lawyers in India

Changing Face of The Legal Profession In India In The Era of Globalization

Written by: Adv.Swapnil Joshi
Environmental law
Legal Service
  • Today mankind is entering a new phase of history made distinct by globalization which is cutting across all previous barriers and boundaries - Dr. Adimola O. Popoola

    Globalization must not be viewed from the restrictive sense as it connotes the process of making global, being present worldwide. It has brought to the force universalisation of diverse issue of commerce, production, consumption, trade and information technology. The increasing interdependence of the countries of world and integration of domestic economies with the world economy has its effect on each and every sector of the developed and developing countries alike.

    Globalization can also be seen from different perspective as the growing interdependence and intensively of interaction among nations and about the Nation State coming under pressure, from transnational phenomenon and so on .
    It has been defined as the broadening and deepening linkages of national economics into world market for goods capital and special services . The concept of Globalization has brought about a growing tendency towards the universal homogenization of ideas, cultures, values and even the lifestyles. Needless to say can the legal service and the legal profession remains unaffected by this changing world order?

    The Present paper attempts to analyze the impact of globalization on legal profession in India.

    The Legal Profession in India
    India has the worlds second largest legal profession with more than 600,000 lawyers . The predominant service providers are individual lawyers, small or family based firms . Most of the firms are involved in the issues of domestic law and majority work under country’s adversarial litigation system. The conception of legal services as a ‘noble profession’ rather than services resulted in formulation of stringent and restrictive regulatory machinery. These regulations have been justified on the grounds of public policy and ‘dignity of profession’ . The judiciary has reinforced these principles, which can be reflected in words of Justice Krishna Iyer, when he noted, Law is not a trade, not briefs, not merchandise, and so the heaven of commercial competition should not vulgarize the legal profession. However over the years courts have recognized ‘Legal Service’ as a ‘service’ rendered to the consumers and have held that lawyers are accountable to the clients in the cases of deficiency of services. In the case of Srinath V. Union of India (AIR 1996 Mad 427) Madras High Court held that, in view of Sec. 3 of Consumer Protection Act, 1986. Consumer redressal forums have jurisdiction to deal with claims against advocates. Sec. 2 (U) of competition Act, 2002 defines the term ‘Service’ along the lines of consumer protection Act, 1986. Thus it may be concluded that legal services are becoming subject of trade related laws where consumerism and market forces should be given adequate space .

    Changing Face of Legal Profession
    Globalization brought about a revolution in international trade with increasing participation and involvement of countries & greater access to domestic economies. The implication of the same on the legal service sector has been both quantitative and qualitative. The past decade has been mini-revolution in legal service sector with the greatest legal impact on corporate legal arena Activities in project financing, intellectual property protection, environmental protection, competition law, corporate taxation, infrastructure contract, corporate governance and investment law were almost unknown before 90’s. Number of Law firms capable of dealing such work was very few . It is evident that need of professional service has been tremendous in the legal service sector. In last few years Law Firms, in house firms and individual lawyer’s expertise in providing legal services in corporate sector has increased by several times. These new Law Firms primarily engage and loan instrument, writing infrastructural contracts, power contract, drafting of project finance, contracts, finalizing transnational investment, joint venture and technology transfer contracts. This is discerning shift in the disposition of emerging legal sectors towards settling disputes through ADRS rather adversarial litigation mode of dispute resolution Globalization has thus expanded the internal and external demand for legal services . Today in legal services is on inevitable fact. At the same time significant for progressive development of legal profession in India in this era of Globalization.

    Legal Service Sector
    The term legal services sector is completely, different type of services as compared to software programming, medical practice or other professional services. Though it is more or less protected from intrusion due to the fact that its traditional base is derived not only from statutes and the existence of statutory bodies but also from conservative and traditional mind set that inhibit development of cross border services supply. Even globally the legal services sector is necessarily shackled by jurisdictional constraints such of the requirement for a degree from the country where the service is to be imparted. Some local considerations apply only to certain aspects of legal services and not to others. Where the local considerations are important they must be preserved and exceptions made, must only for global market access. Thus on the one hand there is the need to be part of a global fraternity and to make beneficial commitments that promote trade in services and on the other hand there is need to preserve national interest.

