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Influx of foreign law firms: Boon or Curse
In the beginning, the legal processes consisted mostly of low-end transcription work along with other related jobs. But now a typical LPO includes writing software licensing agreements, communicating with clients, drafting of patent applications etc.
PRESENTLY THE legal process outsourcing sector in India is in its boom. It has been observed that the growth of such outfits in India and other low-cost destinations is phenomenal. Therefore, it is hardly surprising that the foreign law firms are interested and are keeping a sharp eye on India on the hope to tap the market and carve out a niche by opening their shops.
After so many years of resisting to allow foreign law firms to open their offices in India, the government seems to have somewhat softened. This likely move will enable these firms to establish their offices here. India has got a tremendous potential to become one of the world's great legal centres in the coming century.
However, it should be noted that legal process outsourcing (LPO) caters only to the offshore legal market and there is nearly no accompaniment for legal services within India itself. As most of the Indian lawyers practice individually or comparatively in small firms and much of their work is litigation, they seem to be somewhat scared of being invaded by the big corporate Western law firms.
Moreover, there are comparatively less Indian corporate law firms. If there is an influx of foreign law firms, they will need expertise of Indian lawyers to support their daily proceedings. The former provide qualitatively competitive services in a cost-effective manner and they would need to hire Indian lawyers as their employees in India and as counsels to appear for them in the Indian courts.
Being a signatory to the General Agreement on Trade in Services (GATS), India is under an obligation to open up the service sector to the member nations. Law is considered to be one of the services that is included in GATS. After the liberalisation and globalisation policy that started in the beginning of 1991, multinationals and foreign corporations have entered India. With foreign investment pouring into a rapidly growing economy and Indian businesses conducting more foreign transactions, India is an extremely attractive market for overseas law firms.
Foreign financial institutions and business entities are also entering India in large numbers. Here their business transactions are governed by the Indian law, which the former are not fully conversant with. They require the assistance of Indian lawyers.
Further, exposure to foreign law firms can only be advantageous and we as a nation stand to gain immensely from the resulting arrangement. Presently there is a huge potential of legal market in the field of emerging laws concerning cyber law, space law, international commercial arbitration, mass torts, etc. To tackle these situations, if these firms are present in India, they can guide their Indian counterparts better and quicker, in relation to their investments outside India.
LPO is a fabulous opportunity for lawyers who desire to work in a corporate structure like other blue-chip companies. In the beginning,these consisted mostly of low-end transcription work along with other related jobs. But now a typical LPO includes a huge range of legal processes, like writing software licensing agreements, communicating with clients, drafting of patent applications, legal research, litigation documentation, and so on.
Moreover, working with an LPO can give an individual, global exposure and a good career path. Most of the lawyers are likely to get best working environment with better job satisfaction in the area of Legal Process Outsourcing. One of the advantages is the increasing number of job opportunities for law school graduates in India.
The in turn would affect the Indian law market will surely be affected in this move. Most of the Indian law firms will have the likely option to go for collaborations with the foreign firms or might eventually merge with Indian divisions of foreign law firms. They would not be able to continue independently. It would also bring reforms in the legal and judicial system.
Lawyers graduating from newly set up national law schools are now "ready to compete" with those from other nations. There will be an upgradation in the quality of services to clients, and the time of transaction will be comparatively less. As 20% of the world's lawyers are Indians, the nation is emerging as a booming market in this field and has got rich potential to lodge the future lawyers. If foreign law firms are allowed to practice in India or to render legal assistance/advice, there should be a reciprocal arrangement, whereby the Indian lawyers will be allowed to practice in those foreign countries. If Indian government is to open up the legal market tot foreign law firms, it should seek reaction from the foreign countries on a reciprocal basis, so that Indian lawyers can also work and settle down there, if needed.
It should also be noted that there will be likely monopolisation by large foreign law firms in different aspects. Moreover, there will also be paradigm shifts in the legal sector and probable collapse in the structure of professional ethics mainly due to the possible conflicting practices ahead. But if the Indian government allows the foreign law firms to practice in India, the profession is likely to become a business, which may not hold good in some aspects. So, it can be perceived that the Indian lawyers are not worried about the competition. But it is the custom and morality of legal practice here that has been developed over past several years, which is thought to get affected.
The need of the hour is to remain positive about the future and what it holds for a liberalized legal sector in India. How opening up to foreign law firms and lawyers are advantageous only remains to be seen in the near future.The Law Commission of India should appraise the situation and there should be country-wide debated over the issue. The outcome of the debates will provide some measures in protecting Indian legal services sector. In the process of globalization, the Indian legal market opening up to foreign firms is somewhat inevitable in this situation. There should be Strength, Weakness, Opportunity, and Threat (SWOT) analysis in this field to find out the feasibility of profitability by Indian lawyers.
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