Discussions to allow foreign law firms to operate in India were dropped during US President Barack Obama’s state visit to India, said two US law firm partners who were part of the delegation.
DLA Piper Washington partner William Cook and Boston-based Shahana Basu Kanodia who is partner and chair of the South Asia practice group at US law firm Edwards Angell Palmer & Dodge, were both part of the roughly 200-strong delegation that accompanied Obama on his three-day tour of India that started on 6 November.
“The law-related agenda was actually dropped from the agenda. Initially it was there but then it was decided to focus on the main issues, which from the President’s perspective was job creation,” said Kanodia.
Cook also told Legally India that legal market liberalisation was a low priority in the Obama administration’s agenda and was not raised at all during the visit.
“I think the US has been pushing the legal opening up of the market for a while, but ever since the Bombay High Court decision [in the Lawyers Collective case last year], I don’t see the Indian legal market opening up any time soon,” added Kanodia. “I think it would still take five, six or seven years.”
She explained: “In the case of this delegation it was a question of picking the battles to fight and given the recession and Obama’s loss in the House [of Representatives], what is uppermost in everybody’s mind is jobs.”
Kanodia also added that most Indian law firms were opposed to liberalisation and that Indian businesses too saw few advantages in allowing foreign firms in, which could drive up billing rates further despite some Indian firms already having almost comparable rates to US firms.
President Obama (pictured) started his 10-day tour of Asia in India on 6 November, and had focused on promoting trade and democracy.
In July UK Prime Minister David Cameron visited India and was accompanied by Clifford Chance senior partner Stuart Popham, who said that he was confident India would lift its restrictions on foreign lawyers by 2012.
The Chennai High Court is currently hearing a writ petition against 31 foreign law firms, alleging that they are practising law illegally in India.
This is a longer version of a news item first published by Bloomberg.