REPORT - GROOTERHORST, Johannes_English 130628

Transcription

57th UIA CONGRESS
Macau / China
October 31 – November 4, 2013
THE FUTURE OF THE LAWYER
Date of the session: Saturday, November 2, 2013
FUTURE OF THE PROFESSION:
EVOLUTION OF THE STATUS OF THE
LAWYER, CHALLENGES IN THE
YEARS TO COME
A GERMAN POINT OF VIEW
Dr. Johannes Grooterhorst, Grooterhorst & Partner Rechtsanwälte,
Königsallee 53-55, 40212 Düsseldorf, Germany
Tel. 0049 211/86467-0, Fax 0049 211/131342,
JOHANNES.GROOTERHORST@GROOTERHORST.DE
© UIA 2013
THE FUTURE OF THE LAWYER’S PROFESSION
Our this year’s topic deals with “The Future of the Lawyer’s Profession”: In doing so, we intend to highlight current developments in the status of the lawyer as well as to define some challenges of the next
years to come.
I will say a few words about the situation of the lawyer in Germany. Therefore, in my view, it’s worth
developing some thoughts about the so-called “flood of lawyers” in Germany and the challenges for the
legal profession resulting from this.
Furthermore, I will report about the German answer to the Limited Liability Partnership which the German legislator has most recently provided by means of the so-called “partnership company with limited
professional liability”.
Additionally, I will offer some thoughts on the in-house lawyers, who are, according to professional law,
still not on equal terms with the self-employed lawyer.
Finally, in my opinion the fact deserves particular consideration regarding how competitions for clients,
which are currently widespread and in parts even stipulated by EU directives, are to be seen in the light of
the prohibition of representing conflicting interests applicable under German lawyers’ law.
To conclude, I would like to give a summary with an outlook on the years to come.
I.
“Flood of Lawyers” in Germany
The profession of a lawyer still enjoys a remarkable popularity in Germany. Almost 161,000 lawyers are
admitted to practice law today, which amounts to three times the figure compared to 1990. While there
was one lawyer for 5,000 citizens in 1950, the ratio has increased tenfold today; today there is one lawyer
for 499 citizens. On top of that, every year 3,000 new lawyers are admitted to practise law at the bar associations.1 This considerable figure of admitted lawyers is now practising law in more than 54,000 law
firms in Germany.2
1.
Lawyers as “Temporary Workers”
The consequences of the “flood of lawyers” is obvious: The job market for lawyers seems to be saturated;
even applicants with good examination certificates have difficulties in finding a position corresponding
with their expectations. This situation means that new trends arise such as “academic temporary workers”: Young, highly qualified lawyers who are recruited as “project lawyers” for legal departments and
big law firms. Such project lawyers are used to replace lawyers and their female colleagues who are on
parental leave, to cushion order peaks or to step in in case of complex large-scale projects.3
A job as a temporary worker is most certainly not what future lawyers imagined as a professional perspective at the beginning of their studies. Occasionally the education and training of German lawyers is
made responsible for this unsatisfactory situation. Hariolf Wenzler, managing director at the private
Bucerius Law School in Hamburg, for instance, is of the opinion: “We do not have too many lawyers.
However, there are too many lawyers without a profile”.4 The education and training of German lawyers
1
BUCHHORN Eva, Anwaltsschwemme – schwere Zeiten für Juristen, Manager-Magazin Online vom 25.06.2013.
DEUTSCHER ANWALTVEREIN / PROGNOS AG – Executive Summary, Der Rechtsdienstleistungsmarkt 2030
– Eine Zukunftsstudie für die deutsche Anwaltschaft, 2013, p. 3.
3
4
2
-1-
still practises in its focus case solutions in the style of expert opinions, thus shaping one’s knowledge
concerning the application of norms, and which is of help in the later profession of a judge, where rulings
on disputes are made on the basis of clearly defined legal requirements. In the lawyer’s profession clients
mostly have other problems: They want to get advice as a preventive measure, so that a dispute does not
arise in the first place. Wenzler sees the solution in the fact that lawyers prepare themselves well for the
needs and wants of their future clients and that – if possible – should already happen in the course of their
studies.
