Legal Market Report & Directory of Indian Law Firms 2010

Indian law firms are grappling with a flood of new legislation as they attempt to capitalize on the resurgent economy

By Vandana Chatlani

In recent weeks resurgent monsoon rains have brought chaos to India’s capital city as it prepares to host the Commonwealth Games. India’s legal professionals, however, face resurgence of a more welcome kind as they respond to increased business activity. With Indian corporates once again bullish about expansion, confidence among lawyers is on the rise. Now that the hard work of dismantling, rebuilding and reorganizing is drawing to a close, lawyers have begun to structure new deals, recruit new talent and get to grips with a plethora of new laws that will dramatically alter the country’s legal landscape.

Legislative makeover

Legislative and judicial reform dominates the agenda as a stream of new bills are drafted and discussed by parliament. “Every major law is being changed and updated,” says Aaron Solomon, managing partner of Solomon & Co in Mumbai.

Lawyers are wrestling with new legislation that will modify everything from the tax system, education and competition, to litigation, takeovers, securities and the price of shares issued to non-residents.

As part of new rules for listed companies, the government recently raised the minimum threshold for non-promoter public shareholding from 10% to 25%. “The impact is direct. It forces companies to determine whether they want to stay listed or go private because capital-raising is expensive,” says Rajat Sethi, a partner at S&R Associates in New Delhi. “The squeeze-out provision is notoriously difficult for minority shareholdings in India. The government needs to provide an alternative.”