{"id":348922,"date":"2025-05-28T11:30:36","date_gmt":"2025-05-28T06:00:36","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=348922"},"modified":"2025-06-06T13:38:29","modified_gmt":"2025-06-06T08:08:29","slug":"liberalisation-of-indian-legal-sector-small-step-or-giant-leap","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2025\/05\/28\/liberalisation-of-indian-legal-sector-small-step-or-giant-leap\/","title":{"rendered":"Liberalisation of the Indian Legal Sector: Small Step or Giant Leap?"},"content":{"rendered":"
\n

Anticipating the liberalisation of legal services in India has been criticised as being akin to waiting for Godot. This remark indeed reminds one of the long-drawn journeys which began more than a decade ago in 2009 when the Bombay High Court in Lawyers Collective<\/span> v. BCI<\/span>1<\/sup><\/a> held that India’s Central Bank and banking regulator, the Reserve Bank of India, was not justified in granting permission to foreign law firms to open liaison offices in India. The decision held that even non-litigious matters in India require compliance with Section 29<\/a> of the Advocates Act, 1961<\/a>2<\/sup><\/a>. This meant that even transaction documents could be drafted only by persons who were enrolled as \u201cadvocates\u201d in India, which \u2014 amongst other things \u2014 requires Indian citizenship and a law degree from an Indian university. Following the same trend, the Madras High Court in A.K. Balaji<\/span> v. Union of India<\/span>3<\/sup><\/a> also prohibited foreign law firms and foreign lawyers from practising law in India, both on litigation and non-litigation matters. Both the above judgments were challenged in the Supreme Court, whose decision proved to be the final nail in the coffin. In BCI<\/span> v. A.K. Balaji<\/span>4<\/sup><\/a>, the Supreme Court reiterated that foreign law firms\/companies or lawyers cannot practise law in India. Here, however, a few narrow exceptions were carved out \u2014 the Supreme Court held that there was no bar for foreign law firms or lawyers to visit India on a \u201cfly-in and fly-out\u201d basis for advising Indian clients on foreign law or international legal issues, provided such visits are not on a regular basis. The Supreme Court also clarified that foreign lawyers and firms are not debarred from participating in international commercial arbitrations, provided they comply with the code of conduct applicable to Indian advocates.<\/p>\n

What seemed to be a dark end was met with a slim ray of light in 2023 when the Bar Council of India (BCI) promulgated the BCI Rules for Registration and Regulation of Foreign Lawyers and Foreign Law Firms in India, 20225<\/sup><\/a> (the \u201cRules\u201d). Subsequently, the Society of Indian Law Firms (SILF), while supporting the initiative in principle, made a representation proposing a phased and sequential implementation of the Rules. However, lack of engagement with the said representation flickered the light that had briefly glimmered.\u00a0In fact, a plea was filed before the Delhi High Court in Narendra Sharma<\/span> v. BCI<\/span>6<\/sup><\/a> challenging the decision to allow entry of foreign lawyers and firms into India. This back-and-forth re-emerged through the recent UK-India Foreign Trade Agreement<\/a> (FTA) which, yet again, overlooked the legal industry. Disappointed, Law Society President Richard Atkinson remarked:<\/p>\n

\u201cThis is a missed opportunity for a significant breakthrough in terms of market access for lawyers in both India and the UK. Legal services is an enabling sector, supporting other sectors in their own trade and investment decisions and operations. It is also a part of the high-growth sectors identified in the Government’s industrial strategy. We call on the UK Government to renew its support for legal services trade between the two countries<\/span>.\u201d7<\/sup><\/a><\/p>\n

Perhaps, it was with an intent to resolve this tussle that the BCI sought to amend the Rules (Amended Rules)<\/a>8<\/sup><\/a>. The long-due attempts of liberalising the Indian legal industry, has been welcomed by some of the leading Indian law firms. In our preliminary understanding, international players in the market will not only enhance healthy competition but also boost India’s status as an international arbitration hub. Keeping this in mind, BCI via its recent press release reasserted that the regulatory framework aims to strike a balance between global integration and the protection of Indian legal practitioners. Here, we highlight some key features of BCI’s recent amendments to see if this is a balance well struck.<\/p>\n

Finding the right balance<\/h2>\n

Global integration of the legal market<\/p>\n

(i<\/span>) Opening of legal profession in India to the extent of non-litigious issues<\/p>\n

