The future direction of India’s legal market may be influenced by a little-known case that has languished in the country’s courts for 13 years. Alfred Romann reports

For over a decade Lawyers Collective v Bar Council of India et al sat dormant in the files of Bombay High Court. It emerged again in 2007, resurrected amid a growing discussion about the role foreign lawyers play in India, and the fact that many of them are effectively practising in the country.

This work takes place not in law firm offices, but in the lobbies and bars of the best hotels. It is accomplished either through cooperation agreements with local firms, or by the foreign lawyers themselves “parachuting” in from London, New York or Singapore.

Over the last 10 years, the liberalization of India’s legal market has been an issue of little political importance, far down the list of priorities for successive governments pursuing a delicately balanced agenda of economic growth, social stability and reform. It is this same agenda, however, that has recently brought the issue back into the limelight.

Economic reform and the resulting growth have transformed India into an attractive destination for foreign capital. At the same time, Indian multinationals have emerged, hungry for acquisitions abroad. Like it or not, interaction with foreign lawyers has become a necessity.

Despite this new reality, the Indian legal establishment has fiercely guarded its 47-year-old prohibition on foreign law firms opening offices in the country. The only exception was a short-lived experiment with liberalization in the early 1990s when the Reserve Bank of India (RBI) permitted the establishment of foreign “liaison” offices. These offices were neither allowed to offer legal advice nor have lawyers on their staff.

Three foreign law firms – Ashurst, Chadbourne & Parke and White & Case – were granted two-year licences to set up liaison offices in India, strictly and solely to handle marketing operations. Controversy was soon to follow.

Indecisive action

Lawyers Collective is a Mumbai-based not-for-profit pressure group run by lawyers. It has limited funds and usually campaigns on social issues such as civil rights, HIV/AIDS and affordable medicines for the poor. In its history, it has filed just a single case in its own name.

That case began in 1995, when Lawyers Collective applied for a legal review of the RBI licences granted to the three foreign law firms. Widely interpreting the Legal Advocates Act, 1961, the collective argued that foreign firms should not be allowed to have a presence in India.

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