2.
Study on the Future of the Legal Services Market 2030
The German Lawyers’ Association has produced in cooperation with PROGNOS AG a study on the future of the German lawyers in which the legal services market 2030 is highlighted.5 Even if competition
among lawyers is getting considerably tougher due to an increasing number of lawyers or law firms respectively, the legal services market in comparison to other branches turns out to be relatively independent from the economic situation and from the season: The international economic and financial crisis, for
instance, has hardly had any negative impacts on the total demand for legal services in Germany so far
and enjoys – in terms of turnover – a good economic development, according to the study.
An additional pressure of competition for individual law firms also results from the increasing number of
non-legal service providers, which gained limited access to the field of extra-judicial legal service due to
the relatively new Legal Services Law (“Rechtsdienstleistungsgesetz – RDG”). At least in the area of
accident settlements, it is car dealers, workshop operators, experts and rental car companies, but also insurance companies and banks and other financial advisors who increasingly appear as competitors for
advisory mandates for legal services. I reported in detail about the Legal Services Law (“Rechtsdienstleistungsgesetz – RDG”) on the occasion of the UIA Congress in Bukarest in 2008.
Competition makes it necessary to externally position one’s own law firm in a targeted manner on the
basis of suitable strategies of competition and marketing measures and to strengthen the visibility of one’s
own law firm.6 Field interviews carried out by PROGNOS AG for the German Lawyers’ Association
helped to find out that a high number of German law firms does not pursue an explicit strategy of competition in order to successfully position itself on the market. The prevailing strategy is the professional
specialisation, which is perceived on the market both as a quality feature and an expression of competence.7 A further strategy is to focus on selected mandate segments which increase the more the law firm
grows. Finally, there is the active definition and profiling of business areas, the provision of accompanying services or the development of new legal products and services; however, this strategy is pursued –
according to the enquiries of PROGNOS AG – almost exclusively by large-scale law firms.8 The marketing efforts and the acquisition of clients of the law firms associated hereto must be oriented along the
requirements under advertising law of the lawyer’s right to advertise. A widespread, non-focussed address
of clients is predominant among law firms, for example, by means of their website and/or entries in directories or enquiry services, as well as by measures for opening up target groups on the part of the clients,
visiting events and congresses to promote the network and, last but not least, carrying out seminars and
talks.
5
DEUTSCHER ANWALTVEREIN/ PROGNOS AG – Executive
– Eine Zukunftsstudie für die deutsche Anwaltschaft, 2013.
6
7
8
-2-
Summary, Der Rechtsdienstleistungsmarkt 2030
Even the organisation of the law firm itself requires a professional client management, which according to
the enquiries of PROGNOS AG may still be considerably improved in the landscape of German law
firms.9 After all, the internal organisation of the law firm has been increasingly professionalized. This
involves the documentation of workflows, control mechanisms and the creation of an electronic client file
based on software.
If a law firm wants to maintain its competitive edge in an environment of increasing competition, human
resources management should not be forgotten, since members of staff and their respective know-how are
considered to be the most important factors of competition, according to the study of the future. Here the
growing need among the members of staff for compatibility between family and work or, more generally
speaking, a concerted work-life balance plays more and more a role.
The German Lawyers’ Association and PROGNOS AG analysed future trends and their repercussions on
the legal services market for the year 2030.10 According to the economic forecast of PROGNOS AG, a
minor growth of the GDP of 1,0% per annum can be expected until 2035, with the majority of the German gross added value lying in the service sector in the future, in which trade, company services – incl.
