LEGAL MARKET: liberalisation could boost growth by 13%


Liberalisation of the legal market is crucial for the future of the Indian economy, a major report has concluded.



The Commonwealth Business Council said, despite the focus on the potential of India's legal process outsourcing market, 'the earnings and employment opportunities in these highly commoditised markets would be a fraction of the potential of a fully liberalised market in commercial law advice'.



It estimated that the Indian legal market is currently worth $4 billion (£2 billion), but that could grow by 13% a year to $8.4 billion by 2016 if limited liberalisation is pursued, compared to $6.5 billion at current growth rates.



The report recommended lifting the ban on foreign firms in India to allow them to compete for transactional work, but not litigation, and phasing in closer associations between foreign and Indian lawyers. It noted that current restrictions on Indian firms - such as the 20-partner cap and the ban on multi-disciplinary practices - 'hold the commercial law sector back from exploiting its true potential'.



The increasing number of cross-border transactions is highlighting the inexperience and missing skills of Indian firms, which 'are often exposed only to limited aspects of transactions' as a result, the report found.



Stuart Popham, senior partner at Clifford Chance and the only legal representative on the high-level advisory board for the UK India Business Council, said the report showed liberalisation would be a 'win-win' for clients and Indian lawyers.



Law Society President Andrew Holroyd said: 'Globalisation is opening up tremendous new opportunities for lawyers everywhere but those who move quickest will reap the most benefit. India should not wait and see, because if it does, its lawyers will continue to lose out.'



Neil Rose