A Lot of Anglo
-Article Review by Vaibhav Raina, NLSIU
‘Anglo-American Law Firms Prepare for Indian Assault’, the November 28, 2005 headline of The Lawyer (www.thelawyer.com) screams, and the crux of this fascinating read is that a number of Anglo-American law firms are bullish on India as the destination for their new offices. So much so that Clifford Chance’s famous strategic review this year had a scenario that envisioned the consequences of the Indian market opening up for foreign lawyers. Considering, however, that the other scenarios the review looked at were China invading Taiwan and the US adopting an isolationist policy after being bogged down in Iraq, one cannot help but have mixed feelings towards the possibility of this particular scenario coming true. More importantly, however, a fourth scenario that was considered, according to the article under review, was that the status quo remains the same: considering this, one cannot but be overwhelmed by the positive vibes emanating from the West.
The article under review goes on to speak about how even though most firms are not very clear about the path they intend to take when the market opens up, one thing they are sure of is that in the current global economic scenario, it makes sense to look at India as a strategic investment, rather than as a mere outsourcing hub. Currently, some foreign firms like Baker & McKenzie already have tie-ups with Indian firms, but all these firms are now looking at setting up their own offices in India. Linklaters for one has already formalised its India practice group, and Simmons & Simmons is also launching itself in South-East Asia as a precursor to moving to India.
It is also pertinent to note that there are some Indian firms that are focussed towards foreign markets exclusively (boxed portion below article: ‘The Local View’). This is primarily because of the increasing trend of Indian corporates turning global in their outlook, that is to say, that companies like Tata, Infosys etc. are expanding overseas, and Indian legal eagles are keen to reflect this in their own positioning. An interesting fact that the article quotes is that of Titus & Co., which has a large number of foreign clients and is focussed towards outward growth. Another such firm is Thakker & Thakker, which has 700 clients, all of whom are foreign.
However, the article seems to say, the Indian legal fraternity is none too pleased with this ‘invasion’ of their ‘hunting grounds’. The possible reasons for this cited by the article are the high profitability factor for Indian firms due to the negligible overhead costs. The salaries for Indian lawyers are very low by global standards, property costs, too, are practically zero, and concepts like professional indemnity insurance are non-existent. Thanks to these factors, the Senior Partners of some Indian law firms are better paid than their counterparts abroad.
Ultimately, the article states, it all boils down to the question of when foreign firms would be permitted to operate in India? The answer is entirely a matter of conjecture. It is expected that the WTO/GAAT obligations would open up the market for foreign players, but then again, the article wryly quotes the now-familiar joke ‘In India, liberlization is always just two years away!’.