Does the legal field show that India is globalised?
After the New Economic Policy was rolled out by the government in 1991, the country made commitments for a liberalised, globalised and privatised economy.
The reforms aimed at competitiveness, innovation and expertise. In light of such reforms, the researcher aims to look at the developments in the legal field which has social, political and moral implications. As such, this field has a plethora of implications if any developments happen. For this reason, the developments and implications of reforms in this field have to be carefully understood.
In pursuit of finding answers to the question of globalisation in this profession, the researcher analyses the precedents and provisions for practice oflawfor understanding the qualifications and restrictions in this profession. Cues are also taken from developments in similar professions as well.
The sensibility as far as competition in the legal profession is concerned; continues to remain xenophobic and protective. Its restrictive stance on allowing foreign law firms to practice in India substantiates such xenophobic attitude. As such, India may have become globalized in many arenas, but legal profession is not one of them. The restrictive stand is also identified by two leading advocates of the Indian bar, Mr. Harish Salve and Mr.Gopal Jain. Standing in dissent of the Supreme Court’s decision, they remarked :
“If 20 global law firms hire 2000 youngsters from India whose future are we stealing”-Salve
“If foreigners are allowed to play cricket in India why not practice law?”-Jain
“Fiat justiciaruatcaelum: to spirit of competition or corpus of protectionism”
The maxim says justice be ensured till the walls of heaven fall. This refers to the eternity of justice to be ensured to everyone. There is need to understand whether the possibility of threat should avoid globalisation to permeate to the profession or should the needs and benefits of globalisation be understood. The following section seeks to understand the answer to this question.
The provisions as to practicing in India are provided in the Advocates Act,1961. There is a condition of being an Indian Citizen and being enrolled in state bar associations for practicing law ,reciprocity in home country of the foreign lawyer to recognise Indian lawyer and the liberty to frame rules for non-citizens to practice in India are restrictions that the statute places on the profession.In the present times, there have been three landmark cases in this regard.
In the first case, Lawyers Collective v Bar Council of India, legal profession was propounded to be different from commercial activity. RBI was not justified in granting the foreign firms, entry to India to open liaison offices in India. This case highlights the rationale of court in not taking the reforms to apply in legal profession the way it applies in commercial activities.
In the second case, A.K. Balaji v Government of India,the Madras High court held that lawyers can be allowed on “fly in and out basis” and also for international commercial arbitration. As such, it relaxed the restrictions a bit with this exception.
In the third case, the Supreme Court in Bar Council of India v A.K. Balaji&Ors., upheld the verdict of Madras High Court regarding the “fly in and out” doctrine. The case allows for limited liberty to be given for practicing the profession outside home country.
All the above provisions and developments imply that the legal profession has not being receptive to globalisation. It’s an irony that India has been a member of GATS (General Agreement on Trade in Services) and has taken up various steps for fostering trade in services like: insurance, banking, engineering, software etc. But sadly the steps in furtherance of legal services and its liberalisation and globalisation have not been taken in tandem. This also means that the precedents on the entry of foreign law firms are in opposition to the GATS Agreement to which India is a signatory.
It is noteworthy that the country restrictive to Google, Snapchat, Instagram and Facebook i.e. China also liberalised the legal sector in restrictive ways. It allowed only representative officers with two years of experience but excluded the field of only Chinese legal affairs.
As far as India is concerned; linguistic, psychological, semantic, regional and sentimental barriers are enough to avert the firms coming into the domestic country for international collaboration. The moral and social arguments are taken in direct relation to the ‘nobility of the profession’. Because the legal service sector is underestimated to be of low addition to FDI and GDP, the reforms might have been ignored. Moreover,it could be considered politically motivated. The goals of liberalisation have been to foster competition, innovation and economies of scale and our experience post-1991 has countered the idea that liberalisation will lead to monopolisation, unaffordability, and unemployment. As such, the challenges and threats to reforms are not the way they were contemplated.
The business houses and corporations prefer to have lawyers with expertise in issues like international law, intellectual property rights etc. to be represented in international suits in India. The domestic practitioners conventionally stick to the bar and do not offer extensive practice on these contemporary issues. Hence, they find it hard to defend themselves without lawyers of their choice. As part of ways to counter these restrictions, many lawyers have started living on borders as natural persons -individuals, professionals and even partners of a foreign law firm. This again illustrates the need for globalisation in the field.
The Madras High Court identified that lawyers should have expertise in foreign law in this age of FDI and foreign companionship. In yet another similar case regarding capital gains , the Supreme Court held that an international commercial arbitration centre is important for overall economy. As such, the field is demanding the reforms to cope with the dynamic environment which is interactive in nature.
Developments in similar professions
Health and justice are considered to be essential social needs. Both of these fields have practical pedagogy, qualifying exam to practice, professional ethics, code of conduct & consultancy as a way of practicing. These are the similarities between the two professions and hence the way foreign practitioners have provisions of practice in India, legal profession can imbibe those as well. To practice medicine in India, an Indian citizen has to qualify a screening test given that s/he has qualified the practitioner test in that different country. Foreign doctors visiting India for a short duration of time also require permission from the Medical Council of India.
There is only one lawyer for 886 non-lawyers and 3.3 crores pending cases in Indian courts. Hence, there is a need to expand the spectrum of legal practitioners. As such, provisions similar to the medical profession can be made for legal profession as well. All India Bar Exam provides ‘certificate of practice’ to the passing candidates as the entry to legal practice. In a similar manner, foreign practitioners and firms can also be tested by a basic screening test.
As far as consultancy, expertise and experience are concerned, audit firms follow the legal profession. In the latest amendment, FDI guidelines for audit firms were relaxed. If the investor wants a foreign audit firm, joint audit can be carried in which one players should not be international. This provides domestic firms safeguard and opportunity. This model can address the threats and opportunities simultaneously.
Conclusion and the way forward
The researcher believes that foreign law firms should be allowed to practice the legal profession in India. The mode of entry can be certainly guided by a few requisites as they exist in other similar professions. For years together, the domestic players have been protected from the sort of competition that could have been there.
However, to ensure equitable opportunities to both these players, the BCI must relax the rules in a phased and justified manner. As the need to allow international arbitration was felt and foreign firms were allowed in this area, other arenas can be introspected as well. In the researcher’s opinion, such a process should be in phases. In the first phase, intellectual property rights, human rights, corporate law, immigration law can be globalised. This is because these areas are related to international collaboration because they deal with issues in other jurisdictions as well. In the second phase, consumer law, cyber law, computer law, space law etc. can be liberalised and globalised.This would ensure excellence and precision in these contemporary areas which are coming up in recent times. And lastly, the traditional areas-civil, criminal and family law could be taken up. This will ensure that the legal profession gets globalised in a wholesome and phased manner. This stratification is based on the hierarchy of reforms needed in the current times. The researcher agrees to the argument about justice being important than competition and the threats that could come to the society if the reforms are carried out irresponsibly. The phased process will uphold the morality and societal argument in the field along with contemporary discourse. This would bear the fruits of economic policy and ensure opportunities to all.