Foreign law firms in India: A step forward or a legal dilemma?

Rohit Kochhar, Chairman & Managing Partner of Kochhar & Co., highlights that while the amendments have been introduced with great enthusiasm, it remains uncertain whether changes to the Advocates Act, 1961, are required before their implementation.

A key concern is the lack of a level playing field. Rule 36 of the BCI Rules strictly prohibits Indian lawyers from advertising or soliciting work, including participating in interviews or media commentary. In contrast, foreign firms actively engage in business development through dedicated marketing teams. Recently, the BCI issued warnings to Indian firms against publishing newsletters, classifying them as violations.

These outdated restrictions put Indian law firms at a disadvantage. Rohit Kochhar emphasises that if foreign lawyers are allowed to operate in India, appropriate safeguards must be in place to ensure fair competition without undermining Indian legal practitioners.

Fidelegal Advocates & Solicitors, an Indian law firm, welcomes the BCI's initiative to allow foreign law firms into India, which is expected to drive growth in the Indian legal market and benefit domestic lawyers. However, the firm points out that, according to the Supreme Court's ruling in the AK Balaji case, foreign lawyers cannot practice in India. Under existing laws, only Indian citizens are permitted to practice law.

Therefore, similar amendments to the Advocates Act are needed to ensure transparency; otherwise, the current legal framework may lead to confusion and ambiguity regarding the entry of foreign law firms.

Advocate Sumit Gehlot, Managing Partner of Fidelegal Advocates & Solicitors, further stresses the need for complete reciprocity in the true spirit. He asserts that foreign lawyers should be limited to non-litigious matters concerning foreign and international law. Additionally, he hopes that the BCI will, in the same spirit, address the longstanding concerns of Indian lawyers by enabling them to establish legal practices in foreign countries.

Dr. Lalit Bhasin, President of the Society of Indian Law Firms (SILF), underscores that the amended BCI Rules cannot be effectively implemented without modifications to the Advocates Act, 1961, which currently restricts legal practice in India to Indian citizens. The Supreme Court upheld this position in the Balaji case, and changing this policy without legal amendments could lead to confusion and potential embarrassment.

To position India as a global hub for arbitration and mediation, a robust legal framework, including the Mediation Law, is essential. Dr. Bhasin emphasises that the Advocates Act must be revised accordingly. While India welcomes foreign legal professionals and seeks opportunities for Indian firms to expand internationally, such changes must be introduced systematically and in alignment with existing legal provisions. An amendment remains necessary to address the Supreme Court's ruling in the Balaji case.

JSA Advocates & Solicitors also shared its perspective on the matter. The firm acknowledges that the BCI has formally notified the rules governing the entry of foreign law firms into India--an initiative that has been in development for a long time. This notification helps dispel uncertainties surrounding the future of the Indian legal market. While the impact of these new regulations will become clearer in the coming months, JSA welcomes any governmental initiative that strengthens and deepens the ability of India's legal market to offer sophisticated legal counsel to both domestic and international clients operating in India and abroad, says Vivek K. Chandy, Joint Managing Partner of JSA Advocates & Solicitors.

JSA further expresses optimism that this development is a stepping stone toward broader reforms in the legal services sector. Amar Gupta, Joint Managing Partner at JSA Advocates & Solicitors, hopes that the BCI will, in the same spirit, address the longstanding concerns of Indian law firms, allowing them to expand their global presence.