Salman’s advance tuition from supreme court

Supreme court rules no-entry to foreign law firms into India


Manoj Kumar | July 6, 2012

The supreme court has pulled the plug on any direct or indirect practice of law by foreign law firms in India vide in an order dated 4th July 2012. The apex court has directed that the Reserve Bank of India (RBI) shall not grant any permission to foreign law firms to open any liaison offices in India.

The supreme court also clarified that the expression “to practise the profession of law” under the Advocates Act, 1961 covers both litigation as well as non-litigation practice. There even the practice of non-litigation matters by foreign law firms in India, by whatever name called, has to be in compliance with the provisions of Advocates Act, 1961.

It is pertinent to note that the Advocates Act, 1961 only allows persons licensed by the Bar Councils to practice the profession of law in India, which the foreign law firms are not able to comply with.

Law firms globally have been working overtime for almost a decade now to be able to practice law in India. Many of the United Kingdom’s major law firms have been pushing for access to practice law in India through the UK India Business Council (UKIBC), a body created in 2007 with a mandate to increase bilateral trade and investment between India and the UK.

What could be driving such a mad rush by foreign law firms to practise law in India?

As per some earlier reports, the aggregate revenues of domestic law firms is purportedly more than $350m (about Rs 1800 crore), with turnovers of individual law firms ranging between $500,000 (about Rs 3 crore) to $40m (about Rs 200 crore). Looking at the way forward, this is expected to be only the tip of the ice-berg.

Perceiving the possibility of the law profession in India being looked upon merely as a pot of gold and the possible consequential commercialisation of the law profession in India at the hands of foreign law firms, the Bar Council of India (BCI) has categorically opposed entry of foreign law firm repeatedly.

BCI has repeatedly reiterated that the Indian legal profession is both service-oriented as well as based on business principles and hence it was important to understand the legal profession in the Indian context.

The Society of Indian Law Firms (SILF) headed by senior lawyer Lalit Bhasin has continuously joined issues on the subject to oppose entry of foreign law firms into India unless a framework (i) addressing the concerns of Indian Law Firms and lawyers, and (ii) acceptable to the Indian legal fraternity is first put into place.

Interestingly, when law minister Salman Khurshid, a noted legal eagle himself, proposed to enact the Legal Practitioners (Regulation & Maintenance of Standards in Professions, Protecting the Interest of Clients and Promoting the Rule of Law) Bill, 2010, some time ago – it looked merely silly on his part to have lost sight of the essence & relevance of the provisions of the Advocates Act, 1961 & the Bar Council of India.

Is the Bill intended to be a plan B for making way to foreign law firms to practice law in India in the midst of multiple judgments on the issue by Madras & Mumbai High Courts – by licensing them to practice law directly by the law ministry through the parallel body proposed to be created under the Bill.

The supreme court ruling bears me out on my own humble submission made on this website (read here) regarding the scope and ambit of the Advocates Act, 1961 and the consequential illegalities of the Bill.

Needless to say, the apex court’s ruling is a major setback to the foreign law firms already operating in India under the guise of liaison offices or similar set-ups.

The challenge now lies at the doorstep of the Government of India’s law ministry to implement the order of the supreme court in letter, spirit and intent and to take all actions necessary to prevent foreign law firms from practising law in India by any name or any other surrogate arrangements.

To start, Khurshid should take the order of the supreme court as an advance tutorial on the scope and ambit of the Advocates Act, 1961 and immediately withdraw the Bill which is fraught with illegalities apart from being contrary to the provisions of the Advocates Act, 1961.

Thereafter, the task is cut out for the law ministry with all Indian stakeholders like BCI, SILF and numerous law firms standing by its side to prevent entry of any foreign law firms in India.



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