The Department of Legal Affairs has proposed the Advocates (Amendment) Bill, 2025 to amend the Advocates Act, 1961 to address contemporary challenges and meet the needs of a growing nation.
Recognition and regulation of the law firms
The amendment proposes the general power of the Bar Council of India to make regulations to recognize and regulate law firms including such firms operating in more than one State.
The proposal introduces a regulatory framework that will regulate law firms to maintain standard operating procedures, ethical practices, and financial transparency. “The BCI may implement standards to maintain quality of legal services and infrastructure for maintaining client confidentiality and data security, professional ethics, and accountability, which could elevate the overall practice of law in the country,” said Indranil D. Deshmukh, Partner (Head – Disputes), Cyril Amarchand Mangaldas.
The recognition will be a shift beyond individual practitioners to entities that operates in more than one State. The regulation will also shift from individual-based to entity-based for effective and efficient regulation.
“It would be expected of the State Bar Councils to lay down clear regulations/guidelines for the law firms on the issues of financial transparency in practice, no conflicts of interest while taking up the cases, uniformity in compliance to be done by law firms situated across the country, and the extent of participation of law firms so as to ensure fair market and competition between the Indian legal practitioners and the foreign lawyers,” highlights Shashank Agarwal, Advocate, Delhi High Court
Beyond Tier 1 Cities
The recognition and regulation of the law firm will provide a structural framework beyond the law firm beyond Tier 1 Cities. The regulations will provide rights, and obligations addressing the challenges related to corporate governance, and ethical questions.
“With recognition, the expectation is that regulations will provide a structured framework addressing governance, compliance, accountability, and professional ethics,” said Sonal Alagh, Partner, Alagh & Kapoor Law Offices.
The regulation must be to aid and enable law firms to attain efficiency and effectiveness in functioning, and not constrain them with the imposition of “Red tapism” hampering innovation in providing of legal services. “A balanced approach is needed—one that safeguards professional standards while allowing firms the flexibility to grow and adapt to modern business realities,” she added.
The law firms deal with sector-specific and provide tailored services in consonance with the needs of the sector. The firm today operates at large scales which is likely to invite strict scrutiny of the regulator to provide additional sector-specific regulations.
Given the complexity and scale of law firms today, a dedicated regulatory framework for law firms—perhaps in the form of separate rules under the Bar Council’s purview—could offer more tailored governance without overburdening individual advocates.Sonal Alagh, Partner, Alagh & Kapoor Law Offices
The regulation will be to adresss challenges beyond tier 1 cities, across the different sizes of the firm. The regulation must be to provide regulations that do not affect the smaller and boutique firms disproportionately. “The key will be to ensure that regulations are proportionate and adaptable to different sizes and structures of law firms,” she added.
The recognition and regulation of the law firm are likely to be more structured and uniform and address challenges of the legal practice across the states.
Rahul Hingmire, Managing Partner, Vis Legis Law Practice said, “For multi-state firms like Vis Legis Law Practice, this can help streamline compliance and reduce jurisdictional complexities.”
The regulation provides a level playing field, an act of balance between unequal to protect their right and interests. “More importantly, it may encourage the growth of structured law firms beyond metro and Tier 1 cities, where independent practices still dominate,” he said.
The regulation will enhance structuring, compliance with global standards, and maintaining professionalism across the country, and ensure accountability.
Challenge
The regulation may provide standards to address governance and ethical challenges. “Regulation must go beyond enrolment oversight to address governance, ethical obligations, and operational transparency without unnecessary bureaucratic constraints,” said Rishabh Gandhi, Founder, Rishabh Gandhi and Advocates
The one-size-fits-all approach is likely to be Inadequate considering the scale and operation of the law firm. The regulation will be subject to the scale of a firm’s operation. “A boutique firm and a multi-state entity face different challenges, and a one-size-fits-all approach could prove inadequate,” he added.
Overregulation may hinder growth and global competitiveness, while a lack of oversight risks ethical dilution. The question remains: Should law firm regulation be nested within the Bar Council of India, or is a separate, specialized framework the way forward?Rishabh Gandhi, Founder, Rishabh Gandhi and Advocates
Entry of Foreign Law Firms
The Union Government will have rule-making power for carrying out the purposes of the Act including rules with respect to any matter for which the Bar Council of India or a State Bar Council has power to make rules.
“This shift could intensify competition for Indian law firms, driving improvements in service quality and fostering global collaborations,” said Keyur Gandhi, Managing Partner, Gandhi Law Associates
The new proposed rules is a shift from ‘fly-in, fly-out’ model, which limits foreign lawyers to temporary engagements, the new rules would enable sustained operations, allowing foreign firms to build long-term client relationships and gain a deeper market understanding.
“While this presents challenges for Indian law firms, it also opens opportunities for partnerships, knowledge exchange, and exposure to international best practices,” he said.
The Advocates (Amendment) Bill, 2025, ultimately seeks to create a balanced framework for foreign law firms’ entry while ensuring that the Bar Council of India maintains regulatory oversight to uphold professional integrity and standards.Keyur Gandhi, Managing Partner, Gandhi Law Associates
The entry will push for innovation and competition, to enhance accessibility, professionalism, and accountability. “Law firms will need to invest more in training and development of their lawyers and embrace technology and innovation, including legal tech solutions, to improve service delivery and operational efficiency,” said Indranil D. Deshmukh, Partner (Head – Disputes), Cyril Amarchand Mangaldas.
Way ahead
The objective of bringing this regulation is to bring accountability, transparency and ethical standards in line with global practices. “BCI is now empowered to regulate law firms across multiple states. This brings accountability and unfirm ethical standards for firms,” said Alay Razvi, Managing Partner, Accord Juris.
The effectiveness is not within the text but the enforceability of the text. The enforceability is subject to the effectiveness and efficiency of the law. “Ultimately, the effectiveness of this amendment will depend on how pragmatic, business-friendly, and enforceable the regulatory framework is, ensuring both professional integrity and ease of doing business within India’s legal ecosystem,” he added.
