U.K. Magic Circle firm Allen & Overy and Indian law firm Trilegal have ended their alliance, citing the lack of progress towards liberalization of the Indian legal market.
The Indian legal market remains closed to foreign law firms, which are not even permitted to have offices in the country. At the time Allen & Overy and Delhi-based Trilegal began their relationship in early 2008, there was some hope that reforms permitting foreign firms to enter the market would soon be enacted.
At the beginning of 2009, Clifford Chance entered into a similar agreement with Mumbai-based AZB & Partners.
But over the last few years, momentum towards liberalization has cooled, due in no small part to vocal opposition within the Indian legal profession. Clifford Chance and AZB ended their referral arrangement at the beginning of last year, also pointing to the lack of progress towards a market opening.
Earlier this year, Allen & Overy sought to reinvigorate the liberalization debate by commissioning a survey showing strong support for a legal market opening among both Indian corporations and law firms.
In a statement announcing their split, Allen & Overy and Trilegal said "the lack of progress towards legal sector liberalisation in India has led both firms to conclude their existing arrangement is restricting their ability fully to exploit the growing opportunities in India."
Jonathan Brayne, the London-based head of Allen & Overy's India practice, stressed that the break was amicable. "We have the highest opinion of Trilegal and we look forward to continuing to work with them when the opportunity presents itself, but also to collaborating with other Indian law firms," he said.
"We believe our relationship with Allen & Overy has been of great benefit to both firms," said Trilegal senior partner Anand Prasad in a statement. "But both sides agree that, in the absence of liberalization, each firm stands a better chance of increasing its market share by broadening our options for collaboration in the market."