Regulating Lawyers in a Liberalized Legal Services Market: Developments for the Corporate Counsel in the EU
Regulating Lawyers in a Liberalized Legal Services Market: Developments for the Corporate Counsel in the EU (Program)
Laura Bugatti, University of Brescia - School of Law (Italy); Bernd Mayer, Skadden, Arps, Slate, Meagher & Flom LLP (Germany); Nicola Zeibig, Leibniz University Hannover (Germany); and Hendrik Schneider, University of Leipzig (Germany) (Moderator)
Regulating Lawyers in a Liberalized Legal Services Market: Developments for the Corporate Counsel in the EU
Laura Bugatti: Time of Changes in the European Internal Market: Impact on the Legal Profession
The EU Institutions—starting from the Lisbona Strategy—have recognized the crucial role played by the professional services in improving the competitiveness of the EU economy. Accordingly, the Commission has launched several enquiries in order to give an economic perspective on the regulation of the liberal professions and has invited Member States to make an effort to remove restrictive rules which are unjustified, disproportionate and unnecessary to the public interest.
The EU initiative had and still has a profound effect on the professions' regulation all over Europe, but at the same time in high-regulated jurisdictions, like Italy, this process of reassessment is turning out to be troublesome.
Against this background the paper aims at investigating:
1. The changes and the new challenges faced by the legal profession imposed by the EU economic prospective taking into account: i) the justifications for the professional restrictive rules existing in several countries; ii) the costs and benefits of introducing competition mechanisms into legal services markets; and
2. The value, respectively for lawyers and consumers, of qualitative access restrictions (like minimum periods of education, professional experience, examinations) and restriction concerning the legal activities themselves (such as fixed prices, adverting rule and so on).
The paper addresses the final question of what kind and which level of restrictions should be more adequate to ensure the protection of consumers and the high quality of professional service, taking into consideration the openness of the market as well as the safeguard of the public interest
Hendrik Schneider: The Company in the Turtle Formation - Is the Limitation of the Legal Privilege for Company Lawyers under German Criminal Law Still Up-to-Date?
As companies expand across borders, investigations of potentially illegal business activities also take on a global dimension. Yet despite this trend, many laws have remained localized and failure to properly understand differences between jurisdictions can lead to unintended and perhaps negative results.
One area illustrating this paradigm is legal professional privilege (LPP), also referred to as attorney-client privilege. Common law jurisdictions have traditionally protected communication between the client and lawyer and civil law jurisdictions have recently followed suit. The rationale behind LPP is to encourage full and frank disclosure without fear that communication will be disclosed to third parties.
But although there is a general recognition of LPP, each jurisdiction has its own nuances and there is thus no global rule. A particularly grey area is whether LPP extends to in-house counsel during an internal investigation. While American courts can extend LPP in this situation, other jurisdictions have held that in-house counsel might not be sufficiently independent to warrant protection. Furthermore, some jurisdictions do not allow LPP to attach to non-national qualified lawyers, while other jurisdictions leave open this possibility.
As a result, a company that launches an internal investigation and wishes to protect legal communication or work product must be aware of a myriad of differences from the countries in which it operates. The purpose of this paper is to explore the development of LPP in relation to internal investigations throughout a selection of jurisdictions, with emphasis on the United States, United Kingdom, Germany, and the European Union.
Recently a new statutory regulation for in-house counsel was passed by both German legislative bodies, Bundestag and Bundesrat. It is a result of a decision by the Federal Social Court of Germany in which the Court held that the occupational field of in-house lawyers is profoundly different from that laid out in the Federal Lawyers’ Act (hereinafter, BRAO).
The new regulations stipulate that in-house counsel as well as lawyers fall within the scope of said law. This alignment is bound to raise questions how an in-house lawyer can reasonably be expected to adhere to the same standards of professional conduct that an independent lawyer has to honor. Professional independence on the one side and being subject to direction by superiors within the company, namely the board, will create a constant field of tension for in-house counsel.
Focusing on the cornerstones of professional conduct certain issues become apparent. First, the duty of a lawyer entails the prohibition to approach the other party without the consent of the opposing counsel, § 43 BRAO, § 12 Rules of Professional Practice, which will affect communication and negotiation with business partners. Second, under § 43 a para. 4 BRAO, a lawyer may not represent conflicting interests and as such will often be hindered to represent a parent company and its subsidiary. In a corporate structure where one legal department represents not only the parent company but also its subsidiaries, such conflicts of interests are bound to emerge.