Legal News

A Passage to India: Are Foreign Law Firms in the Country?s Future?

By Dan Slater

Given that India is the most populous democracy in the world, and the second most populous country in the world, we imagine there’s some nice change to be made in legal fees for lawyers willing to make the trip — not to mention a tasty plate of chicken tikka masala. Unfortunately, though, for the world’s mega-firms, the Indian Advocates Act of 1961 prevents foreign firms from doing business in the country. Here’s a story, entitled “Legally Barred,” from The Economist.

It begins: “If you want to find the legal chiefs of big defence companies such as Boeing or BAE Systems, a good place to start looking is the foyer of the Taj Mahal Hotel in Delhi [pictured]. The in-house legal bosses are in town to appoint law firms to support their push into the Indian market, as the government updates its military equipment. They have to go in person, rather than sending their usual lawyers. . . .”

So these GC’s can’t even send their outside counsel over to negotiate their deals? It seems not. According to the piece, the wall went up in the 1990s when Ashurst, a British firm, along with White & Case and Chadbourne, opened offices in India. The Indian lawyers sued, stirring a debate over whether the country should open up to foreign law firms. India’s 15,000 corporate lawyers reportedly worry that they’re not ready for international competition since they’ve been hampered by strict rules that limit law firms to 20 partners and prohibit Internet advertising.

But now, reports The Economist, the situation could be shifting. On April 25th, some of India’s judges were due to hear the final submissions in a High Court case between three international law firms and a group of prominent local lawyers. (For background on the dispute, see this article from The Economic Times.) The decision could affect how the 47-year-old Indian Advocates Act is interpreted.

The consensus among Indian lawyers in favor of liberalization, according to The Economist, is that the market should be opened gradually, to give Indian firms a chance to compete against foreigners. “We’ll learn a lot from the international profession, and maybe we’ll teach them a bit too, but before we open we must correct all these ills,” said Rajiv Luthra, the founder and managing partner of Luthra & Luthra, one of India’s biggest firms.

Full post as published by Law Blog - WSJ.com on April 30, 2008 (boomark / email).