    Foundation of Globalized Legal Services
    World Trade Organization (WTO) is the successor of the General Agreement of Tariffs and Trade (GATT), which ruled the world between 1960 and 1993. both Co-existed between 1994 and 1995, when WTO came into existence. Services are brought for the first time under multilateral trading system under the Uruguay Round Agreements launching WTO. Earlier the GATT System confined only to goods trade. The inclusion of services under the WTO in 1995 is a reflection of growing share of services in national economics world over. It is on indication that trade in services is set to play on all important role in the economic development of countries in future . The ‘developed’ west Economics are specializing in knowledge based service and this GATS entered the WTO agenda in 1995 . It is among the WTO’s most important and the first and only set of multilateral rules concerning International Trade in services. It was negotiated by the Governments themselves and set the framework agreement containing general rules and disciplines and the national schedules, which list basic commitments on behalf of individual countries. As with the GATT, GATS serves to create a Most Favoured Nation (MFN) status for members of the WTO through specific commitments that allow non-discriminatory treatment to be given to foreign suppliers from overseas. Members have complete freedom to select which services to commit and while granting access a country may however limit the degree to which foreign services provider can operate in the market. Thus, it is possible for a country like India to limit the number of foreign legal practitioners who may be licensed to practice here. But it goes much further than that. A whole range of non-tariff barriers exist which countries may either commit to remove, dilute or otherwise restrict in their operation so as to create a more friendly trading environment within which services can be provided across national barriers. GATS achieves its objectives following basic GATT principles using. Most Favoured National treatment under Article II and XVII respectively while aiming to reform markets and yet allow special and differential treatment for developing countries. The two excepts to GATS are-

    (i) services provided to the public in the exercise of governmental authorities and,
    (ii) in the Air transport structure, traffic, rights.

    GATS provides for trade in services through four different modes which are defined in paragraph 2 of Article I.
    a) From the territory of one member into the territory of any other member.
    b) In the territory of one member to the service consumer of any other member.
    c) By a service supplier of one member, through commercial presence in the territory of any other member.
    d) By a service supplier of one member, through presence of natural persons of a member in the territory of any other member.

    The GATS schedules refer to each of these modes and all commitments are made accordingly.

    GATS classification & Legal Services
    There are 12 sectors classified by GATS for which commitments may be made one of them is Business Services. Business Services is further divided into 6 types of services, which include professional services. The Professional service sector further divided into 11 services, which include Legal Services.

    India has made only specific commitments in relating to engineering services.

    India has made no commitments in the legal services sector at present. This may be contrasted with commitments mode by 44 countries in the legal service sector even same developing countries have made commitments. Such commitments are beneficial to all i.e. to countries and to consumers. As these commitments will bring Trade in the legal services which will play crucial role benefiting consumers countrywide.

    Trade in Legal Services : Benefits to Consumers
    The emerging legal service sector is equally beneficial to all consumers of legal services, without discrimination . In the age of consumerism and competition law, consumers right to free and fair competition is paramount and cannot be denied by any other consideration . Trade in legal services focuses on benefits accruing to consumers from legal service sector, particularly the quality of service available with respect to particular fields. In the case of In Re Sanjiv Datta, Secretary, Ministry of Information and Broadcasting . The supreme court observed, Some of the members of the profession have been adopting prospectively casual approach to the practice of the profession. ……they do not only amount to contempt of court but to the positive disservice to the litigants. In our country must often consumers are at the mercy of advocates and the system and they resort to any other service provider in absence of choice.

    Secondly, the services available to consumers of India are only domestic legal service providers. Corporate legal activities are recent phenomenon in India and solution of some complicated legal issues can only be granted by professional International Law firms hence allowing them shall be beneficial for satisfaction of consumers in India Many countries across the globe resort to Legal Process Outsourcing (LPO) and gain best of the legal services and solutions at competitive prices. Existing regulations deprive consumers to derive benefit, which ultimately effects development .

