Bar & Bench News Network
Aug 01, 2011
Last year in April, a Public Interest Litigation (PIL) was filed in Madras High Court by A. K. Balaji, an advocate and a member of Association of Indian Lawyers. The petition was filed against 31 foreign law firms from USA and UK, including one LPO. The Petition challenges the entry of foreign law firms into the country and sought a Writ of Mandamus directing the Government to take action against foreign law firms practicing ‘illegally’ in India either on the litigation side or in the field of non-litigation.
The Petitioner claims that these foreign law firms are allegedly violating provisions of Indian Advocates Act, 1961 (the Act) by providing legal services in India. The Petition was filed just few months after the Bombay High Court passed a landmark judgment which practically denied foreign law firms entry into India on the basis of the existing laws. The Bombay High Court in its judgment in the case of Lawyers’ Collective has held that the practice of law in India, as governed by the Act, included both litigious and non-litigious practice.
The Petitioner alleges that the foreign law firms are trying to exploit the growing Indian market. The Petition not only deals with the issue of entry of foreign law firms, but also on the modus operandi currently adopted by these firms to provide legal services in India. The Petitioner has made several allegations against these foreign law firms including violation of immigration laws, having offices and practicing law in the form of LPOs, treating practice of law as business venture, not allowing Indian lawyers to practice law without taking further set of educational courses and other tests and many more.
We have tried to analyse the response filed by the foreign law firms to the abovementioned allegations made in the Petition against these firms.
Mode of entry of foreign laws – Immigration Law violations
The Petitioner has challenged the mode of entry of the foreign lawyers into India. The Petitioner alleges that these firms have already entered India indirectly and are operating out of five-star hotels and most lawyers working at these foreign law firms visit India using tourist visas and violate various taxation and immigration laws.
The foreign law firms have denied these allegations of the Association in relation to violation of immigration laws, stating that, firstly none of the representatives of the foreign law firms have undertaken business opportunities on tourist visa in India. Secondly, none of the practitioners of the said law firm have engaged in dispute resolution within the confines of the hotels in India.
Additionally, foreign law firms have also gone ahead and made it clear that the participation in seminars and conferences does not tantamount to practice of law in India and most of the lawyers from these firms have been delegates to India with International Associations. It has also been made clear by the foreign law firms that lawyers are also frequenting India to meet old as well as prospective clients who have a global presence and who require assistance from these law firms from an international law perspective.
Amongst the 31 foreign firms listed in the Petition, Allen & Overy and Linklaters are the only two firms that have alliance-type relationship with Trilegal and Talwar Thakore & Associates respectively. Allen & Overy in its response has also categorically stated that since last three years it has with Trilegal been conducting International Finance Law course at National Law School Bangalore, which required travel of significant number of lawyers.
Foreign law firms have also clarified that marketing of relationship between foreign and Indian lawyers is commonplace in International trade and the same cannot be confused with establishment of a physical presence by foreign law firms in India. These are steps towards mutual business growth of both Indian as well as International law firms. Towards an example of mutual benefit, International law firms have also cited names of renowned Indian law firms who are now members of International legal organizations which leverages them globally.
Law Firms exist in India through LPO outfits
The Petitioner alleges that most foreign law firms exist in India through the Legal Process Outsourcing (LPO) outfits. The Petition states that most foreign law firms have their back end offices in India, which not only does their back end activities, but also provides legal services in India.
Foreign law firms in their response have denied owning, operating or having any kind of participation interest in LPO outfits in India. Specific firms have detailed their back end operations in India, which are only restricted to office billing and technology related inputs. It has also been categorically mentioned that the said back-end operations are fully compliant with the applicable Indian laws.
Clifford Chance and Linklaters are the two firms which have a back office in India. The Clifford Chance back office work is being undertaken by its wholly owned subsidiary OSC Export Services Pvt. Ltd. Linklaters is undertaking its back end office work through its indirectly wholly owned subsidiary in India named Link-Info Business Services India Pvt. Ltd. (LIBS).
None of the two are providing any legal services from the respective back end offices.
Allen & Overy in its response has also clarified that it does not own or operate an LPO in India and does not have any office in India. However, on client’s specific instructions it has engaged Integreon Managed Solutions, Inc for review of documents for disclosure purposes in litigation matters. Invoices for this work are passed on to clients as disbursements.
Law as a business as opposed to ‘Noble Profession’
The Petitioner alleges that the practice of law is treated as a noble profession in India, but the foreign law firms are treating it as a trade or business and a ‘money spinner’.
