THE DOOR LEFT AJAR: LIBERALIZATION OF INDIA’S LEGAL SERVICES SECTOR
Clinic: CTIL, New Delhi/Jodhpur, Spring 2021
Beneficiary: Services Export Promotion Council (SEPC), India
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With the onset of globalization, multi-jurisdictional legal issues have become indispensable. However, India’s desire to liberalise and integrate into the global economy did not include liberalizing the country’s domestic legal services. This report explores the regulation of legal services in India, and identifies various approaches towards liberalization along with the opportunities and risks that come with it.
First, the report highlights the status quo with respect to regulation of the legal services sector in India. The requisite eligibility criteria to practice law in India are (i) India citizenship; (ii) degree in law from BCI recognized institution; and (iii) minimum 21 years of age. Initially, there was an absolute prohibition on the entry of foreign legal professionals into India’s domestic legal sector. However, after a decision by the Supreme Court of India, the foreign legal professionals were allowed to make casual visits on a ‘fly in and fly out’ basis. The report suggests liberalization in a phased manner through removal of advertising restrictions, greater involvement of foreign legal services in certain specialised areas of law such as cross border transactions, and removal of restrictions on joint ventures between Indian and foreign law firms.
Second, the report suggests liberalization through mutual recognition agreements (MRAs) between India and a partner country. An MRA is an agreement in which the countries recognize each other’s professional degrees, educational degrees, licenses, and certifications etc. However, liberalization through an MRA requires (i) harmonization or equivalence of educational degree; (ii) removal of prohibition on the formation of a JV with any foreign legal firm, profit-sharing agreements with any foreign entity, etc; and (iii) establishment of a body to regulate the foreign legal services.
Third, the report undertakes a comparative examination of the provisions of the draft BCI (Registration and Regulation of Foreign Legal Consultants and Registered Foreign Law Firms in India) Rules, 2016 in light of the existing regulatory structure in other countries such as France, Malaysia, Singapore, and the United Kingdom. The suggestions that have been made are related to issues which ought to be considered during the initial stages of liberalisation – including employment requirements, licensing regulations, practice areas that are permissible to foreign lawyers and foreign law firms, amongst others. Finally, the report concludes by identifying the way ahead.
Read the full report here.