(BCI Call to Foreign Lawyers & Law Firms - Something to cheer or a case of missing the goalpost by a mile)
The Bar Council of India (BCI) released the Bar Council of India Rules For Registration and Regulation of Foreign Lawyers and Foreign Law Firms in India, 2022 on the 10th of March 2023 (BCI Rules), to facilitate the registration and practice of foreign lawyers and foreign law firms in India.
The BCI Rules provides/restricts the following for the foreign lawyers and foreign law firms:
a. to practice law here in non-litigious matters and that areas of practice shall be prescribed by the BCI in consultation with the Union Ministry of Law and Justice.
b. open up law offices.
c. not to appear before any courts, tribunals or other statutory or regulatory authorities.
d. to practice on transactional work/corporate work such as joint ventures, mergers and acquisitions, intellectual property matters, drafting of contracts and other related matters on reciprocal basis.
e. not be involved or permitted to do any work pertaining to conveyancing of property, title investigation or other similar work.
f. do work, transact business, give advice and opinions concerning the laws of the country of primary qualification.
g. provide legal advice and appear as a lawyer for a person, firm, company, corporation, trust, society etc which has an address in a foreign country in any international arbitration case which is conducted in India and in such arbitration case where foreign law may or may not be involved.
h. provide legal advice and appear as a lawyer before bodies other than courts, tribunals, boards, statutory authorities which are not legally entitled to take evidence on oath, in cases in which knowledge of foreign law of the country of primary qualification is essential.
i. provide legal advice concerning the laws of the country of primary qualification and on diverse international legal issues. This shall not include representation or the preparation of documents regarding procedures before an Indian court, tribunal or any other authority competent to record evidence on oath.
j. procure legal expertise of one or more Indian advocates registered as foreign lawyers.
k. procure the legal expertise of any advocate enrolled with any State Bar Council in India on any subject relating to Indian law.
l. form partnership with one or more foreign lawyers or foreign law firms registered in India under the BCI Rules.
The present BCI Rules follow the earlier draft BCI rules of 2016 on the same subject which were later withdrawn and a series of past deliberations by the Union Ministry of Law & Justice and also Union Ministry of Commerce with stakeholders and reports and recommendations submitted by stakeholders including Hammurabi & Solomon Partners.
The BCI notification purports to explains that:
a. Time has come to take a call on the issue. BCI 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 in international arbitration cases would go a long way in helping legal profession/domain grow in India to the benefit of lawyers in India too.
b. Taking an all-inclusive view, the BCI resolves to implement these rules enabling foreign lawyers and foreign law firms to practice foreign law and diverse international law and international arbitration matters in India on the principle of reciprocity in a well-defined, regulated and controlled manner.
c. In course of some discussions and deliberations with the Law Society of England & Wales and some Governmental delegates of U.K. with the Secretary of Department of Legal Affairs, Government of India, it has been stated by the side of U.K. that Indian lawyers/law firms can establish in England and Wales and can practice Indian law, international law as well as provide English law advice. They however normally cannot practice in any of the six reserved activities detailed in the high-level summary of the regulation of foreign lawyers in UK (e.g. exercise of a right to audience/appear before a Court, conduct litigation, carry out reserved instrument activities (a contract to grant a short lease, a will or other testamentary instrument, an agreement not intended to be executed as a deed, other than a contract that is included above, a letter or power of attorney, a transfer of stock containing no trust or limitation of the transfer, conveyancing of property and similar work), probate activities, administration of oaths, notarial activities). The Bar Council/Bar Standards Board also has a process for temporary call to the Bar for a visiting advocates engaged in one case/a series of cases before the English courts. As per the delegates of U.K. the Indian lawyers only need to register as Registered Foreign Lawyers (RFL) if they are in partnership with solicitors of England and Wales. They remain in any case under the regulatory remit of their Home Bar (Bar Council of India). As per discussions, there is already a way to requalification for Indian advocates through the Solicitors Qualification Examination (SQE), with a process to apply for eligible exemptions. The Bar Council of India proposes to examine such truth/the veracity of such statements and its ramifications in details, and, shall hold enquiries and further deliberations after involving the Government of India through Ministry of Law and Justice and the Government of U.K. and the Bar Council of India , and thereafter may also think to introduce some Qualifying Exam for the purpose of eligibility and exemptions in similar manner, if it does not adversely affect the interest of Indian Lawyers/Law Firms and the Government of India.
d. It is also to be noted that the Bar Council of India is keen to progress on the idea of an MoU between the Bar Council of India, the Government of India (through Ministry of Law and Justice ) on one part and the Law Society of England and Wales, Government of U.K. , Bar Council of England and Wales, on the other. The U.K. Delegates have also assured the Bar Council of India that the Authorities in U.K. are also keen and interested in the means of collaboration, cooperation and joint practice between Indian advocates and UK lawyers.
