The entry of foreign firms should herald more legal sector reforms

In a surprise move, the Bar Council of India (BCI) has taken a reformatory step towards allowing foreign lawyers and foreign law firms to practise and set up offices in India. This comes after multiple rounds of litigation before various high courts and the Supreme Court of India, where the BCI and several bar associations had opposed the move.

- SHRIKRISHNA UPADHYAYA

Foreign lawyers and firms will now be allowed to "practice foreign law and diverse international law and international arbitration matters in India on the principle of reciprocity" (i.e., the other country must also offer similar treatment to Indian lawyers and firms). They will be allowed to undertake corporate and transactional work, including advising clients on joint ventures, mergers and acquisitions and intellectual property matters, and drafting contracts. However, they will be restricted from offering advice on domestic law, participating in litigious matters or appearing before courts, tribunals and other authorities.

The BCI has commendably changed its stance and initiated what is perhaps the first step towards liberalizing India's rapidly growing legal services market. As noted by the BCI Rules for Registration and Regulation of Foreign Lawyers and Foreign Law Firms in India, 2023, the standards and proficiency of Indian lawyers and firms are up to international standards and opening up the Indian legal market to global competition will ensure mutual benefits and the legal profession's growth.

Moreover, it will have attendant benefits, such as promoting India as an international arbitration hub. Since foreign firms can engage Indian lawyers, the latter will benefit in terms of employment and retainership opportunities as well as remuneration and global exposure.

The new rules may be challenged in courts by bar associations or local lawyers who benefit from the entrenched status quo or have vested interests. While we await the final word on this issue, this is arguably an opportunity to discuss further reforms that could help create a robust, globally competitive and advanced legal sector in the country.