BCI has opened up the legal profession in India to foreign lawyers and foreign law firms, limited to the practice of foreign law, to handle diverse international legal issues in non-litigious matters which includes legal consultancy, legal documentation, representation in arbitration proceedings and other non-litigious legal activities related to foreign law. This could be made possible post Pravin C. Shah<\/span> v. K.A. Mohammed Ali<\/span>9<\/sup><\/a> which held that rights of an advocate envelope a lot of acts to be performed that extends beyond the advocate’s mere appearance in the courtroom. Rule 8 of the Amended Rules accordingly explains the nature and extent of law practice by foreign lawyers and foreign law firms. It inter alia includes activities like:<\/p>\n

1. Engaging in corporate legal matters such as joint ventures, mergers and acquisitions, intellectual property matters, drafting of contracts and other related transactional work.<\/p>\n

2. Representing clients in both institutional and ad hoc international arbitration cases conducted in India.<\/p>\n

3. Providing legal opinions and advice concerning the laws of their country.<\/p>\n

(ii<\/span>) Indian foreign law firm<\/p>\n

Previously, Indian advocates, as per Section 29<\/a> of the Advocates Act, 1961<\/a>, were the only recognised class of persons entitled to practise law. However, Rule 2 of the Amended Rules seeks to create additional categories of persons (and entities) that can similarly engage in the litigious or non-litigious practice of law. It is interesting to note that while some concepts like Indian Foreign Law Firms (IFLF) are entirely new, others have nonetheless been defined for better clarity. The below table sets out the additional categories of persons now entitled to practice in India:<\/p>\n\n\n\n<\/colgroup>\n\n\n\n\n\n\n\n
\n

Category<\/p>\n<\/td>\n

\n

Description<\/p>\n<\/td>\n<\/tr>\n

\n

IFLF [Rule 2(vi<\/span>)(b<\/span>)]<\/p>\n<\/td>\n

\n

It includes any Indian legal entity (partnership, LLP, company, or corporation) which is authorised to practise in India. Upon registration, these firms cannot only engage in non-litigious practice areas such as foreign law, international law and arbitration (under Rule 8 of the Amended Rules), but also retain full rights to practise Indian law, including litigation (but only through the Indian advocates in such entities). Such firms would enjoy parity with other Indian advocates registered as foreign lawyers.<\/p>\n<\/td>\n<\/tr>\n

\n

Indian advocate\/lawyer who seeks registration as a foreign lawyer [Rule 2(iv<\/span>)(b<\/span>)]<\/p>\n<\/td>\n

\n

Someone who, in addition to being an Indian advocate\/lawyer, is registered as a foreign lawyer gets the right to practise both litigious and non-litigious areas of law. In other words, while retaining their right to represent clients in courts, tribunals, or quasi-judicial bodies, they can gain the additional ability to engage in non-litigious legal practice concerning foreign law and international arbitration matters.<\/p>\n<\/td>\n<\/tr>\n

\n

Indian law firms [Rule 2(vi<\/span>)(a<\/span>)]<\/p>\n<\/td>\n

\n

It refers to partnership, company or any other legal entity that can engage in both litigious and non-litigious practice of law.<\/p>\n<\/td>\n<\/tr>\n

\n

Foreign lawyer [Rule 2(iii<\/span>)]<\/p>\n<\/td>\n

\n

It includes an individual, law firm, company or any other legal entity who is authorised to practice law under the regulatory framework of a foreign country. Such persons or entities can engage in non-litigious practice of law such as legal consultancy, legal documentation, representation in arbitration proceedings, etc.<\/p>\n<\/td>\n<\/tr>\n

\n

Foreign law firms [Rule 2(v<\/span>)]<\/p>\n<\/td>\n

\n

It includes a partnership, company, or corporation that engages in legal work and stands authorised to practice law under the laws of its home country. Such firms may engage in non-litigious areas such as foreign law consultancy and documentation and arbitration on a reciprocal basis.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

(iii<\/span>) Principle of reciprocity<\/p>\n

Principle of reciprocity has been borrowed from Section 47<\/a> of the Advocates Act, 1961<\/a>. It states that if any country prevents citizens of India from practising the profession of law or subjects them to unfair discrimination then India would similarly prohibit persons belonging from that country from practising. Similar provisions can also be traced within the Amended Rules which state that registration would be permitted only for lawyers\/firms from those jurisdictions that offer comparable rights to Indian lawyers. In practice, this means that processes like registration, renewal, nature and extent of practice for foreign law firms and lawyers would depend on reciprocal recognition of qualifications and compliance with rules governing Indian participation in such foreign jurisdictions. In other words, the treatment provided in India to foreign lawyers would be similar to the treatment provided to Indian lawyers in those foreign countries. This would ensure equitable treatment and corresponding obligations for all parties involved.<\/p>\n

