LEVEL PLAYING FIELD?

There is a standard disclaimer of foreign law firms’ about their disinterest in litigation work. They maintain that their focus in India will remain on legal services with an international dimension. Such services may be consumed by Indian entities investing abroad and foreign entities investing in India. Company formation, foreign investment compliance, lease and purchase of premises, shareholding structures, shareholding agreements, business to business contracts, business to consumer contracts, employment law compliance, employment contracts, protection of intellectual property rights, acquisition advisory and investment dispute avoidance and resolution are some of the legal services that fall in this basket.

An Indian high net worth entity investing abroad is likely to lean on their advisors in India to source suppliers for overseas legal services. If a firm with multi-country presence has direct relationships with clients in India, the pre-eminent position of trust of an Indian jurisdiction expert and the client’s lack of prior experience with a foreign legal service provider will simply disappear and with this the opportunity of the Indian legal professional to have a finger in his clients’ international transactions will also vanish. Thus, for an Indian legal services provider, it is a business threat to let the foreign law firm have a physical presence in India and naturally, this is the business opportunity that foreign law firms are after. Perhaps, therefore, the pitch became shriller from the Indian professional leadership when the physical presence of the law firms in India became a real possibility. The physical presence of foreign law firms in India also threatens the opportunity for capacity development of the local legal services provider (to offer legal services with an international dimension), who is more likely than not a new player in the International arena. However, what the Indian legal professionals need to understand is that the opportunity available to them is not too great. With increased intensity of communications, and increased mobility of the work force, Indian entities are progressively likely to have direct knowledge of the foreign players. Also, foreign players are in any case better positioned to advertise themselves and to aggressively pitch themselves as better service providers. For instance, it has been reliably learnt that ONGC Videsh Limited, has a panel of about a dozen law firms for advising on its investments abroad, out of which only three are Indian firms. The business hardly goes to these firms due to a perception that Indian firms on the panel have a steep learning curve to climb, which makes their turnaround time higher. Thus, more than the protection to the market, what the Indian firms need is support in high quality capacity building and on-thejob professional training. This can best be had through collaborative arrangements secured through a stepped opening up of the Indian legal services market.

Legal services of the nature identified above will be needed by a foreign investor in India as well. Today, this need is met by Indian professionals, who take this opportunity to continue their relationship with these clients for future business in India. Again, with a physical presence of the foreign firms with all their branding might and brand recognition imported from overseas, Indian firms will not stand a chance of winning over these businesses. After all, how many of the Indian firms have made it to the Legal 500 of the world?

Predominantly, Indian legal profession still remains an individual-centered practice. The funding model is that of a pure profession. As against alternate business structures in the UK, where millions of GBP can be poured into developing a law practice, and similar amounts can be borrowed on commercial basis, in India, the best professional loan would be in the range of Rs. 10- 15 lacs. Can the government legitimately think of opening up the market with such a structural disbalance that will have only one result on the indigenous professionals?