Liberalisation steps out of the limelight at The Lawyer’s public debate on India
9 May 2011 | By Joanne Harris
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As one of the world’s fastest-growing economies, India is increasingly becoming a focus for investment and a source of capital for foreign businesses.
But there are still hurdles for lawyers to overcome in order to deliver the sophisticated advice that Indian businesses and foreign investors now need on a daily basis. Those hurdles were the subject of lively debate at the third of The Lawyer’s Question Time-style evenings in London last week.
Around 70 lawyers from a variety of backgrounds - in-house, public sector and City, regional, US and European firms - gathered to pick the brains of the expert panel.
Chaired by Law Society chief executive Des Hudson, the panel of Kanga & Co partner Preeti Mehta, Ashurst India practice head Richard Gubbins and UK India Business Council chief executive Richard Heald gave their thoughts on topics as wide-ranging as merger control rights, dispute resolution, anticorruption and the interaction between foreign and domestic firms.
Liberalisation is often the first thing that comes to mind when discussing the Indian legal market, but this proved to be a minor point during the debate. Hudson pointed out in his opening remarks that, although liberalisation is a key topic for the Law Society, “there’s much more to the legal story other than market access”.
The increased complexity of transactions in India occupied much of the debate, raising the question of how firms should work together to deliver seamless services for their clients.
Cost and experience were issues raised by a questioner from US firm Dechert. Gubbins acknowledged that international firms should recognise that they are significantly more expensive than local practices, saying there were “two extremes” in the market.
“I think international law firms generally have to get smarter,” he said. “We have to convince our clients that they’re getting value for money.”
Gubbins predicted that over the next five to 10 years foreign firms would increasingly find themselves working more closely with Indian firms to transfer the know-how and technology needed on cross-border deals.
“It’s only by sharing experiences that you’ll be able to grow together,” Gubbins said.
Heald, a former investment banker, said clients were now more prepared to use international firms and pay for the experience they brought to complex deals.
Mehta agreed, saying: “It’s always better that a foreign law firm’s involved.” She added that, although Indian firms were now more sophisticated and had experience of large transactions, the way they worked was still very different from the methods of foreign practices. “We’re doing too much multitasking,” she said of Indian firms.
The audience raised concerns over the Indian business environment. One was the difficulty of enforcing Indian court orders, with an in-house lawyer noting that the dispute resolution system in the country was still hard to navigate.
Mehta sought to reassure delegates that India was improving this, pointing out that Indian contracts now included dispute resolution and arbitration clauses.
Gubbins agreed that the issue was on the Indian government’s agenda, but referred to Ashurst’s own experiences with the system as an example of how slow it can be. After the firm opened a liaison office in Delhi in 1994 this was challenged by public interest group Lawyers Collective, with a decision finally being handed down 15 years later.
The panel also debated developments in India’s anticorruption laws and the implications for UK companies grappling with the Bribery Act.
The general mood was summed up by Gubbins, who said: “India does seem to me, for all its problems, to be at a tipping point. It’s going to go into a phase where it’s going to be a net exporter of capital over the next 10-15 years.”
He added that India had a strong democracy and an independent legal system. “Can you afford not to do business in India?” he asked.
As Heald said: “India has already arrived on these shores. You can’t ignore the flows coming from India into the UK at the moment.”
During the debate The Lawyer’s international Twitter account, @LawyermagEurope, ran a commentary on the main points raised. Check them out using hashtag #lawyerdebate.