Liberalization is essential

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Business Law Journal, letter to the editor

Dear Editor,

Deregulation will be essential to the continuing development and growth of the Indian legal profession, and for India to realize its aspiration of becoming one of the major global financial centres.

While we can appreciate the resistance from Indian legal professionals to opening up the market, given the multitude of regulations that potentially create a non-level playing field, these structural issues can be, and are in the process of being resolved. Further, there is no reason why these issues cannot be resolved in tandem with the opening up of the legal market.

Permitting Indian law firms to affiliate with international law firms in a true economic sense (as opposed to just formal best friends or referral relationships) will better facilitate the sharing of best practices that international firms have developed over decades of work in jurisdictions around the world with their Indian affiliates. Further, similar to Indian corporates that are searching the world over to find accretive companies that will enable them to diversify their revenue base and obtain the best technologies and practices, Indian firms can diversify their revenue base and sources of best practice through affiliations with international firms.

International firms would introduce world-class precedents that their Indian counterparts may adapt and apply locally, together with the necessary training. When there are deals requiring specific expertise or that involve novel structures that may be new to India, firms will not need to reinvent the wheel but will have access to knowledge gained in other jurisdictions. Similarly, new and novel structures used in India can also be imported into other countries and the learning process will clearly not only happen in one direction. Further, through global networks such as ours, Indian lawyers will be better connected with their counterparts and clients outside India.

Liberalizing the market will not displace Indian lawyers but rather create more opportunities. This has been amply demonstrated by the burgeoning market and the competition for Indian talent. Further, a large percentage of Indian lawyers are litigators whose practice should not be significantly affected by any liberalization of the legal sector, as it is highly likely that foreign firms would not be permitted to appear in local courts, nor do most of them desire to.

Observing countries like Singapore and China, liberalization has enabled them to better attract and retain high-quality talent, thus improving and enriching the legal landscape, which in turn has brought these countries significant economic benefits. As a founder-member of the WTO, India is obviously an advocate of open markets, and liberalization of the legal sector will reap benefits similar to those experienced by the opening up of other sectors.

As India becomes more globalized, law firms that are attuned to market developments locally and globally, and are able to operate across boundaries and multiple practices with natural ease and sophistication, will best serve the business interests of their Indian and international clients.