Foreign Lawyers in India: Globalisation of legal practice necessary for growth

One cannot ignore the fact that the entry of foreign law firms into the Indian legal market will make it highly competitive. (Representative image)

The Bar Council of India (BCI) has, through a notification dated March 10, 2023 allowed foreign lawyers and foreign law firms to practice foreign law in India on a reciprocity basis and has released ‘Bar Council of India Rules for registration of foreign lawyers and foreign law firms in India’. As per the said notification, foreign lawyers will now be permitted to practice foreign law in India, diverse international legal issues in non-litigious matters, and in international arbitration cases.

The BCI is of the view that this step would go a long way in boosting the growth of the legal profession in India as well as to the benefit of lawyers in India. It also feels that this step will help to address the concerns expressed about the flow of foreign direct investment in the country and making India a hub of international commercial arbitration.

Mandatory Registration

In order to practice foreign law in India, foreign lawyers and foreign law firms would need to get themselves registered with the BCI for which the council has laid down the rules which cover the procedure and relevant fees applicable for the registration. Such registration will be valid for a period of five years after which the concerned individual/ firm will have to get themselves re-registered in order to continue their practice in India.

In the interest of the Indian legal fraternity, the BCI has reserved an option to refuse any new registrations if it has reason to believe that the number of foreign lawyers and foreign law firms in India is likely to become disproportionate to the number of Indian lawyers or Indian law firms registered or allowed to practice law in the corresponding foreign country.

Barred From Appearing

The notification also clarifies that foreign lawyers and foreign law firms shall be allowed to practice transactional corporate work such as joint ventures, intellectual property matters, mergers and acquisitions, contract drafting, and other related matters on a reciprocal basis. However, foreign lawyers or foreign law firms are restricted from appearing before any courts, tribunals or other statutory or regulatory authorities. The notification also provides for disciplinary issues and penalties against foreign lawyers and law firms securing registration by misrepresentation, fraud, etc.

The requirement of getting a mandatory registration will not be applicable to practice done on a ‘fly in and fly out basis’ for the purpose of giving legal advice to clients in India regarding foreign law and diverse international legal issues. This is subject to conditions that such expertise and advice of such a foreign lawyer or foreign law firm had been procured by the client in a foreign country and the foreign lawyer or foreign law firm does not maintain an office in India for the purpose of such practice, and lastly, such practice in India for one or more periods does not, in aggregate, exceed 60 days in any period of 12 months.

The notification further explains that it is imperative for the Indian legal fraternity to rise to the occasion and adapt to the global changes in the legal arena. Given the pace at which international trade and commerce are growing at the global level, the demand for an open, responsive, and receptive legal professional dispensation mechanism in India from clients/public who operate in international and cross-country business is becoming intense day by day. Growth in the international legal work sphere and globalisation of legal practice and internationalisation of the law is increasingly becoming relevant to the growth of the legal profession and practices in India.

Market To Become Competitive

In my opinion, while foreign lawyers and law firms are not allowed to practice Indian law, they would be able to work on transactional corporate work as it does not require the application of Indian law, except for some limited provisions. However, their enforceability will have to be blessed by Indian lawyers/law firms as foreign lawyers and law firms are not allowed to practice Indian law.

Having said that, one cannot ignore the fact that the entry of foreign law firms into the Indian legal market will make it highly competitive and boutique law firms in India may have to tie up with foreign law firms in order to survive the sudden surge of competition and we may get to see aggressive competition in pricing as well. While this is all speculative at this point, I believe that while this appears to be a positive step for the Indian legal fraternity, one will have to wait and watch how things unfold in the days to come. Lastly, in cases where foreign laws intersect with Indian ones, BCI and other regulators may need to step in to clarify the extent of the interplay between foreign laws and Indian laws.

Siddharth Mody is Senior Partner, Desai & Diwanji. Views are personal, and do not represent the stand of this publication.