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

Adv.Swa nil !oshi "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. opoola Introd"ction !lobalization must not be viewed from the restrictive sense as it connotes the process of making global" being present worldwide. #t 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. !lobalization can also be seen from different perspective as the growing interdependence and intensively of interaction among nations and about the $ation %tate coming under pressure" from transnational phenomenon and so on . #t has been defined as the broadening and deepening linkages of national economics into world market for goods capital and special services . The concept of !lobalization has brought about a growing tendency towards the universal homogenization of ideas" cultures" values and even the lifestyles. $eedless to say can the legal service and the legal profession remains unaffected by this changing world order& The resent paper attempts to analyze the impact of globalization on legal profession in #ndia. The Legal Profession in India #ndia has the worlds second largest legal profession with more than '(("((( lawyers . The predominant service providers are individual lawyers" small or family based firms . )ost of the firms are involved in the issues of domestic law and ma*ority 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 *ustified on the grounds of public policy and ,dignity of profession+ . The *udiciary has reinforced these principles" which can be reflected in words of -ustice .rishna #yer" when he noted" /aw is not a trade" not briefs" not merchandise" and so the heaven of commercial competition should not vulgarize the legal profession. 0owever over the years courts have recognized ,/egal %ervice+ as a ,service+ rendered to the consumers and have held that lawyers are accountable to the clients in the cases of deficiency of services. #n the case of %rinath 1. 2nion of #ndia 3A#4 566' )ad 789: )adras 0igh ;ourt held that" in view of %ec. < of ;onsumer rotection Act" 56='. ;onsumer redressal forums have *urisdiction to deal with claims against advocates. %ec. 8 32: of competition Act" 8((8 defines the term ,%ervice+ along the lines of consumer protection Act" 56='. Thus it may be concluded that legal services are becoming sub*ect of trade related laws where consumerism and market forces should be given ade>uate space . Changing Face of Legal Profession !lobalization 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 >uantitative and >ualitative. The past decade has been mini-revolution in legal service sector with the greatest legal impact on corporate legal arena Activities in pro*ect financing" intellectual property protection" environmental protection" competition law" corporate ta@ation" infrastructure contract" corporate governance and investment law were almost unknown before 6(+s. $umber of /aw firms capable of dealing such work was very few . #t is evident that need of professional service has been tremendous in the legal service sector. #n last few years /aw Airms" in house firms and individual lawyer+s e@pertise in providing legal services in corporate sector has increased by several times. These new /aw Airms primarily engage and loan instrument" writing infrastructural contracts" power contract" drafting of pro*ect finance" contracts" finalizing transnational investment" *oint venture and technology transfer contracts. This is discerning shift in the disposition of emerging legal sectors towards settling disputes through AD4% rather adversarial litigation mode of dispute resolution !lobalization has thus e@panded the internal and e@ternal demand for legal services . Today in legal services is on inevitable fact. At the same time significant for progressive development of legal profession in #ndia in this era of !lobalization. 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 e@istence of statutory bodies but also from conservative and traditional mind set that inhibit development of cross border services supply.

Bven globally the legal services sector is necessarily shackled by *urisdictional constraints such of the re>uirement for a degree from the country where the service is to be imparted. %ome local considerations apply only to certain aspects of legal services and not to others. Chere the local considerations are important they must be preserved and e@ceptions 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. Fo"ndation of Globalized Legal Services Corld Trade Organization 3CTO: is the successor of the !eneral Agreement of Tariffs and Trade 3!ATT:" which ruled the world between 56'( and 566<. both ;o-e@isted between 5667 and 566D" when CTO came into e@istence. %ervices are brought for the first time under multilateral trading system under the 2ruguay 4ound Agreements launching CTO. Barlier the !ATT %ystem confined only to goods trade. The inclusion of services under the CTO in 566D is a reflection of growing share of services in national economics world over. #t 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 Bconomics are specializing in knowledge based service and this !AT% entered the CTO agenda in 566D . #t is among the CTO+s most important and the first and only set of multilateral rules concerning #nternational Trade in services. #t was negotiated by the !overnments 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 !ATT" !AT% serves to create a )ost Aavoured $ation 3)A$: status for members of the CTO through specific commitments that allow nondiscriminatory treatment to be given to foreign suppliers from overseas. )embers 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 #ndia to limit the number of foreign legal practitioners who may be licensed to practice here. Eut it goes much further than that. A whole range of non-tariff barriers e@ist 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. !AT% achieves its ob*ectives following basic !ATT principles using. )ost Aavoured $ational treatment under Article ## and F1## respectively while aiming to reform markets and yet allow special and differential treatment for developing countries. The two e@cepts to !AT% are3i: services provided to the public in the e@ercise of governmental authorities and" 3ii: in the Air transport structure" traffic" rights. !AT% provides for trade in services through four different modes which are defined in paragraph 8 of Article #. a: Arom the territory of one member into the territory of any other member. b: #n the territory of one member to the service consumer of any other member. c: Ey a service supplier of one member" through commercial presence in the territory of any other member. d: Ey a service supplier of one member" through presence of natural persons of a member in the territory of any other member. The !AT% schedules refer to each of these modes and all commitments are made accordingly. GATS classification # Legal Services There are 58 sectors classified by !AT% for which commitments may be made one of them is Eusiness %ervices. Eusiness %ervices is further divided into ' types of services" which include professional services. The rofessional service sector further divided into 55 services" which include /egal %ervices. #ndia has made only specific commitments in relating to engineering services. #ndia has made no commitments in the legal services sector at present. This may be contrasted with commitments mode by 77 countries in the legal service sector even same developing countries have made commitments. %uch 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 $ %enefits to Cons"&ers The emerging legal service sector is e>ually beneficial to all consumers of legal services" without discrimination . #n 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 >uality of service available with respect to particular fields. #n the case of #n 4e %an*iv Datta" %ecretary" )inistry of #nformation and Eroadcasting . The supreme court observed" %ome of the members of the profession have been adopting prospectively casual approach to the practice of the profession. GGthey do not only amount to

