The Business Standard: India opening legal service to UK lawyers: Introspecting a roadmap for 2030
Mukesh Butani & Tarun Jain
Extensive stakeholder consultation and pragmatic measures to assuage the concern of Indian lawyers are necessary before changes are affected
Amid the pandemic gloom, a news to cheer is the ‘comprehensive strategic partnership’ recently announced by India and the United Kingdom along with a 2030 Roadmap replete with milestones to be attained in the future. The relationship being reciprocal, barriers to market access are expected to be diluted by both the countries in the agreed areas of collaboration. Markedly, India appears to have committed “to work to remove barriers in the Indian legal services sector preventing UK lawyers from practising international and foreign law in India, a step that could enhance UK’s legal service exports to India and imports from India”. 1 Though there appears to be no specific mention of such a commitment in India’s official communique, the ramifications are far and wide for the Indian legal services. The issue needs to be viewed from a prism of wide-ranging perspective, legal talent pool, ability to offer seamless cross-border services to large clients and the regulatory framework in India etc.
Liberal economists bat for increased competition as a means to achieve seamless access to services. Indeed, in perfect equilibrium, advantages of competition cannot be overstated. However, here the question to be pondered over is its positioning and latitude of adjustment available to the Indian legal fraternity for meeting foreign competition. Given the dynamics at play, it is possible that the first stage of opening may be to look at avenues where competition is limited. This may suit the circumstances given that foreign lawyers, notably the English law firms are desirous of an Indian presence, in areas such as international arbitration and select cross-border advisory and not litigation in Indian Courts or mandates which do not involve multi-jurisdiction issues. Such modelling would shield the bulk of the lawyers who practice before the Indian courts and tribunals. Simultaneously, it translates opportunities for Indian lawyers (particularly the younger lot) who engage in transactional advisory, M&A and related fields as they can work more closely or even directly with foreign law firms. This will incredibly add to the talent pool with opportunities for honing divergent competencies, especially in the area of public international law and cross-border deals. The issues relating to opening, however, are more emotive than rationale-driven. Thus, extensive stakeholder consultation and pragmatic measures to assuage the concern of Indian lawyers are necessary before changes are affected, lest the system witness the ire of the professionals. Past attempts on opening up have ended with foreign law firms being less confident about India’s desire to lay out a roadmap for opening up the legal services market. The question of reciprocity (i.e., market access to Indian lawyers in UK), which has often been contentious, is another thorny issue which must be addressed by the Indian negotiations.
From a client-service perspective and fee-proposition standpoint, given the maturity and sophistication of UK’s legal services market, it is inevitable that the universe of clients available to the foreign lawyers would be extensively limited to a marque corporations and high-net-worth individuals. It is notable to observe that the UK declaration currently envisages the UK lawyers only “practising international and foreign law in India”. Thus, a question arises whether the presence of UK lawyers makes any difference to all and sundry Indian clients. At this stage, the answer appears to be in the negative and thus, tersely put, the proposed cooperation is limited to bringing the foreign lawyers physically closers to their Indian clients. Both sides should not lose sight of the principle that liberalisation of legal services is not the end but a process. Thus, even if the current proposal does not reap immediate advantages, for large Indian clients, it is bound to result in synergies in the long-run. At any rate, the cultural affinity which a typical client looks in one’s lawyer, would remain a relevant factor in the discourse and continue to pose challenges in the opening of the Indian legal market.
The regulatory standpoint poses another challenge. The current legal position, affirmed by the Supreme Court itself, does not permit unlicensed lawyers to practice Indian law where a precondition for the licence is knowledge of Indian law and a bar exam. Thus, one may argue that no regulatory change is required given that the activities of the foreign lawyers would be limited to practicing only ‘international and foreign law in India’. Even if this proposition were to be accepted, the spirit underlying the regulatory will nonetheless continue to pose a challenge, particularly owing to the obiter of the Supreme Court which permits limited fly-in-fly-out activities of foreign lawyers in India.
Concerns apart, pragmatism dictates a change. It is noticeable that Indian leaders of the bar are now active members of the British legal system. Senior Advocates like Harish Salve, Gopal Subramaniam and many others have full-fledged working relationships in UK. Given that the British announcement specifically recognises “UK legal services imports from India”, the entry of foreign lawyers in India will open more doors for the talented and ambitious Indian lawyers to pursue their ambition through such reciprocal arrangements. If the past were to be a guide, other than inhibition from competition, there appears to be no cause for concern given that the dynamic nature of Indian professionals leading global institutions. There is no reason why the global legal giants would be any different for Indian lawyers to traverse and conquer.
1. Prime Minister announces £1 billion of new UK-India trade (UK Government Press Release, May 4, 2021).
(Authors are partners, BMR Legal. Views are personal)
Mukesh Butani is Founder & Managing Partner of BMR Legal Advocates, a boutique law firm specializing in the areas of Corporate International Tax, Transfer Pricing, GST, Customs & Trade, with expertise in litigation services, controversy management, strategic transaction advisory and policy. With specialization in domestic corporate international tax and transfer pricing, he has over three decades of experience in advising multinationals and Indian conglomerates on wide range of matters relating to FDI policy, business re-organizations, cross-border tax structuring, tax controversy and regulatory policy. He is an acknowledged expert in the area of International Tax policy, controversy & advocacy, and has to his credit several landmark judicial pronouncements. He has deposed as Expert Witness on contentious cross-border tax treaty & TP matters in foreign jurisdictions. Mukesh is a qualified Chartered Accountant and holds bachelor's degree in Commerce and Law, and practices as an Advocate before various Tribunals, High Courts and the Supreme Court of India.