How can lawyers contribute to improve India’s economy?

So in my last blog I mentioned that in the last 25 years nothing “external” has changed India but it is the policies of government and initiative of private enterprise which has made this country. I was thinking hard that what kind of people who change this country faster than others. I thought about Industrial tycoons, investment bankers, doctors, CAs, Engineers, builders, teachers, SMEs and a host of other people. But one thing I realised that most of these people are the effect of economic growth not the cause. I thought about lets evaluate the role of lawyers in growing India’s economy. Do they contribute to cause or merely enjoy the effects?

`Let me start this topic with a divorce case. My house-maid is fighting since 5 year to get divorce from her husband. The allegation: extra-marital affair, cruelty, not giving maintenance etc. The cost?

1.10,000 every year in court fees, lawyer fees alone.

2. The cost of commuting to court every month, the reduction in working days would make up to another 10,000.

3. This is only one side of costs.

These costs would mean approximately 25% of her income from which she has to feed to children and educate them. It’s a severe strain on her finances. Not to mention the absence of a husband in her children’s life because of her inability to marry without a divorce. In fact most of the criminals are from broken families, and timely legal attention may reduce the parental absence for children.

This is not a one off case in the infamous India legal scenario. There would be thousands divorce petitions pending in various courts in India. Whenever I talk about law and order in India people immediately blame corruption and incapacitated police. However in this case there is no case of corruption or police. It’s merely the problem of processes. If the husband’s or wife’s lawyer is not present for 3 consecutive dates, shouldn’t the order be passed ex-parte? Just image the drain on economy such kind of cases would have? Even worse there would be thousands of women who face problem of wife beating, extra marital affair and other valid reasons of divorce but are afraid to take services of lawyer due to the tedious process.

Like the economy theory of “market expansion” due to convenience, people would avail more of lawyer’s service and hence effectively a lawyer’s long term revenues would not suffer. So are India’s divorce rates lower due to arranged marriages or bad legal system?

There is joke: A very senior lawyer’s son joined his practice and in the first month was sent to represent the old case which his father was handling since about 15 years. He was an energetic and enthusiastic lad who left no stone unturned and solved the case in 15 days. Excited he went to his father to give him the good news. The father slapped him hard and said: “idiot that funded your education for all these years now who is going to fund your marriage?”

I would say this clearly represents a “lawyer’s Myopia” in assuming that customer dissatisfaction is not going to harm them in anyway. In fact if you see the rise in out of court settlement in recent years (which media doesn’t report) you see that practically people have lost faith in the judicial system. So only thing that lawyer can do, is take up activities at the bar level to increase customer satisfaction. They will improve their economic condition and also the country.

So that’s something at the micro level. Now let us discuss macro level role which needs to be played in policy making.

Most of the US lobbyists are formed out of lawyers. The policy formation in India is a cryptic process and I don’t know how lawyers could influence that. However let’s take example of real estate scenario.

It is roughly estimated that 75% of a person’s net worth is in real estate. However when he wants to buy a house he has to either get a new one through builder, resale one through a broker or directly from the owner. The only law that regulates all these transactions is the “Indian Contract Act 1872” and host of other acts like “Transfer of Property Act 1882” etc. There is no separate act to govern the builders or the brokers. In fact there is no title guarantee in India it is just title assurance. The government knows that second biggest sector to employ people after agriculture in India is real estate. It leaves not a page unturned in taxing by way of Income tax , Service tax and Wealth tax from real estate. However as far as regulation is concerned, nothing has been done. 130 years have passed since Transfer of Property Act and government is still not clear on title clearance.  What can a lawyer do?

Firstly we need a regulation on title clearance. That will immediately create a huge market for title clearance and insurance for lawyers.

Secondly we need a regulation for builders on Municipal authorities. The builders have to follow norms for safety, accessibility, quality and timeliness. This regulation is already there but municipal corporations should be monitored as usually they are bought over. Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1996 is passed but not enforced at municipal level.  

Thirdly we need a regulation for brokers. In Gujarat you cannot become a driver if you are 10^th pass. However you can become a real estate broker. Now this zero entry barrier has crowded the market with middle men with no value addition and brought down the reputation of brokers. While in developed countries there is a regulation that brokers needs to pass a test and undergo continuous education. We need such a regulation in India. I am sure it will be a lot of work for lawyers to frame and enforce this regulation at each city level.

There was a survey on who would people trust the least? A lawyer, a politician or a realtor. People choose a Politician as the least trusted person. However many politicians are lawyers and hence I think lawyers should work on improving their trustworthiness.

Let’s the research intellectual property rights scenario. There is a landmark case of Apple V/S Samsung. In which it was clear that you cannot steal someone else’s patented ideas. A question is that would such case happen in India? I think not because Indian companies are not investing in R&D.  Assuming Apple was India based, by the time of verdict the products would be outdated and would not even be available in second hand market.

I think India has the talent to make an Apple iPhone. However it lacks the legal infrastructure to protect the patents. The innovations in today’s world are not a product of a single patent but a combination of own, licenced and infringed patents. Typical iPhone today has 200 of its own patent and equivalent of licenced. For example Microsoft earns more out of licencing of its patents to Android phone manufacturers than manufacturing of its own WinPhone.

So in effect if we want to have a huge RnD expense we need a protective IP regime in our country.  Who will bring IP protection to India? Legislation is already there, Copyright act, 1957, Patents 1970, and host of other legislation.

Why not a single public interest litigation on pirated CDs available on street? Why no court action “sou moto” on piracy of software? Why does the government look the other way when there are lookalike products hurting the innovators. Blatant violation of copyright needs speedier conviction.

 

Lets talk about honest people. Law is made to help honest and punish the dishonest. However cumbersome processes just do the exact opposite. On the ease of doing business, India ranks 132 out of 189 countries. The forms, the procedure and the information about it are aimed to dissuade the honest. Try to get a manufacturing business started in India. Knowingly or unknowingly you will break a law or two. Now imagine there are two players in a competitive in market : an enterprise which a high cost of compliance or an enterprise which has a high cost of non-compliance. Which company will be profitable in an atmosphere of non-compliance? Why government bureaucracy has a free hand in increase common man’s inconveniency and lawyers follow them? So much time would get saved if the honest people can comply in an efficient way.

 

Conclusion:

The lawyers should focus on improving their impression and focus on customer satisfaction rather than fleecing the same customer over and over again. If more number of people feel availing services of lawyer leads you to a life long battle then more number of people will approach them. Lawyer can really improve the country just like Mr. Mohandas did not very many years ago.