Bar Council
In a significant development that could reshape the conversation around law firm mergers in India, the Bar Council of India (BCI) has issued a show-cause notice to IndusLaw and international law firm CMS, raising concerns over their recent merger announcement. The Bar Council alleges that the CMS-IndusLaw merger may be in violation of professional conduct rules laid down under the Advocates Act, 1961.
This marks the first time the BCI has intervened in a law firm merger of this scale, signaling its intention to enforce regulatory boundaries in the evolving Indian legal landscape.
The CMS-IndusLaw Merger: A Landmark Move
In July 2025, IndusLaw, a prominent Indian law firm with offices across major cities, announced its merger with CMS, a global law firm headquartered in Europe. The deal was celebrated in many legal and corporate circles as a landmark move that would expand cross-border capabilities and boost the global footprint of Indian legal services.
Once completed, the merger would have brought CMS’s international reach and resources to the Indian legal ecosystem, offering clients integrated legal solutions spanning jurisdictions.
However, the merger immediately raised eyebrows within the legal community, particularly among regulatory bodies and senior members of the Bar.
BCI’s Concerns and Legal Grounds
The Bar Council’s primary contention is that the proposed merger may contravene Indian laws governing the practice of law by foreign firms. According to the Advocates Act, only advocates enrolled with a State Bar Council are permitted to practice law in India. While the Supreme Court, in its landmark Bar Council of India v. A.K. Balaji judgment (2018), allowed foreign lawyers to offer advisory services on foreign law, it did not permit foreign law firms to set up shop or practice Indian law.
In its notice, the BCI stated that the CMS-IndusLaw arrangement could potentially open the door for CMS to indirectly operate in India under the garb of a domestic partnership, thereby violating this legal framework.
The BCI has asked both firms to explain:
- Whether the merger involves CMS partners or representatives practicing Indian law directly or indirectly;
- If Indian lawyers under IndusLaw would be reporting to foreign nationals, violating professional autonomy;
- How the merged entity will ensure compliance with Indian regulatory standards, including restrictions on profit-sharing with non-lawyers or foreign entities.
Industry Divided Over Implications
The legal industry remains divided over the move. Supporters of the merger argue that globalization is inevitable and that Indian law firms must evolve to stay competitive. They point to other sectors such as finance, consulting, and technology, where foreign partnerships are not just accepted but encouraged.
Raghav Kapoor, a corporate law analyst based in Mumbai, said, “It’s time India allows legal cross-pollination. Regulatory bodies should develop frameworks that facilitate rather than obstruct partnerships that benefit clients.”
On the other hand, traditionalists warn that allowing foreign law firms into the Indian market—directly or via mergers—could disrupt the domestic legal profession, particularly smaller practices and solo practitioners who may struggle to compete with global giants.
Senior advocate and former BCI member Arvind D’Souza commented, “If we open the floodgates without a regulatory dam, the entire structure of the Indian legal profession could be compromised. The CMS-IndusLaw merger is not merely a business deal—it’s a regulatory flashpoint.”
What the Firms Say
Both CMS and IndusLaw have issued carefully worded statements maintaining that the merger is fully compliant with applicable laws and does not permit CMS to practice Indian law. IndusLaw emphasized that it would remain a firm of Indian lawyers registered with Indian bar councils.
“Our alliance is about knowledge-sharing, cross-border collaboration, and expanding client services. It does not and will not involve violation of any professional standards,” said a joint statement by the two firms.
The firms have been given a stipulated time frame—believed to be 21 days—to respond to the BCI’s show-cause notice. Legal experts suggest that depending on the responses, the Bar Council could initiate disciplinary action, refer the matter to a disciplinary committee, or even seek judicial intervention.
The Road Ahead
The CMS-IndusLaw case could set a precedent for the future of international collaborations in India’s legal sector. With increasing globalization, corporate clients are demanding integrated legal solutions, and Indian firms are seeking global alliances to meet this demand.
However, regulatory clarity remains key. The BCI is reportedly considering drafting fresh guidelines on permissible forms of collaboration with foreign legal entities, which may include joint ventures, referral networks, or limited practice rights under supervision.
Conclusion
As the Indian legal profession stands at a crossroads between tradition and globalization, the CMS-IndusLaw merger has become a litmus test for how the Bar Council will balance the need for growth with the mandate to protect professional integrity. Whether this merger is seen as an opportunity or overreach will depend not only on legal arguments but also on how India defines the future of its legal market in a globalized economy.
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