A UK Action Plan designed to promote the advantages of liberalisation in foreign legal sectors has begun, the Ministry of Justice has revealed. Led by Justice secretary Ken Clarke, a UK government delegation arrived in Delhi on 26 September for three days of talks with officials from India’s legal system, just two weeks after the Action Plan was announced. Indian representatives who met with Clarke’s team included Law and Justice minister Salman Khurshid and Bar Council of India (BCI) chairman Ashok Parija.
The visit aims to encourage India to realise the full value of its legal market. While its current worth is estimated at $4bn, and is predicted to rise to $6.5bn by 2016, the UK Ministry of Justice argues that it could hit $12.3bn in the same period if it were fully liberalised. Current rules set down by the BCI prevent Indian law firms from going into business with foreign firms, and bar foreign businesspeople from owning part or all of any Indian law firm. In 2009, India passed the Limited Liability Partnership (LLP) Act, which enabled law firms to expand beyond a previous cap of 20 partners and structure themselves more like corporations. But this was seen by the industry as just an early step on a much longer road to liberalisation.
Clarke’s Action Plan, unveiled on 14 September, marks a concerted effort by the Ministry of Justice to build business relationships between the UK legal industry and its counterparts in foreign economies – particularly Brazil, India, South East Asia and Turkey. ‘In my meetings with influential Indian businesspeople this week,’ said Clarke at the start of his visit, ‘I will be making the case that restrictions on international law firms and foreign lawyers are holding back inward investment and growth here. Liberalisation is a vital contributor to India’s future economic success, and an India that is more receptive to international trade would be hugely beneficial to the UK as an exporter.’
As part of the visit, Clarke also delivered a lecture arguing for increased levels of legal business between the UK and India. ‘British legal services are a very important part of our economy,’ he said at the podium. ‘Major multinational firms look to settle their disputes in Britain. I’m glad to say that London is host to very large numbers of Indian lawyers and Indian legal practices. It is a hub for international legal services. Just as we deepen our trade, just as we deepen our investment relationships with modern India – this emerging, global economic power – I think when it comes to relationships between our legal professions, it’s a very good idea to talk them through and strengthen them as well.
‘If the Indian legal services were to follow our lead,’ he added, ‘they could be very highly competitive. You have a very strong tradition of legal education. You have a powerful legal profession.’
India has emerged as the world’s leading destination for legal process outsourcing (LPO) – an attractive method for corporations in other parts of the world to send out commoditised legal tasks for cost-effective completion. In the aftermath of the talks, Parija stressed the need for a bilateral system that cuts both ways. ‘We understand the UK firms want to open offices in India for non-litigation purposes – mainly drafting of business contracts, deeds, agreements and other similar works,’ he said. ‘We will negotiate with our UK counterparts to work out a principle of reciprocity, which will benefit both sides.’
Khurshid, meanwhile, was sanguine about the superficial differences between the UK and Indian legal systems. ‘There are some perceptions that are to be addressed more than the issues,’ he said.
To watch excerpts of Ken Clarke’s lecture on YouTube, click here
For previous NewLegal Review coverage of the Ministry of Justice Action Plan, click here
Government initiative to raise awareness of liberalisation benefits makes a start in world’s leading location for legal services outsourcing