Modi set to liberalize legal sector

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The government plans to liberalize the legal sector around November, Salman Waris, an executive committee member of the Indian National Bar Association (INBA), told India Business Law Journal.

“They are looking at a timeline of three to four months to liberalize the sector,” said Waris, who was present at a meeting in late July at the law ministry in Delhi, attended by Minister of Law and Justice Ravi Shankar Prasad, Commerce Secretary Rita Teaotia, Bar Council of India (BCI) chairman Manan Kumar Mishra and representatives from the Bar Association of India, Society of Indian Law Firms (SILF) and INBA.

Teaotia said that the issue was a top priority for Prime Minister Narendra Modi.

“The government wants to amend the Advocates Act and introduce necessary changes in the Special Economic Zones Act to permit foreign law firms to set up offices in SEZs like the Gujarat Financial Tech City (GIFT),” said Waris.

The government, as part of the first phase, plans to allow foreign law firms to first set up in SEZs where their lawyers could advise domestic and foreign clients on non-Indian laws. The government would deliberate on the second phase once the foreign law firms had entered the country.

A lawyer at the meeting asked that the government only allow foreign firms to operate from GIFT, and that these should not be allowed to hire Indian lawyers. Waris, who is also a founding partner of TechLegis, opposed this view. “Foreign law firms already have their India teams based in offices in Singapore and Dubai, etc., and the firms would not come if they could only operate from GIFT,” he said.

The meeting was attended by prominent law firms such as Cyril Amarchand Mangaldas, Shardul Amarchand Mangaldas, AZB & Partners, Luthra & Luthra, Bhasin & Co, and J Sagar Associates (JSA). “While JSA has always been open to the entry of foreign law firms in India, the firm would be in favour of reforms in the landscape for domestic firms coupled with a phased opening of the legal market,” Dina Wadia, joint managing partner at J Sagar Associates, told India Business Law Journal.

INBA’s secretary general, Kaviraj Singh, said: “INBA believes that probably now is not the right time to open the Indian legal sector completely to allow foreign lawyers to practise before Indian courts.”

SILF president Lalit Bhasin declined to comment, stating that the July meeting at the Ministry of Law and Justice was confidential.

As a concessionary measure, Prasad told the BCI to prepare draft amendments to the Advocates Act and the Bar Rules by the end of August to allow lawyers to advertise and operate proper websites.

“Up till now, Indian firms have been very restricted about what they can say about themselves and the services they offer,” said Wadia. “There would need to be a balance as firms should not be able to advertise as if they were selling soap.”

She called for firms to be able to make available more information about their work and services on websites, legal directories and other media, while being observant of legal ethics.

Waris explained that once the BCI submits its recommendation to the law ministry, the ministry will initiate the process of amending the legislation internally, within the government. After the draft amendments are finalized, they will be tabled before the parliament and subsequently passed into law, and once they receive the assent of the president they will be notified in the Official Gazette of India.

Ministry of Commerce and Industry officials indirectly confirmed to Waris in a follow-up meeting in August that Modi asked the law and commerce ministries to submit draft notifications by early September for this purpose. At the follow-up meeting, the commerce secretary said that a consultative conference was being held in October where international stakeholders, along with global and Indian experts, would further discuss the proposed liberalization of the legal market, along with making India an international arbitration hub.