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September 29, 2011 1:47 PM

India Leaves Door Ajar for U.K. Firms

Posted by Brian Baxter

The Indian government has indicated that it may soon make a decision on whether British law firms will be allowed to practice in India, according to local press reports on talks between top government officials and legal authorities in India and the United Kingdom. (Hat Tip: WSJ Law Blog.)

A Hindustan Times report published Tuesday stated that Salman Khurshid, India's minister of law and justice, had a productive meeting with U.K. lord chancellor and secretary of state Kenneth Clarke.

Clarke visited India from September 25 to 28 for bilateral talks with his Indian counterparts, according to Bar & Bench, a legal publication in India. Ashok Parija, who chairs the Bar Council of India, told Bar & Bench that the talks were productive, but that a decision has not yet been reached on whether to allow foreign firms, mainly those based in the U.K., to practice in India.

The two men did reportedly agree to let the Bar Council of India and The Law Society of England and Wales continue work on crafting a more formal arrangement that would let British firms enter India's growing legal market, while also offering Indian firms the opportunity to open offices in the U.K.

The Economic Times of India reports that Khurshid told Clarke that the Indian government in New Delhi would "fast track" a decision on opening up access to India's legal market.

India's legal market is one of many that foreign firms hoping to grow have sought to tap into in recent years. Several U.S. firms, including the now defunct Howrey, have opened offices in the country to handle client work, even though they were forbidden from practicing law. (Indian law requires foreign lawyers to be employees or consultants to local law firms.)

Some U.K. firms, meanwhile, have crafted referral relationships with their Indian counterparts. Magic Circle firm  Clifford Chance, for instance, had a "best friends" arrangement with India's AZB & Partners, but ended it earlier this year.

Hopes for a softening of the country's tough stance on foreign firms were most recently dashed in December 2009 when a high court in Mumbai ruled that India's central bank should not have granted licenses to firms like Ashurst, Chadbourne & Parke, and White & Case. The ruling led Ashurst to close its liaison office. (The firm signed a new alliance agreement with a top Mumbai firm in July.)

The possibility that India's doors might finally be opening to foreign lawyers is raising hopes anew. Allen & Overy antitrust partner John Wotton, who serves as president of The Law Society of England and Wales, told Legally India he is more confident than ever that the time is coming when U.K. firms will be able to set up shop on the subcontinent.

Other observers are less optimistic about the possibility that India's closed legal market might finally open up. Legally India's publishing editor Kian Ganz, a contributor to our sibling publication The Asian Lawyer, notes that the only real thing that Khurshid and Clarke managed to agree on was that they should continue holding discussions.

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