The major auditing firms operating in India including the big four - Ernst and Young, KPMG, PricewaterhouseCoopers and Deloitte - could find themselves losing a major revenue pie.
The Society of Indian Law Firms (SILF) on Saturday decided to ask all management and accounting firms to stop providing legal advice to their clients, after a recent Supreme Court order that observed that the expression "to practise the profession of law" under the Advocates Act, 1961 covers both litigation as well as non-litigation matters, and must be handled only by advocates.
This could translate into the auditing firms losing a substantial amount of revenues and clients.
According to SILF, the foreign law firms have for long been offering advice on non-litigation matters to their clients. In Saturday's meeting, the society also decided to take up the issue with the Institute of Chartered Accountants of India and the ministry of corporate affairs.
"We would first take up the issue with the ICAI and the ministry of corporate affairs. In case the accounting firms including the foreign ones continue to provide legal advice to their clients, the government too must intervene," Lalit Bhasin, president, SILF and managing partner, Bhasin & Co told Hindustan Times. "But if it does not solve the problem, we are ready to take up the issue in court."
{{/usCountry}}"We would first take up the issue with the ICAI and the ministry of corporate affairs. In case the accounting firms including the foreign ones continue to provide legal advice to their clients, the government too must intervene," Lalit Bhasin, president, SILF and managing partner, Bhasin & Co told Hindustan Times. "But if it does not solve the problem, we are ready to take up the issue in court."
{{/usCountry}}SILF general secretary and managing partner, Hammurabi & Solomon Manoj Kumar said "Even the practice of non-litigation matters by foreign law firms in India, by whatever name called, has to be in compliance with the provisions of Advocates Act, 1961."
The so-called big four of auditing have been offering all consulting services under one roof. A senior official at a foreign audit firm, who did not wish to be identified, said the matter needed to be looked into. "It is not a simple issue," he said.
"Advocates Act, 1961 only allows persons licenced by the Bar Councils to practice the profession of law in India, which management and accounting firms including the 'big four' do not comply with. The order of the Supreme Court therefore has to be implemented in letter and spirit by restraining such firms from practicing the profession of law," Kumar said.
ICAI president Jaydeep N Shah could not be contacted.