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Som Mandal, managing partner at Fox Mandal, explains why he supports the liberalisation of the Indian legal market.
I completely support the view adopted by the Ministry of Law and Justice in allowing the entry of foreign law firms to the Indian legal services sector to practise foreign law.
It is a common phenomenon in India that prior to liberalisation of any sector, there has been widespread opposition. An example is the insurance industry, wherein some Indian insurance companies had gone on strike in the wake of the sector’s liberalisation.
To date, all the insurance companies have been operating in a highly competitive and level playing field. The legal profession would also prosper in a similar manner in the years to come. We are positive that Indian lawyers will not be afraid to face the competition once the government decides to open its door.
It is claimed that the legal profession in India at present does not want the entry of foreign law firms. It is worrying that India’s commitment to the World Trade Organisation (WTO) to liberalise the services sector received a passing reference by members of the legal fraternity opposing the entry of foreign firms. Since India is a responsible and prominent member country of the multilateral trading system, it must endeavour to abide by its commitment to the WTO.
Another key issue being highlighted is that existing legal talent in India is moving to large overseas firms – the so-called ‘brain drain’. This is totally misconceived, as the entry of foreign law firms would, among other benefits, result in better pay for entry-level lawyers, exposure to international best practices and cross-border transactions, as well as a wealth of opportunities for the 80,000 lawyers graduating from Indian law schools every year.
If one examines why law firms in the US and UK, until recently, used to recruit heavily from countries such as Australia and New Zealand, it would be evident that this was due to the lack of supply of lawyers in their country and also to attract better talents at lesser pay.
However, the law firms in these countries not only survived but found ways and means to grow and compete, and also lured back their ‘lost talent’ from the UK and US firms, thereby stopping, to a large extent, the ‘brain drain’ by providing good opportunities for the young lawyers in their country.
Another major concern is the lack of a level playing field to compete with international law firms. Going by the arguments, smaller law firms should have already failed and the market should have been consolidated and dominated by a few firms. However, the truth is that all firms operating in the market today have managed to consolidate and discover a niche market for themselves.
The third and most pressing concern is that the Indian Advocates Act 1961 does not allow advertisement in any form, either by way of website or listing in professional directories, while such restrains are not imposed upon foreign firms globally. I share, to some extent, this concern but do not believe this cannot be logically addressed.
On a concluding note I would like to state that steps undertaken to pursue liberalisation of the legal services sector are praiseworthy and must be welcomed by one and all in the legal fraternity.
I am sympathetic towards the concerns raised by my counterparts and would stand with them in assisting the Government in addressing the same by adopting viable solutions and reforms. But lobbying for a blanket ban on the entry of foreign law firms in India is nothing short of a selfish manoeuvre to safeguard the vested interests of a few individuals and propagate the ongoing concentration of wealth into a few hands.
Som Mandal, managing partner, Fox Mandal