legal services – and the health sector will develop with particular dynamism, and thus presumably producing in total 47% of the overall gross added value in 2035.11
These economic developments have to be harmonized with the social trends, because also the social
structures will change in Germany until 2030. The population forecast assumes minus 3,3%, thus a decrease of the population from 81 m. to 79 m., whilst the tendency of an aging population in Germany has
be taken into consideration: The ratio of the population of retirement age and the population of working
age will increase from 34% to 51%.12 This demographic change will also lead to noticeable changes
among all lawyers in the long run, even if the population ages faster than the group of lawyers. According
to the German Lawyers’ Association this development cannot automatically be stopped, even in the longterm, by an internationalisation of lawyers in Germany, because language barriers as well as the requirement of excellent country-specific legal knowledge pose obstacles for foreign lawyers and their female
colleagues in entering the market in Germany.13 The share of women among lawyers will grow significantly, thus attributing yet more prominence to the issue of childcare and of family-friendly working conditions in the economy, in politics and society in the future, especially because the self-image of fathers
changes and because even men more often (intend to) take some time out from work on the grounds of
childcare.14
Future generations have changing needs with respect to work organisation and culture: Not only an improvement of the relationship between family and work is the focus, but generally a stronger balance between work and other areas of life.15
9
DEUTSCHER ANWALTVEREIN/ PROGNOS AG – Executive Summary, Der Rechtsdienstleistungsmarkt 2030
10
– Eine Zukunftsstudie für die deutsche Anwaltschaft, 2013, p. 9 ff.
11
prognos AG, Weltreport 2012: Daten, Fakten und Prognosen für 42 Länder.
12
13
14
15
DEUTSCHER ANWALTVEREIN/ PROGNOS AG s – Executive Summary, Der Rechtsdienstleistungsmarkt
2030 – Eine Zukunftsstudie für die deutsche Anwaltschaft, 2013, p. 15.
-3-
II.
PARTNERSHIP COMPANIES WITH LIMITED PROFESSIONAL LIABILITY
On June 13, 2013 the German Bundestag passed a law regarding the introduction of a partnership company with limited professional liability. Later, on July 5, 2013 that law also passed the German Bundesrat.
Thus a gap in the system was closed, which represents an adequate alternative for lawyers to the Limited
Liability Partnership based on Anglo-American law.16 This new law results from the recognition that
someone who propagates the international competitiveness of the German legal system cannot accept in
the medium term that German types of companies are given up for the benefit of foreign legal structures.17
Actually, the current concept of liability of the partnership company has been deemed unsatisfactory by
the lawyers, even though the traditional partnership company already provides for a concentration of liability for professional malpractice on the acting professional (§ 8 Sec. 2 German Partnership Act –
“Partnerschaftsgesellschaftsgesetz - PartGG”). Practical problems, however, occurred in particular where
partnership companies exceeded a certain size and where mandates within the professional association
were worked on by several professionals or teams respectively. It became more and more difficult for the
various specialized partners to be able to have a complete overview of the job contributions of the others
and to share the responsibility.18 According to the new liability regime liability for professional malpractice will be limited to the partnership assets (§ 8 Sec. 4 Sent. 1 PartGG new version). If individual partners beside their activity in the partnership accept mandates or orders in their own name, liabilities resulting from those do not come under the limitation of liability, which also applies to claims under tort law
that are directly addressed to an acting partner. Even other liabilities – such as those resulting from leases
or employment contracts – are not covered by the new limitation of liability.
A condition for the legal limitation of liability of the new partnership company is the existence of an increased professional liability insurance of a total of € 2.5 m. per case of damage. With this the amount
insured has increased tenfold compared to the general regulation concerning the professional liability
insurance of € 250,000 (§ 51 Federal Lawyer’s Act – “Bundesrechtsanwaltsordnung – BRAO”) (comp.
§ 51 a Sec. 2 BRAO new version). The tenfold increase of the minimum amount insured serves the purpose of protecting the clients and compensates the absence of personal liability.19 As a rule the insurance
cover is higher than the assets of the male or female lawyer, so that the client has a higher level of security in case of damage.20
In case of a partnership company with limited professional liability the insurer cannot exclude insurance
cover for claims for compensation on the grounds of an intentional breach of duty.21
16
DAHNS Christian, Die neue Partnerschaftsgesellschaft mit beschränkter Berufshaftung, Neue Juristische Wochenschrift-Spezial 2013, p. 446 f.; PRESSEMITTEILUNG DES DEUTSCHEN ANWALTVEREINS vom
14.06.2013, Neue Rechtsform für Freiberufler in Aussicht: Die PartGmbB; PRESSEMITTEILUNG DES BUNDESMINISTERIUMS DER JUSTIZ vom 05.07.2013: Eine Alternative für die freien Berufe – eine Lücke im System wird geschlossen.
