CS: WHAT HAVE BEEN THE RECENT TRENDS IN
THE LEGAL MARKET IN NEW DELHI?
SS: Last year has been a year of mergers, break ups
and start ups. Several firms have broken up and
rebounded and new startups have also mushroomed
in the Indian legal market.
In what is an interesting development, the
Honorable Bombay High Court in its recent judgment
in Lawyers’ Collective Vs. Chadbourne and Park,
Ashurst, Morris Crisp and White & Case, has declared
that foreign lawyers cannot set up liaison offices or
other establishments so as to carry on the practice of
law in India. This judgment is likely to impact the
plans of several foreign firms to make an entry into
India. It is also likely that the ‘best friend’ relationships
set up between Indian and international firms, may
be scrutinized by the Bar Councils and Regulatory
bodies in India on the principal that ‘what cannot be
done directly ought not to be done indirectly’. The
issues of dual membership in Indian and foreign
firms, funding by foreign firms and the establishment
of a ‘permanent establishment’ for taxation purposes
is bound to receive regulatory attention. There are
already tax judgements in relation to fees earned by
Clifford Chance in India and the taxation thereon.
CS: DOES AMARCHAND MANGALDAS HAVE
ANY PLANS FOR CHANGE OVER THE NEXT FEW
MONTHS?
SS: Our Firm has expanded throughout 2008 and
2009 and we hope to expand aggressively in 2010. As
a brief snapshot, in March 2008, our Delhi Region
capability amounted to 147 advocates and partners. In
March 2009 this number had grown to 204, notwithstanding routine attrition. The Firm has additional infrastructure in place to add at least 70 to 100 lawyers in
its Delhi Region and depending upon our clients’
needs, the Firm will pace its growth so as to remain the
premier and leading Indian national law firm.
CS: HOW DO YOU SEE THE INDIAN LEGAL
MARKET MORE GENERALLY DEVELOPING OVER
THE COMING YEARS?
SS: The Indian legal market is bound to see a more
systematic and organized growth and creation of cor-
porate culture. A catalyst of this change is the Limited
Liability Partnership Act that has been brought into
force. The firms which were constrained because of
unlimited liability under the Partnership Act, 1932 are
likely to switch over their professional activities
(maybe without the underlying assets) to new limited
liability firms so as to encourage younger, less capitalized professionals and lawyers to become partners
and share in the profits of the firm and its growth. The
advantages of collectivism are slowly percolating into
the common understanding of the legal community
and the aggregation of the income of several hundred
lawyers is an attractive proposition when it is shared
across the firm.
Legal firms have also introduced the lock step and/or
modified lock step in their partnership models and this
is a healthy and welcome development in India.
However, financing law firm growth continues to
be a sticking point in India. The Indian legal market
and law firms need some fiscal incentives for establishing larger premises and infrastructure, larger
libraries, telecommunication facilities and investment
in technology. Capital creation has historically been
very difficult for the legal fraternity.
The legal services industry can be a sunrise industry
as much as the IT industry and the Government of
India needs to properly incentivize the Indian legal
community so that they cannot merely service Indian
legal requirements but spread out into the world, on
the back of the IT industry to service the world’s legal
requirements at a cheaper cost than international
lawyers with their bloated cost regimes. The circumstances of enhancing the growth opportunities in the
legal field are akin to the IT boom two decades ago.
It is well recognized that the Indian lawyer is among
the brightest in the world. O
Amarchand & Mangaldas & Suresh A. Shroff & Co.
Amarchand Towers
216, Okhla Industrial Estate – Phase-III
New Delhi-110 020, India
Tel: +91 11 2692 0500/4159 0700
Fax: +91 11 2692 4900
email: shardul.shroff@amarchand.com