e. It is noteworthy that the standards of Indian lawyers in proficiency in law is comparable with the international standards and the legal fraternity in India is not likely to suffer any disadvantage in case law practice in India is opened up to foreign lawyers in a restricted and well controlled and regulated manner on the principle of reciprocity as it would be mutually beneficial for lawyers from India and abroad and these Rules are an attempt by Bar Council of India in this direction.
f. These rules will also help to address the concerns expressed about flow of Foreign Direct Investment in the country and making India a hub of International Commercial Arbitration. In case, we sleep over the matter, the legal fraternity of India may be left behind in providing legal/professional expertise in accordance to the rule of law in a manner consistent with the best interests of this fast growing class of clients in India. Let us ensure than an opportunity for creating development and growth for legal profession and in the legal sphere in India is not lost. Many countries have already allowed the foreign lawyers to practice foreign law and diverse international legal issues and arbitration matters in their countries in restricted fields with specific and prescribed conditions.
So where does the BCI Rules leave the domestic Indian Law Firms ?
On a directional level, the BCI Rules takes forward the long awaited agenda to open up the legal services sector. However, on the likely implications of the BCI Rules, many questions and apprehensions remain:
a. Whether domestic firms will continue to be kept under restrictions on marketing, advertising, maintaining websites etc. and will be made to compete with their foreign counterparts with their hands tied?
b. Whether domestic firms will be denied a recognition as an entity providing legal services under the Advocates Act, 1961 and will thus be faced with an uneven playing filed while competing with their foreign counterparts?
c. Whether domestic firms will be denied their ability to constitute themselves as a limited liability partnership (LLP) while having to compete with better structured foreign counterparts entitled to form LLPs under the BCI Rules?
d. Whether domestic lawyers and firms will be subjected to the provisions of a statutory law i.e. Advocates Act, 1961 for practice of law while foreign counterparts will be exempted from the provisions of the Advocates Act, 1961 vide notifications/orders in derogation of the Statutory law. Also, whether prejudice (if any) caused to domestic lawyers/firms arising from the BCI Rules would continue to be subject to the same remedies as provided in the Advocates Act, 1961?
e. whether foreign law firms would indirectly or in a surrogate manner practice Indian laws?
f. where stricter oversight by the BCI would be required to ensure that foreign lawyers and law firms adhere to Indian laws and regulations?
The list is long and so are the apprehensions. The opening of legal services section vide the BCI Rules has left the domestic lawyers and law firms in a disadvantaged position to compete with an adversary in the legal market who is allowed to do everything that the domestic lawyers/firm is restricted to do, i.e. :
i) Partnerships are the only permitted model of practice for law firms in India for domestic lawyers/firms;
ii) Further modes of practice such as limited liability partnerships or Limited Liability Corporation are not permitted;
iii) Limitation on the number of partners to 20. This limits the growth and size of Indian law firms;
iv) Bar on advertising even having entries in law directories;
v) Practice of law is treated as a profession and not an industry resulting in lack of finance for lawyers;
vi) Ban on advertising;
vii) Multidisciplinary practicing firms not allowed .Having functioned in such a limiting framework for the past fiftyyears, the Indian legal profession is still not well equipped to compete on par with international lawyers, who have grown their practices in liberalized regimes and have vast resources at their disposal. It is further to be noted that there are only a few firms in India having the expertise to handle commercial work for multinationals.
The BCI had been well aware of these challenges and also cognizant of the fact that these difficulties should be first removed to enable a level playing field between domestic and foreign lawyers/firms, following multiple deliberations with stakeholders. The HSP Report on the draft BCI rules of 2016 had also recommended the entry for Foreign Lawyers with adequate safeguards in a Phased Manner only upon the completion of the following:
1. Right to formation of LLP, Corporatize , Advertising to Indian Lawyers/ Law Firms
2. Reciprocity to Indian Lawyers in Practice in Foreign Country
3. To enable a level playing field to Indian Lawyers/ Law Firm
BCI’s failure to follow a phased manner approach has not only put the domestic lawyers/firms to prejudice but may also adversely affect the clients segment in India in a distorted level playing field where dominant foreign counterparts compete with domestic lawyers/firms with their hands tied.
While much remains to be discussed and deliberated on the BCI Rules, as of now, if is very difficult to cheer about and we seem to have missed the goalpost by a mile unless we see speedy action in creating a level playing field between domestic lawyers/law firms and their foreign counterpart as discussed above.