Bar Council thumbs down foreign law firms

The tone for the meeting, for all purposes was set by retired Justice Y V Chandrachud who had an emphatic “no” for the amendments. In his inaugural address Chandrachud argued that he opposed the entry of FLCs not because they were `foreigners’, but because they were not trained to practice the Indian Law and were not ready to undergo tests by the Indian authorities.

The working paper – though not to be forwarded by the Law Commission till bar associations across the country send in their reactions – falls from the globalisation process afoot with India obliged to “liberalise services, including the legal services” as a part of the GATS (General Agreement on Trade and Services) treaty.

The paper proposes to allow FLCs into the country, “provided they are qualified and meet restrictions laid down”, though these “restrictions” are not defined. Also, it proposes “multi-disciplinary partners” for law firms where an architect, a management consultant, a chartered accountant etc could be partners of the law firm giving a one-stop shop for all kinds of consultancy services, though it is not sure how these law firms will be regulated.

However, as speakers remarked, in no country, even in Singapore, Hong Kong, Japan are FLCs given untrammelled entry and are restricted to servicing only foreign firms. With no such barriers spelt out, senior counsel Rafiq Dada felt the “amendments have a realm of ambiguity in them”.

But it was the radically different mindset of the FLC towards legal services that got the audience to add another resolution, that “the basic feature of the Advocates Act that legal practice is a profession should not be altered in any way”.

For, as state Advocate General Goolam Vahanvati spelt out, “Will foreign lawyers submit to our code of ethics? Or should we change our ethics?”. While in India, advocacy is considered a profession, where soliciting work and giving advertisements is considered improper and below the dignity of the bar, in the USA, you have “ambulance chasers” where lawyers pursue accident victims to persuade them to sue the accused for damages. The lawyer in such cases gives an advance to the victim in anticipation of the verdict and agrees to split the spoils with him on a certain percentage.

“Are we prepared to shed our system and make it a trade? Will we then agree to such contingency fees and share the spoils? Should lawyers then be allowed into jails and prisons to solicit work? Can you do it, I can’t,” he said. He remarked that in this country, there were still lawyers whose visiting cards did not mention their professions.

Neither could “reciprocity” save the deal. “The gates of the Hotel Ritz are open to the rich and poor,” Chandrachud said “but how many poor can step into it?”. Similarly, even if there was reciprocity (USA and UK do not allow Indians to practice, except in special cases, where permission is taken and only after passing their bar examination) could Indians, submitting to the foreign exchange restrictions of the RBI and work permits of these countries, actually set up office there?

Cyril Shroff, a solicitor put it more bluntly. “The FLCs are here for money for the big firms, though it would be only some time before they enter into the litigation process,” he said pointing out that many of the biggest law firms in the USA have funds equal to the annual budget of the state of Maharashtra, and any such entries would gobble up and kill the existing law firms in the country. “Unless you allow the domestic law firms to expand and consolidate themselves, the entry of such FLCs would create a dual regime system,” he said. Among the restraints that has to be done away with are the 20 partners limit laid down by the Companies Act, allowing for more partners and increasing of funding and manpower. “We will need at least five years to be able to catch up with the competition,” he said.