Bar council allows foreign lawyers, legal firms to practice in India

The Bar Council of India (BCI) on Wednesday allowed foreign lawyers and law firms to practice in India on a reciprocity basis.

Reciprocal laws are statutes of one state that give rights and privileges to the citizens of another state if it extends similar privileges to the citizens of the former.

In this regard, the BCI notified on Monday the Rules for Registration and Regulation of Foreign Lawyers and Foreign Law Firms in India, 2022.

According to the rules, a foreign lawyer or law firm is not entitled to practice law in India without registering with the BCI. Foreign lawyers will only be allowed to advise on international laws and will not be permitted to appear before any Indian courts and tribunals. “If need be, the Bar Council of India may consult the Government of India, Ministry of Law and Justice in this regard,” the rules say.

As per the rules, the areas of law allowed to foreign lawyers and firms will be laid down by the BCI, in consultation with the Union Ministry of Law and Justice.

Additionally, registered foreign law firms and lawyers can open law offices, engage and procure the legal expertise of one or more Indian advocates registered as foreign lawyers, procure the legal expertise of any advocate enrolled with any state bar council on any subject relating to Indian laws and enter into a partnership with one or more foreign lawyers or foreign law firms registered in India under these rules.

“Bar Council of India is of the view that opening up of law practice in India to foreign lawyers in the field of practice of foreign law; diverse international legal issues in non-litigious matters and international arbitration cases would go a long way in helping legal profession/domain grow in India to the benefit of lawyers in India too,” the BCI rules said.

The BCI said India was not likely to suffer any disadvantage as a result of the rules. “These rules will also help to address the concerns expressed about the flow of foreign direct investment in the country and making India a hub of international commercial arbitration… Let us ensure that an opportunity for creating development and growth for the legal profession and in the legal sphere in India is not lost,” it added.

While reactions from the legal fraternity were mostly positive, some expressed concerns about bullet-proofing the move with well-laid-out regulations.

Welcoming the move, Cyril Shroff, managing partner, Cyril Amarchand Mangaldas, said: “Whilst the devil will lie in the detail, I think this is a progressive development. India’s legal market is ready for change and will grow.”

On the other hand, Gunita Pahwa, joint managing partner, S&A Law Offices, said the rules should be implemented in a phased manner, with proper regulations and guidelines to ensure a level playing field for all. “The change in the Indian legal industry is inevitable, but we should not ignore the challenges that may come with it. Therefore, this change should be regulated and controlled by ensuring the principle of reciprocity in a well-defined manner. This will ensure a smooth transition and help build a strong and sustainable legal ecosystem in India,” she said.

Siddharth Mody, senior partner, Desai & Diwanji, said in situations where foreign laws intersect with Indian ones, the BCI and other regulators may need to step in to clarify the extent of the interplay between the foreign laws and Indian laws.

The reciprocity provisions under section 47 of the Advocates Act empower the BCI to prescribe conditions, subject to which non-Indian citizens with foreign law degrees may enrol as advocates in India. It also attempts to protect Indian citizens from unfair discrimination abroad.

Some experts felt the move could potentially lead to a loss of livelihood for the Indian legal community. “One of the major issues is the employability of fresh legal graduates. This is primarily due to the difference in legal training and education between India and other countries. This difference can affect employment opportunities for law graduates and lawyers who’ve just begun their practice,” said Abhinay Sharma, managing partner, ASL Partners.

However, Rohit Jain, managing partner at Singhania & Co, does not see an overnight increase in foreign law firms or lawyers in the country. “One important fine print in the regulations is that the permission is subject to reciprocity, which means that the council will first examine the relevant rules to ascertain reciprocity with the concerned foreign country. Effectively, this may require amendment in the rules of the corresponding foreign country also for these regulations to be implemented,” he said.

He clarified that foreign law firms will have to retain Indian lawyers to advise on local laws. “Regulation 8 (of the BCI rules) indicates that the intent is to allow foreign lawyers to advise on matters in which the laws of their respective country are involved or in international arbitration,” he said.

On the question of foreign firms buying domestic firms, he said 100 per cent FDI was allowed in the services sector. “My preliminary view is that foreign firms should be able to buy domestic firms, the corporate and arbitration practices at least,” he added.

What is to be seen is how the dynamics change after such foreign law firms and lawyers register in India, said Anushkaa Arora, principal and founder, ABA Law Office.

“Dynamics concerning misuse and the way BCI seems to tackle the same shall also have to be seen. Worthy to note, that BCI would have to be quite aggressive and stringent towards its approach in relation to any misuse as enshrined in the BCI rules, disabling such foreign lawyers and lawyers to misuse and Indian law firms and advocates to be in any sort of disadvantage,” she explained.