Luthra & Luthra senior partner Mohit Saraf, who was one of the Indian law firm promoters requesting the commerce ministry in liberalisation negotiations to prevent foreign firms from hiring Indian lawyers, said in an interview with Asia Legal Business that if foreign firms open in India, they would only be with a “very small office”.
When asked by ALB about his predictions for 2018, he said: “The Indian legal market will be more mature, with improvements in deal flow, and pricing pressures easing. By the end of 2018, we should be ready for the next level of liberalisation with the markets opening up by then.”
When asked specifically about liberalisation, he implied that foreign firms would not directly compete with firms such as Luthra and that only few would come:
We extensively work with U.S. and UK law firms, and most of these firms have conveyed to me that they will not open an office in India in a hurry. Even if they do open, it will be a very small office to support their International clients, and hence we will continue to work with them closely, and receive on-going referral work.
As we had exclusively reported in September, Saraf, alongside Silf chairman Lalit Bhasin and Jyoti Sagar, the retired founder of J Sagar Associates (JSA), had pressed the commerce ministry – which has led the way in opening the Indian legal market to foreign firms – to only allow foreign law firms’ entry if they were also stopped from hiring Indian lawyers.
Saraf declined to comment when contacted at the time.
That said, Saraf is right that appetites of foreign law firms in India may be limited, as our research has shown.
Most of our sample of foreign firms surveyed earlier this year said they would only open small transactional offices primarily in Mumbai (while 94% of foreign firms surveyed by us said they would not want to open in special economic zones (SEZs), which has been the government’s currently preferred model).
However small foreign firms’ offices are likely to be, however, Saraf and his Silf colleagues are perhaps right to worry that even if small, in staffing those offices foreign firms might very well end up taking several nibbles out of mid- or senior partnerships and senior associate ranks at some firms.
SHUKLA: What the actual impact would be on the Indian legal industry is somewhat unclear at the moment. Given that we already work at par with international standards and our present clientele includes major MNCs and Fortune 500 companies, we do not see the entry of foreign law firms requiring us to modify or make improvements to our internal structure, our style or quality of work.
That being said, we ensure that all our lawyers are updated and aware of all international developments on both legal and qualitative fronts. Although the entry of foreign law firms may spread out business very thinly, the rate at which the Indian economy is growing should generate sufficient work for the entire legal fraternity.
BURMAN: The entry of foreign lawyers in India is a welcome move by the Indian government as it would allow the Indian legal services market to keep up with the diversified global legal industry and would also allow cross border exchange of knowledge, expertise, skill and talent. However, the same, if not done in a seamless manner, may lead to loss of opportunities for local law firms and Indian attorneys.
The entry of foreign firms and foreign lawyers in India will result in the existing competition multiplying manifold. However, many domestic firms will thrive on their competitive prices and quality of service. From our perspective, this has a dual positive construct. Firstly, the market is large enough to address various price points from a service provider’s perspective and the price range for the international firms will find takers only at the top of the pyramid. Secondly, there will be still various avenues of synergies where international firms would seek expertise of boutique firms, both from a time value perspective as well as domain and market expertise perspective.