As Indian M&A activity grinds to a halt, recent reports suggest many of the estimated 200 Indian corporate lawyers recruited by London law firms face an uncertain future. Lack of Indian legal reform and the global financial crisis mean as the sector cuts costs, India experts face the axe.

Highly prized assets 3 years ago - if reports are correct - many face the challenge of securing jobs in slowdown India.

Attraction of India

With a legal system based on British Common law, and many laws introduced by Britain pre-1947 the market is familiar. Commenting recently on the attraction of India, Pratap Amin, Head of India at Freshfields Bruckhaus Deringer said, "There are historical ties between UK and India, for the UK, Latin America is a bit more remote".

Despite local bureaucracy and efficiency concerns, economic boom and spin-off corporate legal services provided strong pull. With deregulation the obvious next step, Magic Circle and top tier firms looked on impatiently. Anticipating deregulation, UK firms signed up talent to London-located India desks with sole aim of training up and sending back to establish a local presence.

Preferred emerging market

As recently as October 2008 research by Legal Week Intelligence highlighted closeness of UK - India legal sectors. Conclusion drawn - from 98 interviews with UK firms - was, based on volume of referred work; India was the most important emerging legal market. Along with UAE, more firms were thinking of opening offices in India than in any other emerging market.

Deregulation and economies stalls

Despite concerted lobbying from the UK, phased liberalisation may take a few more years. Protectionist objections - centered on working visas and the fact that while UK lawyers would be able to practice in India, no reciprocal agreement exists - appear to have been effective.

While 'demand' is sure to open up India, for the moment is doesn't exist. Under pressure Magic Circle firms face tough decisions over India, in the face of difficult regulatory conditions and financial uncertainty, can they invest more and retain top local talent?