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Are foreign law firms now allowed in India?

Context: In 2018,  the Supreme Court allowed foreign law firms and foreign lawyers to visit India on a temporary period for giving legal advice to their clients. The Bar Council of India (BCI), a statutory body governing legal practice in India, has framed Rules that allow them to open offices in India.

Supreme Court Ruling

• On March 13, 2018, a division bench of Justices A.K. Goel and U.U. Lalit had ruled that foreign law firms or foreign lawyers cannot practise law in the country either on the litigation or non-litigation side.
• However, the court said that there was no bar on foreign law firms or foreign lawyers visiting India for a temporary period for giving legal advice to their clients.
• The court had also asked the BCI to make appropriate rules in this regard.

What are the Rules?

• In the second week of March, the BCI notified the Rules for Registration and Regulation of Foreign Lawyers and Foreign Law Firms in India, 2022.
• This will enable foreign lawyers and law firms to practise foreign law, international law, international arbitration, joint ventures, mergers and acquisitions, intellectual property matters etc on a reciprocal basis.
• This would also help to address the concerns expressed about the flow of Foreign Direct Investment into the country and would help make India a hub for international commercial arbitration.
• Foreign lawyers and firms have to submit an undertaking that they shall not practise Indian law in any form or before any court of law, tribunal, board or any other authority legally entitled to record evidence on oath.
• The legal fraternity in India is not likely to suffer any disadvantage in case law practice in India is opened up to foreign lawyers in a restricted and regulated manner.
• This is mainly because the principle of reciprocity in the Rules ensures that it would be mutually beneficial for lawyers from India and abroad.

What powers does the BCI have?

• For foreign lawyers and firms to practise in India, a primary qualification is required in the form of a certificate by a competent authority of their country which states that they are entitled to practise law in that country.
• Their registration in India with the BCI is mandatory and must be renewed every five years.
• The BCI has the right to refuse to register any foreign lawyer or law firm if it is likely to become disproportionate to the number of Indian lawyers or law firms registered or allowed to practise law in the corresponding foreign country.

What are the implications?

• Experts state that Some clarity is required around what ‘reciprocity’ means before we see foreign law firms registering in India.
• If the foreign law firms do set up, it would be huge for the corporate legal practice in India as competition can only lead to improvement in legal services.
• Foreign law firms will now be allowed to hire Indian lawyers and advocates registered as foreign lawyers, expanding the legal job market.
• This move will definitely bring in AI (artificial intelligence) based technology into legal service delivery, pushing the Indian law firms to adopt.

Criticism

• However some express scepticism and feel this will lead to lawyers deserting the real need in India and add to the “corporatisation” of law practice.
• Already we find that students burdened with high fees of private colleges are turning away from litigation and joining corporate firms. We will see more Indian lawyers going abroad and deserting the real need in India — defending and fighting for the rights of the poor.