Outside Counsel

In March key members of India's legal community converged in London on the invitation of the Law Society of England and Wales. The Society made its aim clear: it wanted to convince India's government to lift its ban on foreign attorneys practicing in India. As late as the end of August, the Press Trust of India reported India's government was discussing the matter with India's legal community, which opposes liberalization out of fear that Indian firms will lose business to large international firms.

Experts vary on when the Indian market will open, but pressure from countries with business interests in India makes the move imminent. Until the market opens foreign companies operating in India are limited to using domestic Indian attorneys as outside counsel.

"In many countries, [in-house counsel] can reach out to a White & Case or a Mayer Brown, but you're not going to be able to do that in India," says Greg Kalbaugh, director and counsel of the U.S.--India Business Counsel. "So you're going to have to build up a repository or a connection with a domestic law firm."

That's not to say the restriction has to be a liability. Indian attorneys have a finger on the pulse of their country in a way no foreigner could.

"Indian counsel whom we've worked with really know the regulations and environment of India," says Su Mei Shum, chief legal counsel for Motorola's South Asian operations. "I'm sometimes quite impressed at the extent of knowledge they have on the subtleties of the law."

Scarce Resources
The other good news is it's not difficult to identify the right outside counsel for a company's needs, despite India's ban on law firm advertising that some Indian firms interpret as extending to law directories, yellow pages ads and Web sites.

Across the board, experts say U.S. companies can overcome the enormity of India's cadre of attorneys and find a trustworthy Indian law firm through simple word of mouth.

"Even though there are hundreds of thousands of lawyers in India, the universe of counsel experienced in sophisticated international transactions is relatively small," says Tom Britt, a partner in Debevoise & Plimpton's Hong Kong office. "So if you asked a dozen international lawyers for recommendations of counsel, you'd probably see a dozen very similar lists of the firms and the people to go to."

But that narrow field of experienced and competent law firms poses some challenges for companies that want to hire the best attorneys in a competitive market. "The pace of transactions in India is growing much more rapidly than the pace of new lawyers entering the market is growing," Britt says.

Compounding this scarcity is the recent practice among Indian attorneys to leave the country after graduation for training in international markets. It doesn't help that some ultracompetitive companies hoard senior counsel--the only counsel allowed to represent clients in Indian courts--just so opponents can't use them. The relative shortage of attorneys means multinationals may have to vie with others for the attention of indemand law firms.

"It's a hot market right now and lots of companies are requiring Indian legal advice," Shum says. "One of the challenges is getting attorneys to provide the advice as quickly as you want them to. It's important to establish a relationship with certain lawyers and use that relationship to hopefully get the advice sooner rather than later."

Culture Shock
U.S. companies also have to get used to a new business and legal culture. "Indian lawyers can be hesitant in giving firm advice on occasion," says Akil Hirani, managing partner in Majmudar & Co., an Indian firm that has worked with businesses such as GE, J.P. Morgan and Microsoft. "American companies seek clear answers, while in India law and regulations tend to be nebulous at times, and clear answers are not always available."

Shum deals with this by communicating with Indian counsel often and telling them exactly what she needs.

"You need to be very specific in your instructions," she says. "In a way you need to guide and direct them on what you're looking for." Shum also finds Indian attorneys tend to use indirect, flowery language in their work. While such writing may be a shock on first glance, she says after a while one gets used to it. And Indian firms are working to overcome this minor barrier--Majmudar & Co., for instance, compiled a writing manual for its attorneys based on the Harvard Law Review's Bluebook to ensure uniform writing styles.

The greatest challenge of operating a business in India is navigating India's legal system as the country undergoes a period of rapid growth and change.

"Regulatory and legal changes are working their way through the system at a pace that's unprecedented," Britt says.

"It's a struggle for lawyers in any country to keep pace with a rapidly changing legal and regulatory landscape." That hurdle has no easy solutions, but a good Indian attorney is key to success in such an environment. "There's nothing an outsider can do to make that process easier," Britt says. "It all comes down to hiring counsel that you have confidence in and hiring them off the basis of a trusted recommendation."

And according to Britt, multinationals have little to worry about in that area. "The counsel I've dealt with in India are incredibly smart, incredibly hard-working and incredibly committed to the profession and to their clients," he says. "And I think with an outlook and an attitude like that, one could only have a great deal of optimism about the profession in India."

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