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Will India Open Its Borders to Foreign Law Firms?

We've posted previously on the huge market for legal process outsourcing providers in India as well as on firms trying to position themselves for business opportunities should India open its borders to foreign firms.

Along this same theme, last week's issue of The Economist carried a detailed story about the Indian legal market. (H/T Blog of the American Constitutional Society.)

As we've noted previously, India does not permit foreign firms to open offices within the country. Though the prohibition has been in place for nearly fifty years, back in the 1990s, Ashurst, a British firm, Chadbourne & Parke and White & Case apparently perceived some ambiguity because they went ahead and opened offices in India. The Indian lawyers sued and last week, India's High Court judges were due to hear argument on how the rule should be interpreted.

So why don't Indian lawyers want foreign firms playing on their turf?  Quite simply, they fear the competition -- a fear that seems well-founded, given existing regulations that apply to Indian firms. As the Economist article describes:

Strict rules have stymied growth while other firms around the world have been able to develop into global organisations. Indian firms are not allowed to have more than 20 partners, cannot advertise their services via websites, and cannot even give someone a business card unless it has been specifically requested. The big global firms, with their vast resources and long experience of international transactions, make fearsome opponents....Litigators, who make up the majority of lawyers in India, are concerned for other reasons. They occupy an important position in Indian society as the guardians of democracy and are associated with independence from the old British Empire.

In the meantime, global firms aren't just waiting around for the doors to open. Many are heading to Indian law colleges to pick the cream of the crop. Firms will employ these Indian graduates at their existing offices overseas, with the hopes of sending them home to run India-based offshoots if and when the legal market opens up.

Posted by Carolyn Elefant on May 8, 2008 at 12:37 PM | Permalink | Comments (0)

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