“Half-hearted”, “pressure-driven”: Indian law firms criticise BCI’s foreign lawyer rules

Senior partners from India’s leading law firms, while acknowledging the amended regulations notified by the Bar Council of India (BCI) last month as a long-awaited step toward legal sector liberalisation, have expressed disappointment over the manner in which the rules were introduced..Speaking at a meeting held under the aegis of the Society of Indian Law Firms (SILF), they called the amended rules as “half-hearted”, “ad hoc”, and framed “possibly under pressure” from foreign governments. They also expressed deep concern about the drafting, legality and structural consequences of the BCI’s move.“During the last three, four years, there have been attempts by the Bar Council to come up with half-hearted measures - we don't know, possibly under pressure or whatever it may be,” said one speaker. “But this time, in 2023 also, they came out because of pressure from the UK lobby…There was a big pressure on the from the UK Government to open up the legal services,” they added..Another added:“This whole thing is knee-jerk. It's kind of ad hoc…There is no blueprint. It's just sort of reacting to some statement made by the UK Law Society, then by the FTA, then by someone else, rather than having a consistent, proper, well-considered view.”.While the overall sentiment was one of frustration, a senior partner emphasised the importance of strategic and mature engagement with the BCI, rather than outright opposition.“At a high level, this is a long overdue reform, and we should not challenge it or oppose it, but we must push forward with what we want - which is a level playing field in a very thorough way.”He cautioned that superficial reciprocity may be unworkable and called for detailed attention to how foreign firms could bypass restrictions in practice:“Foreign firms should be confined to foreign law…There are ways of doing it indirectly — what you can't do directly — so I think we should zero in on some of those and plug those loopholes.”Urging restraint and clarity of purpose, he added:“We should act maturely and not in anger — but we must be very determined and steadfast in our request for clarity.”.In a significant regulatory shift, the BCI Rules for entry of foreign law firms from May 2025 explicitly allows foreign law firms and lawyers to enter into joint arrangements with Indian law firms, marking a formal opening for cross-border legal collaboration within India’s regulatory framework.Rule 7(2)(b) of the amended Rules permits a foreign law firm or foreign lawyer “to engage or seek to engage” with Indian lawyers or Indian law firms to appear together in matters such as international arbitration conducted in India. This provision effectively enables joint operations and collaborative representation between domestic and foreign legal professionals, albeit within a defined, non-litigious scope.Furthermore, the BCI recognises “foreign law firms” to include entities such as LLPs, companies, or corporations from a foreign jurisdiction, affirming the possibility of structured professional arrangements with Indian counterparts. Such arrangements may include joint advisory mandates in foreign law, joint representation in arbitration and legal consultancy in cross-border commercial matters.However, the Rules are silent on ownership or equity-sharing caps in these partnerships. There is no express provision stipulating whether foreign firms may hold a majority or minority interest in any joint structure formed with an Indian firm. This lack of clarity raises important questions on control, voting rights, profit-sharing and compliance under the Advocates Act, 1961 and partnership law..One of the most controversial provisions is the definition of a “foreign lawyer,” which participants said fundamentally alters the character of the legal profession in India.“Have you seen the definition of foreign lawyers? It goes against our ethos, our culture and how we regard the legal profession. A foreign lawyer is defined to include a person, a law firm, a limited liability partnership, a company, or even a corporation. So, it is virtually being run like a business entity.”.They pointed out that in countries like Australia and the UK, law firms can list on stock exchanges and accept non-lawyer investment — a commercial model inconsistent with Indian legal ethics.“This is the definition of foreign lawyers. So firstly, are we willing to accept this type of an arrangement, which entirely upsets the nobility of our profession? Because in India, we still regard it as a profession, not as a business."However, it was clarified that while law firms are run at a large scale in India, they always give back to society..The participants warned that the current rules allow foreign firms to dominate Indian legal practice through loosely defined “joint partnership.”“There is no limit on the holding of the foreign law firm in their so-called joint partnership. Effectively, it could mean that they can have 90–95% [ownership] and have an Indian law firm as a partner, and recruit many lawyers and then act in Indian law,” a Senior Partner pointed out.Another added, “There are many, many ways in which foreign law firms, when they come here — alone or in joint venture — can circumvent many of the stated objectives in the rules and actually practice Indian law…They don’t have to do it indirectly. They can do directly what they are otherwise prohibited from doing.”.Participants also warned that the rules appear to favour UK law firms and may exclude American firms entirely.“Even American lawyers are protesting that these rules and regulations, even as they stand, are discriminatory against them and more favorable to the UK law firms.”This, they said, could lead to the creation of “non-tariff trade barriers” and geopolitical complications..Younger professionals also pointed out that while Indian law firms are barred from raising private equity or venture capital, foreign firms are free to scale using such funds.“A couple of venture capitalist funds offered me…They said, ‘Can we put in a million dollars to dial up? We really like your work.’ I said, the regulations don’t permit me to raise venture capital or private equity to dial up.”They added, “Now, how do I compete with them? I cannot. I can't pay my lawyers. I cannot get the best talent…This in itself is not a level playing field.”.Despite their strong opposition to the current rules, the speakers reaffirmed that they do not oppose the entry of foreign lawyers per se. Instead, they called for a lawful and consultative process grounded in Supreme Court precedent, particularly the judgment in Bar Council of India v. AK Balaji.“The Supreme Court itself has allowed fly-in, fly-out. But what constitutes fly-in, fly-out — that is not reflected in these new regulations…Our appeal to the government, to Parliament, to the Bar Council of India is: please, amend the law first to overcome the Supreme Court judgment.”.A major concern raised by SILF members is that the BCI has effectively abdicated regulatory oversight over foreign lawyers operating in India.“The Bar Council of India seems to have washed its hands off so far as disciplinary matters are concerned. They say anyone who commits misconduct — we will not do anything, we’ll refer it to the jurisdiction of the country from where that law firm has come.”This arrangement, they warned, creates a serious accountability vacuum. .The meeting concluded with the consensus that SILF will send a formal representation to the BCI. Although SILF will not itself initiate litigation, the participants acknowledged that others may.SILF President Dr. Lalit Bhasin said, “We are not at all adversarial…But still, one cannot rule out the possibility of some litigation on these aspects…The consensus, in my view, appears to be that the new rules… need a total reconsideration.”He added, “Let us do our part… But nothing fruitful came out. So let’s hope that this time, some sense will prevail.”