(The author is a Reuters Breakingviews columnist. The opinions
expressed are his own)
By Jeff Glekin
MUMBAI Feb 24 (Reuters Breakingviews) - Forget flying
doctors -- India has just given the green light to flying
lawyers. Foreign practitioners can now work out of their hotel
rooms without fear of being arrested, so long as they stick to
international law and observe a "fly in fly out" principle. This
clarification is overdue. India can gain much more by relaxing
the rules further.
India's ban on foreign lawyers was drafted in the 1960s to
protect domestic lawyers. Foreigners are still forbidden from
setting up shop. In practice, they already meet with clients in
hotels, host seminars and participate in arbitration. A ruling
on Feb. 21 makes that official.
The remaining curbs could stunt rather than help native
firms. Lawyers like Zia Mody, Cyril Shroff and Rajiv Luthra are
among the world's highest paid, and their three firms dominate
the domestic market. But Indian executives complain of slow
service, insufficient scale and a lack of specialism. For large
transactions, corporates end up looking overseas, and young
lawyers prefer to work in London, New York and Singapore, where
salaries are higher and firms less family dominated.
In the 1980s India's industrial giants violently resisted
liberalisation. But it was foreign competition that spurred the
likes of Tata and Birla to become world class.
And so India misses a trick. With democracy, a common-law
heritage, and a low-cost, high skilled services sector, the
country could be Asia's leading legal hub. In China, where
foreign law firms can open offices, the result has been a rising
generation of highly skilled, internationally minded local
lawyers, many of whom later opt to return to local firms.
The opening of the sector would also be a useful bargaining
chip for India to play in ongoing Free Trade Agreement talks
with the European Union, where the EU wants to see a freer
Even without big reforms, the system is changing slowly. New
firms are trying to break the dominance of the big three
partnerships. But it's not easy for small law firms to raise
capital for growth on their own. India has become a world
leading services hub. Its legal services sector could lead the
-- An Indian court ruled on Feb. 21 that foreign law firms
could advise on international law and take part in international
arbitration while in the country. It said that visiting lawyers
could work on a "fly in fly out" basis.
-- In its ruling, the Madras High Court in Chennai rejected
a petition filed in 2010 by a local lawyer who accused a group
of foreign law firms of illegally practicing law in violation of
India's Advocates Act, which governs the country's legal
-- Foreign law firms cannot open offices in India, advise on
Indian law, or appear in Indian courts. The 2010 petition
targeted other activities such as meeting with clients in
hotels, hosting seminars, and participating in arbitration.
-- For previous columns by the author, Reuters customers can
(Editing by John Foley and David Evans)