India’s legal bridge is one of reciprocity, not roadblocks

‘The rules aim to create a cooperative bridge liberalising the Indian legal landscape in a measured manner’
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In May this year, the Bar Council of India (BCI) implemented the Bar Council of India Rules for Registration and Regulation of Foreign Lawyers and Foreign Law Firms in India (hereinafter ‘rules’). While many within the legal profession lauded the rules, a few law firms based in the United States have voiced strong objections, calling the rules a “non-trade barrier” and a “deliberate move to exclude or freeze out” U.S. law firms from engaging with the Indian legal ecosystem.

However, such criticism reflects a limited appreciation of the statutory mandate of the BCI and an inadequate understanding of India’s comprehensive regulatory framework governing its legal affairs. On the contrary, the rules strike a balance by facilitating the entry of foreign practitioners and firms while upholding professional standards and safeguarding the interests of stakeholders within the Indian legal profession.

The criticism

First, it is contended that the rules create a ‘non-tariff trade barrier’ by imposing procedural restrictions on U.S.-based law firms and legal professionals, thereby attempting to ‘freeze out’ their entry into the Indian legal landscape. Second, it is alleged that the interests of the U.S. were overlooked during global consultations preceding the framing of the rules, making it difficult for U.S. law firms and professionals to comply with the stipulated mandates. Third, the requirement to disclose details such as the ‘nature of legal work’ and ‘client identity’ is said to conflict with the American Bar Association (ABA) Model Rules on client confidentiality. Fourth, the regulations governing fly-in, fly-out provisions have been criticised for being inconsistent with the principle of reciprocity, as they impose duration-based, disclosure-based restrictions not similarly applied to Indian counterparts operating in the U.S. Fifth, the contention is that the rules have been introduced as a surprise move, providing no transition period for adjustment, thereby placing U.S. firms and professionals at a disadvantage. Finally, it is argued that the rules could adversely impact U.S.-India bilateral trade and legal engagement, as they may discourage Indian corporations from undertaking transactions involving U.S. laws, owing to a dearth of legal professionals who are skilled in U.S. laws.

A reality check

First, the BCI is not a trade body, but a statutory body to maintain standards of professional conduct and safeguard the interests of legal professionals across India. Second, constitutionally and technically, the practice of law cannot form part of a trade agreement, as it is governed under Entries 77 and 78 of the Union List, unlike entries dealing with trade and commerce under the Seventh Schedule of the Constitution of India. Second, In Bar of Indian Lawyers Through Its President Jasbir Singh Malik vs D.K. Gandhi (2024), it was held that it was a contract of personal service, thereby segregating it from trade and business practices. Third, India recently chose not to include legal services in the United Kingdom-India Free Trade Agreement, despite facing significant international pressure. This reflects India’s consistent position that legal services require a distinct regulatory framework.

Fourth, the impugned rules do not bar foreign law firms and practitioners but liberalise the Indian legal ecosystem, albeit in a structured and regulated manner. For instance, Rules 3 and 4 permit foreign law firms to operate in India, subject to registration and compliance with ethical and professional conditions. Further, the fly-in, fly-out model, under the proviso to rule 3(1), allows temporary visits, subject to an aggregate stay not exceeding 60 days within a 12-month period. Fifth, Indian legal professionals lack universal access to the U.S. legal system and are subjected to rigorous, state-specific, examination-based licensing regimes. The reciprocity requirement under the rules, subjecting the U.S. counterparts to similar regulatory compliances, merely establishes equivalence. Sixth, rule 4(h), which mandates a certificate of ‘good standing at the bar’, has been flagged by U.S. stakeholders as problematic, owing to its decentralised ecosystem. However, this limitation stems from the U.S. regulatory structure and cannot be attributed to the BCI or India.

Notably, rule 6 of chapter III allows for flexibility, empowering the BCI to verify such credentials holistically and on a case-by-case basis, thereby ensuring an accommodating approach, subject to an adherence to basic ethical and professional standards. Seventh, the requirement to disclose the nature and the extent of legal work does not dilute client confidentiality, as the objective is to obtain general information about the legal work or transaction. This ensures that the activities of foreign legal professionals remain within the permitted contours of legal practice in India.

There has been debate and discussion

Finally, the criticism regarding lack of consultations or a transition period before the operationalisation of the rules holds no ground. Debates and discussion have been ongoing for over two decades, encompassing expert committee reports, global consultations, and key judicial decisions such as Lawyers Collective vs Bar Council of India (2009) and Bar Council of India vs A.K. Balaji (2018) which have collectively laid the foundation for the present regulatory framework.

Far from being a barrier, the rules aim to create a cooperative bridge liberalising the Indian legal landscape in a measured manner, while safeguarding professional integrity, client confidentiality, and upholding the vital principles of reciprocity and ethical accountability.

Shivang Tripathi is a Senior Research Fellow at the Faculty of Law, Banaras Hindu University, Varanasi. Shaiwal Satyarthi is a Professor at the Faculty of Law, University of Delhi