other bodies of law before a final decision. In light of the foregoing the following recommendations will be of great importance and help industry to go further.
• The Minister of Justice, the Attorney General's office, the BCI and some indigenous leaders from law firms and lawyers should form a committee and establish the rules for foreign lawyers practicing in India.
· The guidelines for advertising in law directories, maintenance web site, publication of prospectus companies should etc, more agile.
• The Act prescribes a limit of 20 members must be reviewed and the concept Limited liability partnership, adopted.
· Insurance professional negligence should be mandatory for all lawyers.
Reference and Bibliography:
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2. Law firms in search of the rise of India Michael. Peel and Joe Leahy. (Http: / / www.rediff.com/money/2008/jun/10india1.htm)
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About the Author
I am a student of fifth year pursuing my BBA LLB degree from Symbiosis Law School, Pune
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