Protection of Indian legal practitioners<\/p>\n

(i<\/span>) Restricted engagement of foreign law firms\/lawyers and referral potential for Indian counterparts<\/p>\n

The Rules make it clear that the role of foreign law firms and foreign lawyers would strictly stay confined to non-litigious matters; they cannot appear before courts, tribunals or statutory authorities. By this, while the Amended Rules aim to safeguard the domestic legal market for Indian advocates, they may simultaneously broaden its scope through international referrals. Rule 8(3) of the Amended Rules permits Indian advocates and partners of foreign law firms registered in India to take up matters on \u201creferrals\u201d by their respective foreign law firms \u2014 which is a big concession from the earlier position, and creates a potential market for Indian lawyers who can take up cases involving global clientele, based on references.<\/p>\n

(ii<\/span>) Fly-in and fly-out conditions<\/p>\n

Rule 8(5) of the Amended Rules permit foreign lawyers and foreign law firms to engage in the legal profession on a \u201cfly-in and fly-out\u201d basis, without registration, subject to the following conditions:<\/p>\n

1. The practice is strictly limited to providing legal advice to clients in India concerning foreign law.<\/p>\n

2. Engagement may be procured by the client either in India or abroad.<\/p>\n

3. Foreign law firm or foreign lawyer must not establish, operate or maintain any office, infrastructure or regular presence in India for the purpose of such practice.<\/p>\n

4. The total yearly duration of \u201cfly-in and fly-out\u201d visits cannot exceed a total of 60 days.<\/p>\n

5. Declaration of \u201cfly-in and fly-out\u201d practice must be made in a BCI mandated form and clearly specify the nature of work, legal areas involved, client details and jurisdictions.<\/p>\n

While these conditions ensure that the \u201cfly-in and fly-out\u201d basis for practising law in India is not misused, some foreign law firms have raised concerns about the information that must be shared in these BCI mandated forms. Requirement of extensive data protection laws and confidentiality obligations in foreign jurisdictions may put these firms in a precarious position if required to disclose client-sensitive information.<\/p>\n

(iii<\/span>) Registration<\/span><\/p>\n

Chapter III of the Amended Rules comprising of Rules 4, 5, 6 and 7 explains the registration process. It includes an extensive list of documents that are required for registration. Further, even the fee structure seems more onerous compared to Indian standards. For instance, the schedule prescribes a registration fee of $15,000 for individual foreign lawyers and $25,000 for foreign law firms (including partnerships, LLPs, or corporations) intending to work in India. Further, an additional registration fee is charged for each multiple foreign jurisdiction which includes $5000 per jurisdiction for individual foreign lawyers and $10,000 per jurisdiction for foreign law firms. In effect, foreign law firms intending to have a presence in India would have to shell out the substantial sums of money, depending upon the number of jurisdictions they are qualified and operate in, for their mere establishment.<\/p>\n

Conclusion: Evaluating the future course of action<\/h2>\n

Overall, the Rules seem to strike a delicate balance; by encouraging India’s entry in a globally connected legal arena, while also ensuring that domestic players are not crippled. This can be best seen from instances such as restricting the practice of foreign lawyers to non-litigious matters, while also envisaging the possibility of collaborations in litigation via IFLF and referrals. Further, possibility of improving India’s position as a preferred arbitration hub are other potential outcomes that India is likely to benefit from. While time will reveal how things ultimately unfold, it is certain that the legal industry stands at the cusp of transformation.<\/p>\n

With the liberalisation of the Indian legal sector, while BCI, albeit appreciably, has got the ball rolling, it is still yet to reach the finish line. Admittedly, the Amended Rules put the initial framework in place, but it is also time for some real work to begin. For instance, some of the below mentioned stakeholders ought to take the following next steps forward:<\/p>\n

