In a significant move, the Bar Council of India (BCI) has allowed foreign lawyers and law firms to enter the Indian legal market. Foreign law firms and lawyers were so far not allowed to have a presence in the country.
The BCI’s latest rules on registration of foreign lawyers and foreign law firms, also paves the way for them to advise Indian clients on international legal issues, including international arbitration.
They will be allowed to practice in non-litigious matters, which would be laid down by the BCI in consultation with the Law Ministry. While they will be allowed to practice on transactional work/ corporate work such as joint ventures, mergers and acquisition, they will not be permitted to undertake work pertaining to conveyancing of property, title investigation and similar work.
The latest BCI rules enable foreign lawyers and law firms to practice diverse international law and international arbitration in India. They cannot, however, appear in Indian courts and tribunals for litigation work, nor can they appear before Indian regulators.
The rules make it clear that a foreign lawyer or law firm would not be entitled to practice law in India without registration with the BCI. The prohibition will not apply to law practice by a foreign lawyer or a foreign law firm on a ‘fly in and fly out basis’ for the purpose of giving legal advice to a client in India on a foreign law or international legal issues. In such cases, their practice cannot exceed 60 days in any period of 12 months.
The registration fee for a foreign lawyer (as an individual) under the new framework is $25,000, while the security deposit is $15,000. The registration fee for foreign law firms (private companies, LLPs, partnerships) is $50,000 and the security deposit is $40,000. Besides, there is also a renewal fee of $10,000 and $20,000 for foreign lawyers and foreign law firms, respectively.
Allowing foreign lawyers and law firms to register and be regulated by the BCI is seen as a signal to bring all law firms, including domestic ones, under the regulatory oversight of this Council. As on date, there is no framework within which BCI can regulate domestic law firms.
‘Formalisation of legal profession’
Aseem Chawla, Managing Partner, ASC Legal, a law firm, said the regulations were relaxed earlier to allow multinational accounting and law firms to operate out of GIFT City. It marks the beginning of the formalisation of the practice of legal profession. “BCI at present does not have a formalised framework to regulate law firms, unlike ICAI or ICSI. The Foreign Lawyers Registration Rules comes across as the beginning of the consolidation and formalisation of practice of the legal profession, which has been long overdue,” he said.
Principle of reciprocity
Abhishek A Rastogi, founder of Rastogi Chambers, said: “As the provisions will be on reciprocity basis, even Indian lawyers and law firms can render the same set of services in the respective foreign country. This means that there will be more confidence in the industry, as they will be able to hire the best legal professionals from India and overseas”.
Also read: Making big accounting firms fall in line
The endeavour remains to make India a hub for international arbitration, and these initiatives and steps towards entry of global law firms and lawyers will help our country move in the correct direction, Rastogi added.
Meanwhile, BCI contended that its latest move will not impact law practice in India if done in a restricted and well-controlled and regulated manner. These rules are based on ‘principle of reciprocity in a well-defined, regulated and controlled manner,’ it added.
Vinayak Burman, Managing & Founder Partner, Vertices Partners, said “Opening up a law practice in India to foreign lawyers will create opportunities for tie-ups and partnerships. It is likely to pave the way for potential consolidation, especially for firms dealing in the cross-border M&A practice in particular. A lot of Indian firms with sound functional fundamentals in the PE/VC space per se (not based on flip structure transactions which are gradually seeing the reverse trend) are as it is creating a mark in the market. Also, the dollar billing element is something that makes Indian founders very sensitive and conscious from a price point perspective. Over a point of time, this would create a potential exit and even alignment structures for niche firms but to see an actual impact, this will have to be played through with vintage”.