The Indian Legal Scenario – Diversity in its True Sense

This article was first published in Lex Witness August 2015 issue.

The Indian legal industry has been experiencing changing tides when it comes to new players in the market. On hand we see the foreign law firms knocking on the doors and on the other the BIG4 accounting firms trying to arm-twist their positioning canvas from merely being an accounting firm but a law firm as well. Who had ever imagined the BIG4 could ever be served notices by governing bodies for illegal practice of law; the face of legal advisory service providers in India is undeniably changing.

Current Scenario

On 13th July 2015, Economic Times published:

The BIG4 multinational audit and accounting firms PwC, Deloitte, KPMG and EY have plunged into a fresh crisis in India with the Society of Indian Law Firms ( SILF), the apex body of law firms, filing a complaint against the four firms at the Bar Council of Delhi alleging unauthorized practice of law.

According to the complaint, “by engaging in the unauthorised practise of the profession” the BIG4 firms “have acted in violation of Sections 29 of the Act and Rules aforementioned and are, therefore, liable to be punished with 6 months imprisonment for unauthorised practise of the profession of law liable under Section 45 of the (Advocates) Act.” The complaint has also named the global top brass of the firms, along with other senior India-based officials.

In response to email queries from ET NOW, Deloitte Touche Tohmatsu India Private Limited said, “We are in receipt of a letter from the Bar Council of Delhi and shall respond to it in due course. We remain committed to compliance with the applicable rules and regulations that govern us”.

KPMG responded saying, “KPMG confirms receipt of the notice from The Society of India Law Firms. The Firm would respond to the notice appropriately. KPMG in India is committed to operate as per the highest professional standards and all our activities and service to our clients are as per the applicable laws and regulations.

An EY spokesperson said, “We confirm receipt of the said notice. The EY organization is fully committed to upholding ethical behaviour and to conducting our business in accordance with the law. We will be responding to the notice appropriately.”

PwC said, “In India, PwC does not have a law practice and nor does it own or operate any Law Firm. Thus, we have not contravened any law including the Advocates Act 1961. In consultation with our external Lawyers we will be filing our appropriate reply.”

After vehemently opposing the entry of foreign law firms in India, SILF has now opened up to exploring a phased out entry strategy for them. In a recent interview with Business Standard, Lalit Bhasin, President of SILF commented on the change in stance saying, “India at that point of time was not ripe for opening up the legal services sector to the foreign firms. Our stand was we have to prepare ourselves, and for the past 20 years we have been opposing the entry of foreign law firms. These 20 years have given enough time to Indian legal profession – particularly the law firms – to strengthen themselves, to become technologically competitive and have more skilled manpower and resources. There has been growth, led by young people, working out of the metros.

But the entry of foreign law firms should be in a phased, sequential manner, starting 2015. This also coincides with the efforts of the government to have a dialogue with the legal profession for opening up the services.”

He recommends that the first phase should be geared towards opening up the sector to information dissemination. Following which certain reciprocity agreements with different countries should be explored, as currently, India has limited reciprocity in recognition of certain law degrees.

As a sign of positive development from the Indian government in January of this year, an inter-ministerial group, chaired by the Union commerce secretary, had proposed a two-phased road map for the opening up of the country’s legal services. This includes removing restrictions on domestic law firms over permitting them to issue promotional firm brochures, open websites, and more.

The ministry also proposed that the second phase will see change in regulations that will facilitate allowing foreign lawyers to practise international arbitration and mediation services in the country on foreign and international law. Next on the line will be opening up of non-litigious services in Indian law for foreign firms.

Are You Ready?

Irrespective of whether the country opens its doors to foreign law firms, or other professional services firm take engage in practice of law, it is more prudent now than even, to conduct your own practice’s health check.

Following certain steps can help any law firm, irrespective of size or availability of resources (time and money), compete effectively for the attention of clients and referral sources in this ever growing competitive market:

Review your business plan – Applying a results-oriented approach forces you to quantify expected financial growth. Benchmarks must be established to measure the business plan’s effectiveness.

Reassess your priorities – Before committing to new branding and positioning endeavours, step back and thoroughly assess your current initiatives. Address some of the basic questions like; who is your target market, what is your current brand, identified niche practice and specializations, annual budget for branding and positioning, your measurement metrics, and the ROI on the initiatives you undertook in the past.

Evolve consistently – There is an inevitable need to consistently keep evolving with the changing industry needs and circumstances, by exploring the unique qualities that differentiate you from your competitors. A strategically positioned law firm resonates with us in a significant way, and create its own individuality.

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