That is because the Bar Council of Delhi has directed them not to start offer legal services.
The council’s directive — which follows a complaint filed by Society of Indian Law Firms (SILF), the only representative body of law firms in the country, against major audit and accounting firms practising law — is in contrary to the stance taken by the corporate affairs ministry (MCA).
An expert panel constituted by the ministry had recommended that Advocates Act be amended to allow audit firms to offer legal services, as ET had first reported on November 18 last year.
The bar council had recently issued notices to EY, PwC, Deloitte and KPMG, seeking details of all the lawyers they have hired in their firms.
KPMG and Deloitte have filed their reply to the notice, while EY and PWC have sought six weeks and four weeks, respectively, to file their reply.
“The BCD (Bar Council of Delhi) has asked the so-called Big Four to provide the list of lawyers who are part of them in any capacity and still practising the law,” said Lalit Bhasin, president of SILF. “SILF believes that audit and consulting firms are also providing legal services in India, which is prohibited under the Advocates Act 1961.”
Bar council on Thursday said the Big Four should “refrain” from providing any service that would amount to practicing law.
SILF had first complained to Delhi Bar Council about alleged unauthorised practice of law by the Big Four in 2015.
The council has now written to the India head of all the four firms and has asked to represent their views on the issue. The next hearing of the council would be held in July.
Industry insiders said Indian law firms were first wary of foreign law firms entering the country, but that view has since mellowed as many large law firms are now open to foreign investment.
However, most of them view the Big Four as a real threat as they could have huge impact on the way law firms charge margins, an insider said.
However, lately law firms have been venturing in territories largely dominated by the Big Four, offering multi-disciplinary practices (MDPs) such as forensic operations, undertaking commercial diligence and investigation, and merger and acquisition (M&A) services, for their clients.
For instance, AZ&B Partners reportedly hired six forensic experts from EY.
While the Big Four continue to focus on revenues and work on smaller margins, law firms have comparatively smaller top line but huge profit margins, insiders said.
The MCA expert panel had said the “Advocates Act has to evolve”. “For Indian firms to evolve into global leaders in auditing, legal, consultancy, and ancillary services, it is necessary to rationalise the Advocate Act 1961 to facilitate development of Indian audit firms as well as legal firms,” its report had said.
Globally, Big Four offer full-scale legal services in some geographies and ‘alternate legal services’ in others. In 2017, PwC launched ILC legal in the US and Flexible Legal Resources for international clients. Deloitte has entered legal services business in the UK and also acquired a US legal firm. EY, too, has bought a legal services provider in US.
In India, in the past, legal notices have been issued to domestic arms of the Big Four for hiring lawyers and operating “surrogate” law firms. The Indian affiliates of the Big Four have hired lawyers by the hundreds to provide lowvalue legal and documentation work, for which legal firms charge more.
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