Indian Government Discusses Opening Up Legal Sector

Although its seems as though I am continuously blogging on this topic, given the implications the liberalization of the Indian legal services sector has on the legal outsourcing industry I will endeavor to keep readers of my blog as up to date as possible on all related developments.

In an extremely informative article by LiveMint.com reporter Malathi Nayak (click here for full article) we read that the Indian Government is once again debating the issue of the opening up of its doors to foreign law firms.

Union Law Minister H.R. Bhardwaj when questioned last Tuesday on the government’s ongoing negotiations with domestic Indian lawyers, specifically focussed on the opening up of the legal sector, is quoted as saying “We’re negotiating this issue”. Mr Bhardwaj did refuse to put a specific time frame on these discussions stating “these things aren’t decided in time frames”.

According to Nayak the government has been involved in discussions with the Society of Indian Law Firms (SILF) and has been requesting their input on safeguards to ensure that domestic firms don’t fall by the wayside following the entry of major U.S. and U.K. firms. SILF is the apex body of law firms in India and was established in 2000 with the aim of protecting, safeguarding and promoting the interests of the country’s domestic firms.

The Society is due to meet with government officials within the Law Ministry on October 3rd. SILF President, Lalit Bhasin, a partner in the law firm Bhasin and Co commented that “three days ago, the ministry of law filed an affidavit in the Bombay High court pleading that practice of law in India should be interpreted as the practice of Indian law alone……..This would bring the foreign lawyers who practice international law in India outside the purview of the Indian Advocates Act.”

Given that the "practice" of international law is exactly what is sustaining the fast emerging offshore legal process outsourcing industry, any developments in this space are of the utmost importance. As soon as I know any more, I'll post accordingly.

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An Update on the Liberalization of India's Legal Sector

Following on from my recent posting on the potential liberalization of India’s legal sector I read an extremely informative article published in India West, a leading weekly in North America dealing with India related issues.

The article was headed “Opening Up India’s Legal Sector Tough Call” and featured an interview with San Francisco attorney Mukesh Advani. Mukesh was one of the panelists I thoroughly enjoyed meeting/debating with at last June’s North American South Asian Bar Association (NASABA) conference.

The general consensus appears to be that despite the growing clamor for the opening up of the Indian legal sector (even the Indian Prime Minister, Dr. Manmohan is on record as favoring a “more open legal sector”) that there is still a lot of resistance.

As it stands foreign law firms are barred from practicing law. International law firms have opened liaison offices and established captive arrangements with legal process outsourcing companies (LPOs), while others contract directly with the ever increasing number of LPOs. Mukesh relates in the article how the Mumbai High Court filed an interim order that the words “practice the profession of law” are to have a wide mandate and not be restricted to appearing in court. This is to counter the arguments being raised by some that “practicing law” should be restricted to appearing as an advocate in court and not include transactional work.

Mukesh goes on to say that prior to their being any relaxation of the rules relating to opening up the market to foreign firms that some of the restrictive rules appertaining to Indian firms must first of all be lifted. He advocates a period of time for Indian firms to adjust to being allowed to advertise, having more than 20 partners and obtaining outside finance (all prohibited under current Indian legislation). Without this period of adjustment he argues that the domestic Indian law firms will simply be unable to compete with their U.S. and U.K. counterparts.

This is where my point of view differs slightly to Mukesh’s. I believe that the growing legal outsourcing industry, LPO captive arrangements and liaison offices of international law firms have already unofficially liberalized India’s legal market. According to some estimates it is anticipated that India’s legal process outsourcing industry will employ over 32,000 people by 2010. I understand the sentiment, however; the reality is that the legal market is already open to foreign investment, so why delay the inevitable?

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