17
PRESSEMITTEILUNG DES DEUTSCHEN ANWALTVEREINS vom 14.06.2013, Neue Rechtsform für Freiberufler in Aussicht: Die PartGmbB.
18
DAHNS Christian, Die neue Partnerschaftsgesellschaft mit beschränkter Berufshaftung, Neue Juristische Wochenschrift-Spezial 2013.
19
DAHNS Christian, Die neue Partnerschaftsgesellschaft mit beschränkter Berufshaftung, Neue Juristische Wochenschrift-Spezial 2013; PRESSEMITTEILUNG DES DEUTSCHEN ANWALTVEREINS vom 14.06.2013, Neue
Rechtsform für Freiberufler in Aufsicht: Die PartGmbB.
20
PRESSEMITTEILUNG DES DEUTSCHEN ANWALTVEREINS vom 14.06.2013, Neue Rechtsform für Freiberufler in Aussicht: Die PartGmbB.
21
DAHNS Christian, Die neue Partnerschaftsgesellschaft mit beschränkter Berufshaftung, Neue Juristische Wochenschrift-Spezial 2013, p. 447.
-4-
This law is designed to counteract the trend of law firms of joining up in the form of an LLP and also
provides a long-awaited alternative for smaller partnerships of freelancers.22
III.
NO LEGAL PRIVILEGE FOR IN-HOUSE LAWYERS
On September 14, 2010 the European Court of Justice gave a much-noticed ruling concerning the confidentiality of legal advice for in-house lawyers23. At that time the commission confiscated in the context of
EU antitrust law proceedings the business correspondence on the business premises of AKZO NOBEL
Chemical Ltd. & Akcros Chemicals Ltd. That also included e-mails which an Akcros manager exchanged
with an in-house lawyer of AKZO NOBEL who at the same time was admitted to practise law as a lawyer
in the Netherlands. The result of the judgement of appeal of the European Court of Justice was as follows:
In EU antitrust law proceedings written communication between a company and its in-house lawyer is not
protected within the context of an internal mandate. It is true that the European Court of Justice confirms
the confidentiality of legal advice as a general principle under community law and also classifies the inhouse lawyer as a lawyer – but not quite.24 According to the European Court of Justice the independence
of the lawyer is not already documented by the admittance of the lawyer to the bar and, therefore, its associated binding force under professional law, but, additionally, the absence of any employment relationship between the lawyer and the client must be assumed at the same time. The in-house lawyer specifically is not as independent from his client in spite of his admittance to the bar association and the binding
force under professional law, as an external lawyer. On the basis of the above the confidentiality of legal
advice cannot be extended to correspondence with in-house lawyers within the company, because the inhouse lawyer is in the situation of a dependent employee seen from an economic point of view and due to
the close connection to the employer.
Therefore, according to the European Court of Justice, the communication with a lawyer is only protected
by confidentiality if two prerequisites co-exist: (1) The correspondence must be associated with the client’s right of defence and (2) it must be correspondence initiated by external lawyers, i.e. by lawyers who
are not bound to the client by any contract of employment.25
In accordance with this requirement, essentially two aspects will be decisive for companies operating in
Germany when the question arises whether a document has to be handed over in the context of searching
premises under antitrust law: Who investigates? Is the internal or external correspondence affected? In
investigation proceedings of the European Competition Authority the communication between in-house
lawyers and external lawyers is covered by the Legal Privilege; not protected, however, is the internal
communication between the legal department and members of staff in one’s own company. If the Federal
Cartel Office investigates, even stricter conditions apply: With respect to correspondence with external
lawyers it depends on who is in possession of it; documents which are held by the external lawyer, are not
allowed to be confiscated – unless the lawyer himself is charged. This shall not apply, however, if the
documents are stored in the legal department of a company, even if they are from an external lawyer and
are even marked as “exempt from confiscation”. Nonetheless, if the in-house lawyer has no exclusive
safekeeping with respect to those documents – which will be rather rarely the case – they are subject to
confiscation.26
22
PRESSEMITTEILUNG DES BUNDESMINISTERIUMS DER JUSTIZ vom 05.07.2013: Eine Alternative für die
freien Berufe – eine Lücke im System wird geschlossen.
