Indian and UK lawyers have cautiously welcomed the first legislative step towards liberalisation of the Indian legal profession.
The Limited Liability Partnership (LLP) Act 2008 was passed by Indian Parliament at the end of 2008. While the Bar Council of India would need input on the specifics of law firm LLPs, the framework is now in place for the partnership structure to become a reality.
Clifford Chance’s India head, Chris Wyman (pictured), said: “I think it’s a very important and useful step in the process because the Indian government has seen for some time that providing LLPs is one of the building blocks to allowing foreign lawyers to practise in India.”
The Law Society’s head of international, Alison Hook, said the passing of the act has given the society confidence that the issue of liberalisation is moving ahead.
She added: “We know that the Ministry of Justice indicated its intention that it will use the LLP Act to move forward on the issue of the entry of foreign lawyers.”
Currently Indian legal firms cannot have more than 20 partners under Bar Council of India rules and it is hoped that the act will level the playing field between Indian firms and international firms.
J Sagar Associates currently has 15 equity partners, but partner and executive committee member Shivpriye Nanda said that the firm would soon be discussing the opportunities available under the LLP structure.
“Most people are only looking at the bill from the perspective of foreign law firms,” she said, “but it will also provide tremendous opportunities to Indian law firms to grow.”
Hook commented: “It has the potential to be a very important step but I say potential because it’s only the starting point… It’s a necessary but insufficient condition for the market opening.”
Details of the implementation of the act would depend on how the Indian government chooses to produce secondary rules in accounting, tax and other sectors, which Hook said could still take several months.
Much of the legislative progress of liberalisation will depend on the outcome of the Indian elections, which will need to be called by May this year.
Som Mandal, managing partner of Indian firm FoxMandal Little, said he did not expect significant legislative changes to happen this year. “Unless law firms push the BCI [Bar Council of India] to take it forward, it won’t happen,” he predicted.