For a very long-time, a debate has been going on within the legal fraternity as to whether the Government of India and the Bar Council of India should allow Foreign Nationals/Law Firms to practice in India. In the past, there have been various litigations before the High Courts at Madras and Bombay. One important case being that of Lawyers Collective v Bar Council of India & Others, (2010) 2 Mah Lj 726, where the Hon’ble Bombay High Court considered the legality of licenses granted by the Reserve Bank of India (RBI) to three law firms – Ashurst, White & Case and Chadbourne & Parke – in the mid ‘90s. RBI had granted licenses to these firms under section 29 of the Foreign Exchange Regulation Act, 1973, allowing them to establish liaison offices in India. The petitioners i.e. the Lawyers Collective opposed the same contending that the practice of law was governed by the Advocates Act of 1961. In the said matter, ultimately it was decided that the permission given by the Reserve Bank of India for opening of the Liaisoning office was in contradiction of the Advocates Act, 1961 and as such permission to open the Liaisoning offices was wrong and illegal. It was held that foreign law firms can set up offices in India, only if, all of their lawyers are admitted to the Indian state bars and are enrolled under the Advocates Act, 1961.

It is however, interesting to note that several major firms, including Linklaters, Allen & Overy (A&O), and Clifford Chance (CC) have got around the ban by striking alliances with Indian firms under which they refer business to each other. They seem to follow the “best friend” relationship with the Indian law firms where they refer work for each other rather than operating directly. The above judgment is silent on this aspect.

Additionally, we all know that the foreign law firms are also advising their clients in India whether be it on International Law or Indian Law and such practice is commonly known as ‘Fly-in and Fly-out’.

We in India, in particular within the legal fraternity, love to have a globalized economy in India and desire to have multinational clients. However, we fail to understand that in today’s economic market condition and taking into account the policies of the present government, the Indian law firms may not have the necessary exposure, expertise and infrastructure to give the same level of legal services as provided by the Foreign Law Firms. I fail to understand that when the Indian human resource, which is one of the most competitive human resource i.e. – having one of the highest levels of Intelligence Quotient and is capable and has the capacity to compete with any international man-force, why are we acting so protective when it comes to opening of the legal industry to Foreign Law Firms. Let there be no doubt that today it is the need of the hour that the law firms must have the best standard infrastructure supported by Information Technology. Receiving competition from Foreign Law Firms is healthy and in fact, will give an opportunity to Indian Law Firms to understand and develop infrastructure as per international standards. That any Foreign Law Firm, if allowed to come into India, will not be able to perform without the services of Indian lawyers who are accustomed with the Indian environment.

The Government of India in the last one year or so has taken very pro-active steps with the object of allowing Foreign National/Law Firms to come to India, which will no doubt support the ‘Make in India’ policy of the Government.

On 24th June 2016, the Ministry of Law and Justice has circulated draft Bar Council of India Rules for registration and regulation of foreign lawyers/law firms in India under the provisions of Advocates Act, 1961. It is unfortunate that till date the draft rules have not seen any progress and no doubt that any progress, if, made cannot be fructified without necessary amendments to the Advocates Act, 1961. Hence it is a catch 22 situation.

The Law Commission submitted its 266th Law Report in respect of reform in the legal sector and necessary amendments to the Advocates Act, 1961 are suggested and contained therein. The Report was published on 9th March 2017. The crux of the Report is it contains proposals to amend the definition of the term “Advocate” by recognizing Foreign Nationals registered in any country, which is recognized by the Bar Council of India and also the definition of the term ‘Law Firm’by recognizing Limited Liability Partnership. The proposal further contains provision for registration of Law Firms either by Bar Council of India and respective State Bar Council. The limitation that has been proposed is the concept of reciprocity i.e. that the Bar Council of India must recognize the country where the foreign lawyers are registered. However, unfortunately, till date no bill has been drafted by the Ministry of Law, seeking to amend the Advocates Act, 1961.

It appears that the Bar Council of India has stringent reservations on the proposed amendment to the Advocates Act, 1961. Despite this, the Government of India has in fact bypassed such reservations and has on 06.01.2017,issued a Notification under provisions of Special Economic Zones Act, 2005 amending Rule 76 of the Special Economic Rules, 2006, allowing Foreign Law Firms to advise Clients on Special Economic Zone in India. It will be surprising to note that the Notification has been put in practice, without making necessary amendments to the Advocates Act, 1961

I hope that in near future necessary amendments to the Advocates Act, 1961 is done allowing foreign lawyers/law firms to practice in India, with legitimate limitations, amongst others, no right to advocacy etc.