Legal export: Someone like Alan Shore (centre) of the US TV series Boston Legal may not be allowed into an Indian courtroom anytime soon

When a law firm was set up by a Nigerian in Delhi in November last year, the Indian legal community was up in arms. So irked were the lawyers that one of them even registered an FIR against the Nigerian. In the 1990s too Indian lawyers were instrumental in shutting the liaison offices of three foreign law firms. Well, things have not changed much since then. When the Prime Minister, Dr Manmohan Singh, spoke in favour of a more open legal sector at a recent meeting in Delhi, the debate over the entry of foreign law firms in the country was revived once again.

While the Bar Council of India (BCI), the apex body for lawyers, is completely opposed to the move, other forums such as the Society of Indian Law Firms (SILF) have urged the Indian government to first bridge the gaps in the Indian legal system before opening the sector to foreign competition. Under the existing rules of the BCI, foreign lawyers or foreign law firms are not allowed to practise in India.

According to Lalit Bhasin, president of the SILF and honourary secretary general of the Bar Association of India, Indian lawyers do not have a level playing field. Agrees Pallavi S. Shroff, partner, Amarchand Mangaldas, “We need to understand the problems faced by law firms and lawyers in India before opening the legal sector to foreigners.”

One of the main grouses of these lawyers is an archaic rule that prevents them from setting up websites and listing themselves in international law directories. According to the Advocates Act, lawyers cannot solicit business and therefore cannot advertise themselves. Further, the Indian Partnership Act allows only 20 partners in an Indian firm. “If these rules are not amended, we will be no match for the foreign firms with their financial clout, extensive websites and unlimited number of partners,” points out Bhasin.

Lawyers have also been rallying for a reciprocal arrangement in foreign countries if their lawyers are allowed to practise in India. They also urge a gradual opening of the legal sector so as to give the domestic industry enough time to get its act together. Shroff cites the example of Japan that opened its legal system gradually to foreign lawyers. “Opening legal services in India should be a gradual and calibrated process. The government should make its policy clear. To start with, they should allow only a few foreign firms to operate in India,” concurs A. Jayagovind, vice chancellor, National Law School of India University, Bangalore.

Other countries that have allowed the entry of foreign lawyers have also followed a restrictive policy. For example, the Chinese judicial departments have taken measures to regulate the services of foreign law firms in China and to encourage Chinese law firms to compete internationally. Again, in the United Arab Emirates, foreign firms need local partners to exist. D.V. Subba Rao, former chairman of the Bar Council of India, suggests that the Indian government too should follow a regulatory mechanism that brings foreign firms under the disciplinary jurisdiction of Indian courts. “They should not be allowed to appear in court in contentious litigations and should not be allowed to practise Indian law.”

Interestingly, this debate has been revived at a time when legal outsourcing in India is also experiencing a boom. According to research conducted by the Gurgaon-based knowledge process outsourcing company Evalueserve Inc, currently 1,750 professionals are engaged in legal process outsourcing (LPO) in India. This figure is supposed to touch 7,000 by 2010 and 22,000 by 2015. Research also shows that Indian companies that provide such services will generate about $960 million in 2015, which will still be only a fraction of the $480 billion global revenues generated by the LPO industry by 2015.

Sources say that all the top law firms in the world are very keen to enter India. That explains why a section of lawyers is also welcoming foreign players with open arms. “Opening up the Indian legal system would be advantageous to Indian lawyers. This will be a great opportunity for them to learn the best practices of these international firms and also expose them to global laws,” says senior lawyer Shanti Bhushan.

Besides exposure to laws concerning issues such as mergers and acquisitions and power purchases, foreign firms will also bring immense employment opportunities to young and inexperienced lawyers. And some feel that it would make the field highly competitive and would thus improve its overall functioning. “This step would give a jolt to the Indian legal profession to brace up to face the competition,” says Jayagovind. Som Mandal, partner FoxMandal Little, writes in an article that lawyers who oppose foreign players do so because they don’t want to let go of their monopoly. But Bhushan points out that Indian lawyers need not feel threatened by their foreign counterparts as they have the capability to hold their own against any competition.