The foreign firms based in USA have stated that the firms practice law as per the rules applicable in each jurisdiction. In many jurisdictions, it is recommendatory or mandatory to render a certain proportion of services on pro bono basis. Rule 6.1 of District of Columbia Rules of Professional Conduct provides that “A lawyer should participate in serving those persons, or group of persons, who are unable to pay all or a portion of reasonable attorneys fees or who are otherwise unable to obtain counsel”.
The below table provides the amount of hours spent by foreign law firms on pro bono work.
It is interesting to see the amount of pro bono hours spent by these foreign firms and whether the same can even be compared to the pro bono work undertaken by Indian law firms.
The foreign firms in UK in their response have stated that English Solicitors are regulated by the Solicitors Regulatory Authority (the SRA). Rule 1 of the SRA’s Code of Conduct sets out the core duties of a solicitor. These apply to a solicitor whenever he or she is and he/she may be disciplined by the SRA for a breach wherever it occurs. It follows that if an English solicitor were to visit India and advise a client on foreign law, that solicitor is not unregulated and continues to pursue a noble profession as, no doubt, an Indian lawyer would be when travelling abroad.
The firms have clearly stated that it is their policy to encourage its lawyers and support staff to do valuable community work through which they can bring skill and expertise to the organizations, communities and causes that would otherwise struggle to gain access to such expertise.
Reciprocity to practice law in UK and US law firms
The Petition points out that Indian law firms and lawyers who want to practice in England have to clear several qualifying tests. Further, there is no assurance that they would obtain work permit, even after clearing all the tests. The Petition states that only lawyers and law firms from those countries that offer similar opportunity to Indian lawyers and law firms should be entitled to practice in India.
In defence to the above mentioned allegations, it has been stated on behalf of UK law firms that as a matter of English Law and Regulation, foreign lawyers are free to advise on their own system of law or on English law (except for certain defined legal activities), or any other system without any nationality requirement or need to be qualified in England. It has been emphatically mentioned that it is not necessary to re-qualify to practice law in England. The UK firms in their response have stated that the eligibility requirements have been simplified and a Bachelor’s degree will be considered for awarding point when applying for UK Tier -1 Visa. It is also possible for Indian Lawyer to enter under other categories of visas.
The firms assert that requalification is available to Indian lawyers; however, it is not necessary to qualify in order to practice law in the UK. There are currently 1,245 Indian Advocates who have requalified as English solicitors since 1995. Of this number, 622 qualified individuals (or 50 percent) have remained in the UK, 484 or 39 percent have returned to India after requalification and the remaining 139 are working in Singapore, USA, Hong Kong or elsewhere. These figures clearly show that neither QLTT nor the change in immigration requirements has prevented Indian advocates from requalifying as English solicitors, nor in using this qualification to access a wider world of legal work.
The firms stated that there has been a growing number of young Indian Lawyers who have joined various law firms in UK after graduation and either re-qualified as English lawyers or are in the process of requalifying and who then stay on to practice in England, despite all the obstacles to which Petitioner alludes to.
The response also provides that as per the new policy which came into effect on September, 2010, the Qualified Lawyers Transfer Test (QLTT) has been replaced with the Qualified Lawyers Transfer Scheme (QLTS).
The foreign firms further state that there are number of Indian Advocates and also retired judges of the Supreme Court of India and various High Courts of the State in India who come to England for arbitrations which are conducted under various International Arbitral Institutions such as the International Chambers of Commerce, London Court of International Arbitration. Additionally, several Indian lawyers visit the UK to instruct solicitor and council in Court proceedings.
US law firms too have denied the allegation and have stated that lawyers from India are not restrained from practicing Law in USA and, infact, many Indian lawyers do practice law in the USA in one or both of two different manners: (i) Lawyers qualified to practice in India may open an office for the practice in Indian Law in 30 states of the USA. In each of these jurisdictions, an Indian lawyer need only submit an application certifying qualification to practice law in India and pay a modest fee. No examination is required. (ii) Consisting with professional responsibility rules in the USA, Indian Advocates who concurrently associate with the US Licensed Lawyers on specific matter come to the USA on a temporary in and out basis to consult on a Indian Law issues without registration and without any impediment being imposed to that practice.
The foreign law firms have clearly refuted all the allegations made by the Petitioner. The firms have concluded by saying that there is no restriction on the practice of foreign law within the territory of India and that the Indian law does not in any way prohibit them from to travelling to India and advising on International law.
The matter is listed for hearing tomorrow before the Madras High Court. The matter was postponed to August 2 as the Bar Council of India (BCI) was in the process of drafting a proposal to address the issue of foreign law firms.
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