Please forgive me for the delay in posting Laurel Terry's terrific list of the Top Ten International Legal Profession Stories of 2012. Most of readers know that Laurel has been writing on the international aspects of our field for many years. Further information on all of these developments will appear in Laurel S. Terry, Transnational Legal Practice Developments Outside the U.S.: 2010-2012, 47 Int’l L. __ (2013)(forthcoming).
Top Ten International Legal Profession Stories of 2012
Laurel Terry (LTerry@psu.edu), Penn State Dickinson School of Law, USA
- 1. ABS Goes Live in the UK
As reported in John Steele’s Top Ten Legal Ethics Stories of 2012 (Item #3), 2012 was the year that the UK Solicitors Regulation Authority issued alternative business structure licenses. The stage had been set by the 2007 UK Legal Services Act which created a regulatory framework that allowed (and arguably encouraged) ABS. After years of discussion in articles and at conferences, it finally happened. I predict that ABS will dramatically reshape legal services not only in England and Wales, but elsewhere in the world. ABS licenses have been issued to, among others, The Co-Operative, which is a mutually-held company that operates grocery, travel, financial services, and funeral service businesses and plans to add 3,000 solicitors in the next five years to challenge the traditional “High [Main] Street” firms. Additional ABS licenses have been issued to an arm of Australian publicly-traded law firm Slater & Gordon (Russell Jones & Walker), UK firm Irwin Mitchell, legal expenses insurer Abbey Protection, a claims management company called Parabis that has private equity backing, and a consultancy headed by Cherie Booth QC. Transatlantic law firm DLA Piper has an ownership interest in LawVest, which reportedly has applied for an ABS license.
- 2. The Influence of the Troika
The Troika refers to the International Monetary Fund, the European Central Bank, and the European Commission. The Troika has become influential in lawyer regulation as it has put pressure on financially troubled European countries such as Ireland, Portugal, and Greece to reform their systems of lawyer regulation as a condition of the bailouts. In December 2011, the ABA and the CCBE (the umbrella organization for EU bars and law societies) became so concerned about the Troika’s actions that they issued a joint letter to IMF Managing Director Christine Lagarde expressing concerns about the impact of its actions on the independence of the legal profession. Although the IMF has said there is no reason to be concerned, the influence of the Troika is a development worth watching. Professor John Flood has a number of useful blog entries here, here, and here; they include links to the underlying IMF documents.
- 3. Market Liberalization in Countries Such as Korea, Singapore, and Malaysia
A number of countries liberalized their legal services markets, providing greater access to foreign lawyers. The Korea-U.S. Free Trade Agreement (KORUS) took effect in March 2012 and by summer 2012, more than a dozen U.S. law firms had opened up offices in Korea. In 2012, Singapore announced that it would be issuing additional Qualified Foreign Law Practice license; this is part of its effort to become a global legal hub. Other jurisdictions that liberalized include Malaysia and the Shanghai Bar Association, which invited foreign lawyers to become special members in a dramatic turn-around from its 2006 request to the Ministry of Justice to crack down on foreign firms.
- 4. Market Access Contraction in Brazil and Vietnam
2012 may have provided examples of market liberalization for foreign lawyers, but there were also high profile market access contractions. Global firms and commentators expressed concerns during 2012 about the actions of Brazil’s national bar association, which voted in favor of strict regulations that forbid formal alliances between Brazilian lawyers and foreign legal consultants or their law firms. The national bar association vote followed on the heels of several well-publicized opinions from the Sao Paulo branch of the bar association that had reached similar conclusions. Vietnam has also called for more restrictions on foreign law firms.
- 5. Developments in India’s Ongoing UPL Saga
India has been a leading source of stories in the past few years as the UPL cases against US and UK law firms have worked their ways through the various Indian courts. The latest developments include a February 2012 Madras High Court decision that dismissed a lawsuit brought by an Indian lawyer against thirty-one foreign law firms, ruling that foreign lawyers were entitled to participate in international arbitration proceedings in that country and to advise clients on foreign law on a "fly in fly out" basis. (The Madras High Court also ruled that the legal process outsourcing defendants were not covered by the Advocates Act.) This Madras decision stands in contrast to a 2009 Bombay High Court decision and has been appealed to the Supreme Court, which issued an interim order on July 4, 2012. The proceedings are ongoing.
- 6. FATF and Gatekeeper Developments:
In 2012, the Financial Action Task Force (FATF) adopted a revised version of its recommendations which are designed to prevent money laundering and terrorism financing, some of which the ABA considers problematic. The FATF also decided to conduct a “typology” study to learn more about whether and how lawyers are involved in facilitating money laundering – a decision which the legal profession welcomed. ABA representatives continue to be actively engaged with U.S. government and FATF representatives regarding “gatekeeper” issues. The ABA has also continued its outreach efforts to publicize the ABA’s Voluntary Good Practices Guidance for Lawyers to Detect and Combat Money Laundering and Terrorist Financing including a February 2012 presentation to the National Organization of Bar Council which also included representatives from the U.S. Treasury Department, the U.S. Depart of Justice and the U.S. Attorney for the Southern District of New York. So far, the U.S. federal government has been willing to rely on the legal profession’s efforts in implementing the FATF.
