Allowing Foreign Lawyers in India: BCI Draft Rules

Under the instructions of the Ministry of Law and Justice, the Bar Council of India (BCI) has come up with Bar Council of India Rules for Registration and Regulation of Foreign Lawyers. The rules will make way for the foreign lawyers and law firms to set up their offices and practice non-Indian law in India. So far foreign lawyers are not allowed to work in India. Advocates Act, 1961 allows only Indian nationals to practice law in India. The newly drafted rules were discussed in a meeting called by the law ministry which was attended by four ministries namely, Ministry of External Affairs (MEA), Ministry of Home Affairs (MHA), Ministry of Finance and the Ministry of Commerce and Industry. Apart from them representatives from three organizations like Society of Indian Law Firms (SILF), Indian Corporate Counsel Association (ICCA) and the Federation of Indian Chambers of Commerce and Industry (FICCI) also participated in the meeting.

Highlights of the New Rules

Some of the major highlights of the new rules are:

• Foreign lawyers and law firms will be allowed to set up their offices in India and practice non-Indian law upon getting registered with the Bar Council of India (BCI). The registrations will be valid for a term of 5 years.
• Foreign lawyers will be allowed to do all non-Indian law transactional legal work. The foreign lawyers will be deemed as an advocate under several sections (section 29, 30, 33) of the Advocates Act.
• Foreign lawyers will not be allowed to do litigation works or appear before Indian courts and tribunals. They cannot also provide any legal advice relating to Indian courts, tribunals, statutory authorities etc.
• Foreign lawyers will be able to participate in the international arbitrations held in India.
• Foreign lawyers can hire Indian lawyers and enter into partnership with Indian lawyers.
• The rules requires the foreign lawyers to pay registration fee of:
  • $25,000 for individuals
  • $50,000 for partnership firms
  • $10,000 renewal fee for individuals
  • $20,000 renewal fee for partnership firms
• Registration of foreign lawyers would be done on the basis of reciprocity (provision of equal entry opportunity for Indian lawyers in the foreign country).
• Foreign lawyers are also required to deposit a security guarantee which is returnable for foreign law practice in India.
• To practice, foreign lawyers will need certificate from the home ministry as well as from foreign bar council equivalent bodies.
• Foreign lawyers will be governed by the same disciplinary and ethical obligations as that of their Indian counterparts.

Rationale

The union government is very serious about bringing liberalisation in legal affairs. Moreover, India being a signatory to WTO, it is bound by the General Agreement through Trade in Service (GATS) obligations to push for legal liberalisation. The World Trade Organization has provided for the opening up of legal services through GATS in several countries. It is applicable to the following areas:

• Legal and representation services,
• Legal documentation and certification services,
• Arbitrations and conciliation services, and
• Other forms of legal and advisory information services.

So, being a signatory India has to make a commitment towards allowing foreign legal consultants to practice in India.

Secondly, with advancing international trade and commerce especially in post 1990s requires the country to keep abreast with the global phenomenon. Globalisation of business and increase in internationally oriented legal services requires the legal profession in India to rise to the occasion to meet the international challenges and provide high quality legal services for the international business community.

Thirdly, India is home to second largest number of lawyers in the world after the US. At present, Indian legal profession is not responsive to the process of globalisation and Indian lawyers do not have enough training to deal with complex legal issues of international trade, cross border taxation etc. With the liberalisation of legal profession, there is a potential for India to become one of the legal centers of the world.

Lastly, in the era of globalisation, Indian companies and persons of Indian origin may carry out transaction with foreign companies. In such cases, they may have to deal with laws of that foreign country. The presence of foreign law firms and foreign lawyers in the country would be handy for them. They need not fly in foreign lawyers to advice them which will add to their expenses.

Expected Outcomes

• It will ensure ease of doing business in India.
• Consumers who operate in international business and trade would stand benefitted.
• Indian lawyers can find new work opportunities in multinational law firms.
• The competence of the Indian lawyers will get increased as they will be able to practice in international law and participate in the global legal marketplace.

Criticisms and way forward

The rules are unclear and ambiguous. It is not clear whether Indian firms would be able to set up offices overseas and hire foreign lawyers. The registration fees demanded for registration with BCI seems to be very high and is likely to discourage foreign lawyers to register. Moreover, hiring of international lawyers by the Indian firms would also become expensive.

To meet up with the challenges of international legal practice Indian lawyers and law students should be equipped with appropriate skills and knowledge. The present level of training and knowledge is unenviable. For this, the BCI in collaboration with reputed law schools should frame curriculum covering multiple areas of jurisdictional practice like Maritime law, Intellectual property rights, international commercial arbitration, Merger & Acquisition etc. In addition, the young law graduated need to be equipped with contract drafting and revising, litigation support, Para legal and research work to make the competent to explore business opportunities in Legal Process Outsourcing (LPO) industry.

BCI should also initiate reforms in the working of the Indian Bar Council. The standards and norms have to be redrafted to match the professional ethics at par with international standards. It should actively check the professional misconduct in the light of market-based economy and promote continuing legal education among practicing lawyers. It should try to emulate the best practices from other bar councils in the world.

Conclusion

Liberalisation of legal services should be immediately carried out in light of growing trans-national business opportunities. But at the same time, ensuring recognition and reciprocity of professional entry for Indian lawyers in foreign countries is also equally important.