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
Opening up of Indian legal sector
Your articles come in as a breath of fresh air as compared to the largely vitriolic outbursts of other interested parties.
Its surprising that the people who are opposing the move do not credit the wisdom of the readers to figure out the real reasons for their opposition.
With the Indian economy booming, too much monetary interest is at stake and it looks like the interested parties have successfully lobbied at all levels to ensure a delay in the opening up of the sector.
Who stands to loose? The young Indian lawyers who will be deprived of opportunity to get the right training and Indian corporate sector who will have to end up paying foreign exchange to get legal services abroad for large and/ or international deals (since they will not perceive Indian lawyers to have the necessary skill sets or experience).
In the long term it is most beneficial for the Indian economy to have world class Indian lawyers, sitting in India and giving competition to the foreign lawyers. This is possible only if India gets exposed to the international best practices.
Foreign law firms in India
Allowing foreign law firms to operate in India brings to mind a cartoon published in the Hindu during the wake of the Bhopal Tragedy. The cartoon depicted a bunch of American Lawyers as vultures hovering over the dead and dying in Bhopal. The $ sign was everywhere.
If foreign law firms operate in India, frivolous law suits will be filed – too hot a coffee at Mcdonald’s, mental retardation/cerebral palsy and any other unexpected life events – all a legal reason to be compensated. Foreign Law firms should not practice civilian law but definitely can deal with foreign affairs.
Re: Frivolous law suits and foreign firms
Dear Rita, regarding your comments, please be assured that no such thing can happen in India, even if the foreign firms were to set up shop in India. Our laws, unlike American laws, will not permit such frivolous law suits to be filed or to be successfully contested. Believe me, if our laws permitted this, we Indian lawyers would have perfected the art of frivolous law suits long back. In any event. Please do not fall prey to such propaganda which is aimed to solely let the Indian legal market be controlled by a few dynasties.
Frivolous law suits in India
Referring to Rita’s comments and the cartoon published in THE HINDU, I can vouchsafe for the fact that when I practiced law in Bangalore almost 30 years ago, similar ‘ vultures’ were existent, preying on road accident victims, minor traffic violators etc.
Despite having ‘frivolous and non-frivolous’ suits, foreign law firms should be allowed into India, as they may concentrate more on corporate, commercial and IP work than on matters involving litigation. They will bring a lot more cross-border transactions and expertise.
Probably the best way to move forward is to allow the foreign firms to provide legal services in all branches of law except litigation where ‘ hiring’ a local (meaning Indian) lawyer should be made mandatory.
Opportunities for Indian Lawyers
Hello All,
Perhaps I am writing a little too late on this topic, but nevertheless I felt compelled to share my views.
I am taking a PG course in Law from the UK and I can assure you, no-one likes to hire Indian lawyers in the UK, and the predominant reason being that English firms are not allowed to practice in India. The same disadvantage befalls Indian qualified lawyers everywhere in the world.
Having said that, I am of the strong opinion that the Indian lawyers need a larger exposure and expertise, especially in the commercial legal practice.
The west, especially US and Europe are making tremendous advance in the field of commerce, and India is still trying to catch up. Their transactions are highly complex and specialised, and lawyers in India must get the feel of international legal practice, in order to become a global force to reckon with.
I completely agree with Mr. Mandal above, and the only way to breed healthy and competitive legal services is to compete globally. India is poised to become a global super power and we must adopt appropriate approach towards our policies and conduct. Protectionism is not healthy, we are now in a world for the “survival of the fittest”. Lets become ‘fitter’, shall we?
Regards.
Foreign lawyers—- Indian lawyers
Dear All, Som mandal has been in practice for donkey years now… and the system is not new. Also… just because he has opened office in london does not mean the market should be opened up. Like all other sectors West wants to have the pie in the legal field. Also… its simple economics… nothing…
if we feel we don’t want to share we don’t…. lets have that freedom ….
Whom are you protecting?
It is extremely ridiculous to see how thousands of lawyers working in an ‘unorganised sector’ i.e. legal profession in India are strongly protecting 5-6 individuals owning so-called law ‘firms’ in India and thereby axing their own careers.
These owner individuals do not have any system, even for a namesake, in their ‘firms’. In the name of support staff, they only have one long-serving loyal unqualified accountant to count their beans.
Pl dont talk about HR system or even a team system or any meaningful organisational or decision-making structure or appraisal and people-development mechanisms.
These things will definitely take away the monopolies of these 5-6 individuals. No surprise, then, that these individuals are saying that international law firms will emasculate the Indian ‘firms’ (read ‘these individuals’).