The end of monogamy?

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India’s shuttered legal market spurs the separation of yet another law firm pairing, amid changing ambitions and new beginnings

Akira Kawamura, president of the International Bar Association, said recently that “opening a legal market fully to the world works to the great benefit of all of the stakeholders, provided the change is introduced in an extremely carefully planned way.”

Kawamura’s comments were shared in a report by YouGov, an independent market research agency that was commissioned by Allen & Overy to canvass the views of 300 of India’s senior lawyers, corporate counsel and business executives on liberalizing the country’s legal market. The results, which were published at the end of June, paint a picture of an India ready to embrace international lawyers and collaborate with them on home turf.

Despite this, India appears no closer to lifting its ban on foreign lawyers. The distant dream of liberalization is one that Allen & Overy and its Indian best friend, Trilegal, had clung to during their five-year relationship, which ended late last month.

Disappointed with the lack of movement and seeing no sign of reform, the firms concluded that their arrangement restricted their “ability fully to exploit the growing opportunities in India”.

The journey was generally a happy one and one of the longest lasting referral arrangements between an Indian and international firm. However, both firms endured attacks from lobbyists determined to keep the legal market closed to foreign competition.

Allen & Overy was among the targets when a little known South Indian lawyer filed a writ petition in 2010 alleging that the magic circle firm, 29 other foreign law firms and a legal process outsourcing provider were illegally practising law in India. In February this year, a two-judge bench of Madras High Court ruled that foreign lawyers could “visit India for a temporary period on a fly in and fly out basis” to advise their clients on foreign law, but an interim order by the Supreme Court in July “clarified” that foreign law firms should not be allowed to open liaison offices in India.

Add to that a looming election, coming changes in the tax regime and a less than buoyant economy, and it seems clear that no amount of foreign pressure or domestic championing of liberalization will push the issue anywhere near the top of the government’s list of priorities.

“Our relationship was put together during a period when liberalization seemed to be just around the corner,” says Anand Prasad, one of Trilegal’s founding partners. “We realized that the government was dragging its feet on more important decisions. We didn’t see liberalization and, logically, no new government will do it immediately upon coming in.”

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