- 7. U.S. Action (and inaction) Regarding the Accreditation of Foreign Law Schools and Full Admission Applications from Foreign Lawyers
Although this item technically involves U.S. events, rather than international events, I have included on my Top 10 International Legal Profession Developments list various U.S. actions related to foreign lawyers. Two of these items involve inaction – in September 2012, the Council of the ABA Section of Legal Education and Admission to the Bar decided to take no action with respect to the accreditation of foreign law schools. (The Peking University School of Transnational Law had indicated that it would seek ABA accreditation if the accreditation rules were changed.) The Council similarly failed to take any action with respect to its International Committee’s recommendation regarding a Model Rule on Admission of Foreign Educated Lawyers and Criteria for ABA Certification of an LLM Degree for the Practice of Law in the United States. Both the foreign accreditation possibility and the foreign lawyer full admission model rule had been the subject of criticism when circulated for comment. (It is also noteworthy that in August 2011, the Conference of Chief Justices rescinded its 2007 resolution in which it asked for ABA assistance).
In contrast to the ABA Council’s failure to act, there were several noteworthy state actions including an amendment to New York Rule 520.6, which governs the ability of foreign LL.M. students to sit for the New York bar exam and which took effect in April 2012; Wisconsin’s 2012 rule change that allowed foreign-educated applicants who had obtained an LL.M. to sit for its bar exam; Minnesota’s 2012 admission of a foreign-educated New York lawyer (pursuant to its 2011 rule change); and Georgia’s December 2012 adoption of a rule permitting foreign in-house counsel. Another noteworthy event was the ABA 20/20 Commission’s submission of the inbound foreign lawyer proposals for consideration by the ABA House of Delegates in February 2013.
- 8. New Resources Available Regarding Legal Practice and Admission Outside the U.S.
I find it surprising that as of 2012, it is still difficult to find out information about lawyer regulation elsewhere in the world. EU Directives, such as 98/5 and the CCBE’s webpages make it easy to find out the titles and rules that apply to EU regulated lawyers, but beyond that it can be difficult to find this information. Luckily, several new resources appeared in 2012 that should help. They are the publication of the APEC Legal Services Inventory, the publication of the ABA Guide to International Bar Admissions, the Canadian FLSC’s ongoing consolidation of admissions, discipline, and ethics (here and here) information, and the IBA’s effort to consolidate lawyer regulatory information (click on “Countries” for links to ethics codes). If the new international network of lawyer regulators (described below in item #9) takes off, it can provide an additional source of information. (U.S. information is aggregated in several spots, including websites of the ABA, NCBE, and NOBC.)
- 9. Formation of an International Network of Legal Regulators
In September 2012, the U.K. Solicitors Regulation Authority (SRA) hosted the first ever International Conference of Legal Regulators. This two-day conference, which had more than 100 attendees from Australia, Africa, Asia, Canada, the U.S., and the U.K., seemed to demonstrate a pent-up demand among “day job” lawyer regulators to discuss the challenges they faced and regulatory approaches. During the final session, attendees indicated by a show of hands their interest in continuing their communication and collaboration. They also agreed to meet in San Francisco in August 2013, as an adjunct to the National Organization of Bar Counsel meeting. U.S. attendees included representatives from the National Conference of Bar Examiners, the Conference of Chief Justices, and the National Organization of Bar Counsel. Although attendees were positive, at least one commentator has suggested that it would be better to have the International Bar Association or another existing entity serve this “network” function. Further information about this conference is available here (Legal Futures blog), here (Law Gazette), here (SRA press release), here (Solicitors’ Journal) and here (PSU news item).
10. National Developments
During the past year, there have been a number of significant legal profession developments in Australia, Canada, the EU, and the U.K, among other places. The Canadian developments are set forth in Alice Woolley’s blog entry entitled The Top Ten Canadian Legal Ethics Stories – 2012. I hope that John Steele can find contributors who will create “top 10” lists devoted to Australia, the EU, and the UK. In the meantime, some of the noteworthy developments of which I am aware include Australia’s National Legal Profession Reform, which has been percolating for years; the UK’s updated SRA Handbook, which uses an outcomes-focused approach to regulation; the UK Legal Services Board’s request for research and advice on many issues, including the “cab rank” rule for UK barristers. Its reports and research initiatives are important sources of information, along with consultations by the Legal Services Board, the Solicitors Regulation Authority, and the Bar Standards Board. Noteworthy EU developments include: 1) the September 2012 European Court of Justice case that denied in-house counsel the right to appear before it (following up on the 2010 Akzo Nobel case which also took a restrictive view of the rights of in-house counsel); 2) the ongoing work on the E-Justice portal; 3) the ongoing ten year review of the EU’s Lawyers Establishment Directive [98/5]; and 4) a number of important money laundering developments including the European Court of Human Rights Michaud case, and a review of the 2005 EU money laundering directive which is expected to lead to the issuance of a new directive.
Further information on all of these developments will appear in Laurel S. Terry, Transnational Legal Practice Developments Outside the U.S.: 2010-2012, 47 Int’l L. __ (2013)(forthcoming).