    Regulations on Legal Services Trade
    Further it is submitted that there exists various restrictions on trade oriented legal service sector, which heavily hampers interest of consumers of legal services. Hence following points need reconsideration and fundamental charge of mindset.

    1. In India there is an absolute bar on advocates advertising and soliciting for any purpose and indicating area of specialization . Restrictions on advertising by lawyers in India have resulted in a situation where consumers can not make an informed choice from the competitive market since the information relating to service is not available to them. Moreover restrictions on professional firms on the informing potential users on range of their services and potential causes further injury to the competition

    2. The Bar Council of India Rules, 1975 in chapter III Rule I, prohibits advocates from entering into partnership or any other arrangement for sharing remuneration with any person or legal practitioner who is not an advocate. Lawyers cannot enter in co-operation with non-lawyers. Prima facie there seems to be no pro competitive justification for such a regulation. Such a measure as hampered the delivery of services to the consumer and anticompetitive . The absolute bar has been lifted to some extent with the institute of Chartered Accountants permitting tie-ups between lawyers and Chartered Accountants.

    3. The regulatory and legal system in India has the effect of limiting the size of legal establishment. Sec. 11 of the companies Act, 1956 stipulates that a partnership or any form of association with more than 20 members if not registered as company shall be an unlawful assembly.

    4. In India only natural person can practice law, as is evidenced by combined reading of Sec. 24, 29, and 33 of Advocates Act and artificial body cannot act as a lawyer. Justification for such restriction is on public policy grounds and in particular to ensure professional responsibilities and liabilities. This a legal service provider can not be incorporated as a company and still continue in practice the profession of law in India, as per the provisions of Advocates Act, 1961.

    5. The Requirement that Advocates enter into partnerships only with other Advocates has the effect of prohibiting partnerships with foreign firms. The effect to the provision is that partnerships can not be entered into between Indian Lawyers and those of other countries. These restrictions on incorporation and size of partnerships, prohibition on entering into partnership with foreign firm and lawyers; has limited the size and growth of the profession as well as professionals and prevent them from being globally competitive.

    6. The Lack of restrictions on partnerships across the world has given rise to firms with a member of partners. Big law firms having wide controlling, regulating and functioning power nationally and internationally. In sharp construct Indian firms are small and incapable of associating with legal experts firms other countries. This way Indian law firms are at disadvantage to law firms to U.S. and E. U .

    The professional regulations are in all likely hood protecting the weak producers of professional services at the cost of information being made available to consumers opening up to legal service sector to foreign law firms and its interaction with growing arena of international trade shall be beneficial for development of the sector. The existing state of decay that the justice delivery system of country finds itself in is to a certain extent attributable to the overprotected legal regime that they have been provided with and some of the members have adopted a “Casual approach” to the practice of law .
    The Apex Court has warned that if the present trend is not checked it is likely to lead to a state where the system is found wreaked from within before it is wreaked from outside.

    Opening up of legal services sector is going to lead to a flow of expertise in sectors where local firms and lawyers are deficiently delivering services. Accepting ‘trade’ facet of legal services would develop the profession qualitatively.

    The Raghavan Committee has summed up the effect of the existing regulatory system in professional services. The legislative restrictions in terms of law and self regulation have the combined effect of denying opportunities and growth of professional firms, restricting their desire and ability to compete globally, Preventing the country from obtaining advantage of India’s considerable expertise and precluding consumers from opportunity on free and informed choice.

    Nonetheless today or tomorrow we have to open up out legal service, but if should not seen as a threat but an opportunity to complete in more & more countries. As soon as Indian perspective in concerned, already Indian legal service section is hugely crowded, will opening up of legal service in India will only overhead if it’s bring word class service job all needs to be
    I would like to conclude only with a thing, that how globalised the word may became, & how professional peddle may became, that in race of globalization which & professionalism, they shall continue to remain agency through which people can get justice.

    The author can be reached at: [email protected] / Print This Article

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