Legislature<\/p>\n

While BCI has brought in the Amended Rules, the Advocates Act, 1961<\/a> stays unaltered. Amendments are required to be made in provisions such as Section 29 read with Section 24, which still require Indian citizenship for lawyers to be admitted on the State rolls and practice law. In absence of such amendments, the Rules framed by the BCI (which are subordinate legislation), are susceptible to challenge on the ground that they are ultra vires <\/em>the provisions of the Act. Therefore, in provisions like these, some amendments are required so as to permit foreign firms and lawyers to operate and be recognised in India.<\/p>\n

BCI<\/p>\n

At some instances, there are divergent approaches followed in India and abroad. With increasing cross-border engagements, it is necessary for BCI to iron out those differences. For instance, in India, Rule 36 of the BCI Rules states that lawyers are not permitted to solicit work or advertise through direct or indirect means. The rule further includes specific prohibitions on circulars, advertisements, personal communications, and media engagement related to their legal work. In fact, Indian law firms, in the past, have faced repercussions for violating the said Rules. However, there is no such restriction in foreign countries including UK and Singapore, provided the claims are not false and misleading. Therefore, if firms from these jurisdictions were to work in India or if Indian law firms or lawyers were to work abroad it is pertinent that all players operate on a level playing field \u2014 which would not be possible given the existing mismatch. Thus, it is pertinent for BCI to clarify the request by Indian National Association of Legal Professionals who recently wrote a letter seeking permission to advertise overseas.<\/p>\n

Indian law firms and lawyers<\/p>\n

As India opens its doors to foreign law firms, the Indian lawyers and law firms are expected to face an increased competition. While it is too early to predict anything, the future may witness increased collaborations between Indian and foreign law firms where the former benefit from increased global clientele and latter secure a growing presence in India. Further, Indian lawyers, especially those with dual qualifications and foreign LLMs, may find themselves becoming increasingly relevant for global recruiters. That said, it is time for both Indian lawyers and law firms to stay open to the possibilities of global collaborations, competitive thresholds and nuanced practice areas.<\/p>\n

Therefore, while the amendments may well raise the bar, the match is far from over. It demands further time and efforts from various stakeholders including the legislature, BCI and Indian law firms\/lawyers. As such, while the amendments to the Rules are definitely a step forward towards liberalising the Indian legal industry, whether or not it is a giant leap remains to be seen.<\/p>\n<\/div>\n

\n

*Partner, JSA Advocates and Solicitors.<\/span><\/strong><\/p>\n

**Senior Associate, JSA Advocates and Solicitors.<\/span><\/strong><\/p>\n

***Associate, JSA Advocates and Solicitors.<\/span><\/strong><\/p>\n

1.<\/a> 2009 SCC OnLine Bom 2028<\/a>.<\/p>\n

2.<\/a> Advocates Act, 1961, S. 29.<\/a><\/p>\n

3.<\/a> 2012 SCC OnLine Mad 723<\/a>.<\/p>\n

4.<\/a> (2018) 5 SCC 379<\/a>.<\/p>\n

5.<\/a> Bar Council of India Rules for Registration and Regulation of Foreign Lawyers and Foreign Law Firms in India, 2022, dated 10-03-2023<\/a><\/p>\n

6.<\/a> W.P.(C) 1556\/2024<\/p>\n

7.<\/a> Michael Cross, ‘Missed opportunity’: India deal leaves out legal; The Law Society, Available at: https:\/\/www.lawgazette.co.uk\/news\/missed-opportunity-india-trade-deal-leaves-out-legal\/5123197.article<\/p>\n

8.<\/a> Bar Council of India Rules for Registration and Regulation of Foreign Lawyers and Foreign Law Firms in India, 2022<\/a>, dated 13-05-2025<\/p>\n

9.<\/a> (2001) 8 SCC 650<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

by Divyam Agarwal*, Aniket Aggarwal** and Shailja Rawal***<\/p>\n","protected":false},"author":67011,"featured_media":349032,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[20271,71727],"tags":[12381,82603,29483,82605,82600,82601,82602,19511,82604],"class_list":["post-348922","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-experts_corner","category-jsa","tag-bar-council-of-india","tag-bci-rules-for-registration","tag-foreign-law-firms","tag-foreign-law-firms-in-india","tag-indian-legal-sector","tag-legal-liberalisation","tag-legal-reforms-in-india","tag-legal-services","tag-regulation-of-foreign-lawyers"],"yoast_head":"\nLiberalisation of the Indian Legal Sector: Small Step or Giant Leap? | SCC Times<\/title>\n<meta name=\"description\" content=\"This article explores key features of BCI\u2019s amendments to 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