contempt of court but to the positive disservice to the litigants. #n 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. %econdly" the services available to consumers of #ndia are only domestic legal service providers. ;orporate legal activities are recent phenomenon in #ndia and solution of some complicated legal issues can only be granted by professional #nternational /aw firms hence allowing them shall be beneficial for satisfaction of consumers in #ndia )any countries across the globe resort to /egal rocess Outsourcing 3/ O: and gain best of the legal services and solutions at competitive prices. B@isting regulations deprive consumers to derive benefit" which ultimately effects development . 'eg"lations on Legal Services Trade Aurther it is submitted that there e@ists various restrictions on trade oriented legal service sector" which heavily hampers interest of consumers of legal services. 0ence following points need reconsideration and fundamental charge of mindset. 5. #n #ndia there is an absolute bar on advocates advertising and soliciting for any purpose and indicating area of specialization . 4estrictions on advertising by lawyers in #ndia 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. )oreover restrictions on professional firms on the informing potential users on range of their services and potential causes further in*ury to the competition 8. The Ear ;ouncil of #ndia 4ules" 569D in chapter ### 4ule #" prohibits advocates from entering into partnership or any other arrangement for sharing remuneration with any person or legal practitioner who is not an advocate. /awyers cannot enter in co-operation with non-lawyers. rima facie there seems to be no pro competitive *ustification for such a regulation. %uch a measure as hampered the delivery of services to the consumer and anticompetitive . The absolute bar has been lifted to some e@tent with the institute of ;hartered Accountants permitting tie-ups between lawyers and ;hartered Accountants. <. The regulatory and legal system in #ndia has the effect of limiting the size of legal establishment. %ec. 55 of the companies Act" 56D' stipulates that a partnership or any form of association with more than 8( members if not registered as company shall be an unlawful assembly. 7. #n #ndia only natural person can practice law" as is evidenced by combined reading of %ec. 87" 86" and << of Advocates Act and artificial body cannot act as a lawyer. -ustification 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 #ndia" as per the provisions of Advocates Act" 56'5. D. The 4e>uirement 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 #ndian /awyers and those of other countries. These restrictions on incorporation and size of partnerships" prohibition on entering into partnership with foreign firm and lawyersH has limited the size and growth of the profession as well as professionals and prevent them from being globally competitive. '. The /ack of restrictions on partnerships across the world has given rise to firms with a member of partners. Eig law firms having wide controlling" regulating and functioning power nationally and internationally. #n sharp construct #ndian firms are small and incapable of associating with legal e@perts firms other countries. This way #ndian law firms are at disadvantage to law firms to 2.%. and B. 2 . 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 e@isting state of decay that the *ustice delivery system of country finds itself in is to a certain e@tent attributable to the overprotected legal regime that they have been provided with and some of the members have adopted a I;asual approachJ to the practice of law . The Ape@ ;ourt 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. Concl"sion Opening up of legal services sector is going to lead to a flow of e@pertise in sectors where local firms and lawyers are deficiently delivering

services. Accepting ,trade+ facet of legal services would develop the profession >ualitatively. The 4aghavan ;ommittee has summed up the effect of the e@isting 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" reventing the country from obtaining advantage of #ndia+s considerable e@pertise and precluding consumers from opportunity on free and informed choice. $onetheless 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 #ndian perspective in concerned" already #ndian legal service section is hugely crowded" will opening up of legal service in #ndia will only overhead if it+s bring word class service *ob all needs to be # 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 *ustice.

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