23
EUROPÄISCHER GERICHTSHOF, Urteil vom 14.09.2010 - RS C – 550/07 P, Anwaltsblatt 2010 p. 796.
24
MARX Thomas, Syndikusanwalt: Die Zeit heilt keine Wunden, Anwaltsblatt 11/2010, p. VI.
25
WIRING Roland, Kartellrechtliche Durchsuchungen: Inhouse-Juristen weiter ohne Anwaltsprivileg, Legal Tribune Online, 17.09.2010.
26
WIRING Roland, Kartellrechtliche Durchsuchungen: Inhouse-Juristen weiter ohne Anwaltsprivileg, Legal Tribune Online, 17.09.2010.
-5-
In the meantime Belgium as well as the Netherlands have both confirmed in recent rulings the in-house
privilege and have made it clear that they do not see themselves bound by the AKZO NOBEL ruling of
the European Court of Justice.27
The court of appeal of Brussels thus ruled that the advice of company lawyers and its associated correspondence was subject to confidentiality under Belgian law and that the Belgian Cartel Authority would
not gain access to such documents. This would even apply if it acted on behalf of the EU Commission.
Belgium laid down the privilege for company lawyers in 2000, whereupon, however, the Belgian Cartel
Authority announced in 2008 not to accept that privilege anymore. Without success, as the ruling of the
Brussels court of appeal now demonstrates. Soon after that the highest court of law of the Netherlands
confirmed the lawyer’s privilege of company lawyers as well.28
German lawyers deem the ruling as being significant beyond Belgium and the Netherlands, because it has
to be understood as a reaction to the AKZO-NOBEL ruling supported by member states. In fact, even
though the European Court of Justice had denied in that ruling in-house lawyers the legal privilege only
with reference to antitrust law proceedings, the ruling was (wrongly) seen as a general denial of a confidentiality protection for in-house lawyers, according to Michael Scheer, vice chairman of the consortium
of in-house lawyers in the German Bar Organisation.29
In Germany the political discussion has only recently gained momentum against the background of the
AKZO-NOBEL ruling; so far a result has not yet emerged.30
IV.
THE PROHIBITION OF REPRESENTING CONFLICTING INTERESTS UNDER PROFESSIONAL LAW
There is still another topic dealing with the professional status of lawyers:
According to the professional regulations for lawyers (“Berufsordnung der Rechtsanwälte – BORA”) a
lawyer is not entitled to represent conflicting interests. The prohibition of a collision of interests is part of
the main obligations - even safeguarded under criminal law – of the legal profession.31 At a first glance it
may not look that difficult to define when a collision of interests occurs. However, difficulties tend to
arise when
it cannot be specified without problems whether in the case of facts that are somehow related it is
the same legal case or a different matter;
it is not clear whether interests of various people are similar or conflicting;
it is not clear, whether similar interests of various persons are competing;
interests change and/or
27
JUVE RECHTSMARKT 8/2013: Belgien und Niederlande bestätigen Inhouse-Privileg – Gerichte fühlen sich
nicht an AKZO-NOBEL-Entscheidung gebunden, p. 48.
28
nicht an AKZO-NOBEL-Entscheidung gebunden.
29
30
31
OFFERMANN-BURCKART Susanne, Interessenkollision – Was jeder Anwalt wissen sollte, Leitlinien und die
Situation nach der Neufassung von § 3 Abs. 2 BORA, Anwaltsblatt 2008, p. 446.
-6-
not only a single lawyer but various members of the same professional partnership are in the focus.32
The question of a collision of interests also arises with respect to so-called “beauty contests”, which occur
more and more often:
When dealing with the acquisition of major clients, it is common practice today, and with respect to
European public procurement law in parts even mandatory, to organize tenders or competition for clients
respectively. Even in the “normal” daily business of lawyers what increasingly happens is that potential
clients collect assessments and estimates from various law firms before placing an order with a law firm.
When looking at these aspects more closely, there may already be some prior professional or even legal
involvement which would have to prevent the lawyer who had not been considered to become active for
the counter party.33
Eylmann34 mentions as a further argument for a prior involvement in this sense the acceptance of a fee
mostly offered for one’s participation in tendering proceedings. An interpretation recognizing the purpose
of the law would have to conclude that the protective goods underlying § 43a Sec. 4 Federal Regulation
for Lawyers (“Bundesrechtsanwaltsordnung – BRAO”), are not jeopardized, provided the inviting company not only releases the non-mandated lawyers from their legal obligation of secrecy right from the
beginning, but also allows them to take on opposing mandates.
A further question in this context is, however, whether the consent of the client affected can generally
eliminate a breach of duty when representing conflicting interests.35
V.
OUTLOOK
The study on the future commissioned by the German Lawyers’ Association in cooperation with the
PROGNOS AG, which I have already mentioned, summarizes its enquiries with the message that every
single law firm needs its very own future strategy; however, the study made on the future naturally cannot
sketch or develop any patent remedy for lawyers.36 Central and comprehensive criteria of success for
lawyers in 2030 would be:
Lawyers in 2030 are competent as entrepreneurs.
Lawyers in 2030 will be specialized.
Branding will be important.
Lawyers in 2030 will be networked.
Not only specialisation is the objective, but holistic problem-solving, too.
Law firms will operate a highly efficient back office.
Lawyers in 2030 offer an attractive work environment.
Lawyers will be open towards new technologies.
32
33
34
EYLMANN, Bundesrechtsanwaltsordnung Kommentar, § 43 a BRAO Rdn. 137.
35
36
-7-
“We must use the time to leave conventional paths also in professional law; lawyers have to redefine
themselves: Over and over again!“37
37
-8-
NOTES AND REFERENCES
Articles:
BUCHHORN Eva, Anwaltsschwemme – Schwere Zeiten für Juristen, Manager-Magazin Online vom
25.06.2013
BUNDESMINISTERIUM DER JUSTIZ, Pressemitteilung vom 05.07.2013: Eine Alternative für die freien Berufe – eine Lücke im System wird geschlossen.
DAHNS Christian, Die neue Partnerschaftsgesellschaft mit beschränkter Berufshaftung, Neue Juristische
Wochenschrift-Spezial 2013
DEUTSCHER ANWALTVEREIN / PROGNOS AG – Executive Summary, Der Rechtsdienstleistungsmarkt 2030 – Eine Zukunftsstudie für die deutsche Anwaltschaft, 2013
DEUTSCHER ANWALTVEREIN, Pressemitteilung vom 14.06.2013, Neue Rechtsform für Freiberufler
in Aussicht: Die PartGmbB.
EYLMANN, Bundesrechtsanwaltsordnung Kommentar, § 43 a BRAO Rdn. 137
JUVE RECHTSMARKT 8/2013: Belgien und Niederlande bestätigen Inhouse-Privileg – Gerichte fühlen
sich nicht an AKZO-NOBEL-Entscheidung gebunden.
MARX Thomas, Syndikusanwalt: Die Zeit heilt keine Wunden, Anwaltsblatt 11/2010
OFFERMANN-BURCKART Susanne, Interessenkollision – Was jeder Anwalt wissen sollte, Leitlinien
und die Situation nach der Neufassung von § 3 Abs. 2 BORA, Anwaltsblatt 2008
WIRING Roland, Kartellrechtliche Durchsuchungen: Inhouse-Juristen weiter ohne Anwaltsprivileg, Legal Tribune Online, 17.09.2010
Case law citations:
EUROPÄISCHER GERICHTSHOF, ruling handed down 14.09.2010 - RS C – 550/07 P, Anwaltsblatt
2010 p. 796.
-9-

REPORT - GROOTERHORST, Johannes_English 130628

Transcription

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