"The considerable need for attorneys in Ukraine is created artificially" OLEH MALINEVSKIY, PARTNER AT EQUITY, STATES
— What impact did the introduction of the exclusive right of attorneys to legal representation have on the legal services market?
— Large intervention on the part of the Bar on the legal services market for business took place. For some time, these market segments coexisted in parallel: we are talking about "criminal" attorneys, who were more identified with the classical Bar, and lawyers specializing mainly in pro-Western transactional practices. Now there is a substantial convergence in practices: almost any transaction or loan can be the subject of legal proceedings, it is possible that with the criminal element. Therefore, many firms with strong corporate practices are forced to develop dispute resolution, to study what the Bar is, how to work with it and how to coexist.
With the introduction of the exclusive right of attorneys to judicial representation, the so-called attorney monopoly, huge need for attorneys was created artificially. This, in turn, created difficulties with admission to the profession. And I wouldn't say that it is so difficult to pass the Bar exam. The problem lies in getting into the exam. In some regions, the queues have been scheduled for more than a year.
Perhaps, understanding our realities, the state should meet the requirements of business and provide access to the Bar in line with the "single-window principle ", including training and passing exams, which is relevant for high-profile legal advisors with extensive experience of judicial representation who, due to various circumstances, have not received the status of an attorney. It would probably correspond to the way in which the profession of a court lawyer is developing in Ukraine.
— Are attorneys, or more precisely — law firms, ready for the increased workload?
— The question is comprehensive, and it is impossible to speak unambiguously about any unilateral influence and linear dependence. There has been a significant increase in demand for the services of attorneys, but we cannot say that this demand is qualified, it is rather technical in nature. If we are talking about the market’s top segment, in fact, the number of complicated cases did not increase, and the market structure won't change significantly. More work came into the middle and lower segments. Perhaps large law firms will get part of this work, but only within the framework of maintaining loyalty to existing clients and solving their technical judicial issues. In terms of the staffing situation, this entails a certain increase in demand for attorneys, but within a year or two the situation will level out.
Even the opposite situation is possible, that of an overabundance of attorneys. Let's not forget that parallel processes affecting the number of court cases have been launched. By the way, reduction in the number of court proceedings is a global trend. The development of alternative methods of dispute resolution, increase in the cost of the process, unification of judicial practice will help to reduce the number of appeals to courts in the long term.
— Has the fee policy on the market changed?
— At this period in time there is a trend towards raising the size of attorneys' fees. The cost of supply has also increased with the increase in demand; these are the laws of the market. But again, we don't know what will happen in two or three years time, when the hype subsides and the results of judicial reform in the form of reducing the burden on courts appear.
— What happens to the contingency fee due to the position of the Supreme Court (SC)?
— Let me disagree with the position of the SC, which placed the legality of calculating the contingency fee in doubt. After all, there is no direct prohibition in the law, while we should proceed from our market realities. There are enough examples where a project cannot be implemented without a contingency fee. A classic example is cooperation with the state-run Deposit Guarantee Fund. To a large extent, the failure to apply a contingency fee creates obstacles of access to justice if the client doesn't have the funds to finance legal costs. The contingency fee is an opportunity to get quality and the most effective legal assistance. This should be a legitimate option that the client has the right to choose in consultation with an attorney.
— To what extent are the existing rules of legal ethics adapted to the legal market?
— Issues of professional ethics can be viewed from two sides: regulatory and practical. From the regulatory viewpoint, we have regulated everything quite well. The Model Rules of Professional Conduct provide answers to many questions that may arise in relations between an attorney and clients, third parties, and state authorities. The behavior of attorneys on social media platforms has even been regulated in the most recent version of the Rules.
As to the practical component: the market is quite turbulent, there is an active battle for clients, not always civilized. The existing tools of disciplinary responsibility of attorneys do not always allow for an effective response to violations. Moreover, attorneys are not in a hurry to get things out in the open, there is a certain union solidarity and a trend towards settling conflicts without making them public.
Despite all the social importance of the Bar, it is primarily a business for many. And, unfortunately, the rules under which business and clients live often apply to law firms.
— Would you call the new procedural legislation pro-attorney?
— Since the constitutional rule on the exclusive right to judicial representation is implemented in new codes, in these terms they can certainly be absolutely considered as pro-attorney. On the other hand, the rights and guarantees for legal practice have not changed significantly. It is not necessary to talk about revolution in this question. There are also certain "hidden pitfalls". For example, the access of an attorney to the process. Despite the clear list of documents that an attorney must provide, some judges in this matter show sophistication worthy of a better cause. This is formalism, contrary to the purposes of introducing the attorneys monopoly: not only ensuring the provision of qualitative legal assistance, but also imposition of burden of proof of some formal points on the Bar institute.
On the other hand, attorneys do not have the opportunity to manipulate their procedural status, the attorney can no longer act as a "representative under a power of attorney". Accordingly, any procedural action by an attorney is under the control of disciplinary bodies.
In general, I see a pro-attorney message in the introduction of monopoly, but we cannot say that these changes are pro-attorney. However, it appears that there was no such goal.
— The professional community is actively discussing initiatives related to making changes to the special Law "On the Bar and Practice of Law". What is your position?
— By definition, the reform should bear fundamental changes, and not be limited to solving of some particular problems within the Bar.
In my opinion, the first stage of reform of the Bar was self-government, which we received already, the second one was monopoly, and we also received it. The third stage could be to obtain a qualitatively new status of attorney in criminal procedure, certain procedural tools, even if not equalizing attorneys with the prosecution, but expanding their ability to protect the interests of clients. But this is possible within the framework of the reform of the criminal procedure.
It almost seems like the things proposed now under the slogan of Bar reform are more necessary for the authors of the relevant legislative initiative for formal completion of judicial reform and early reboot of all bodies of Bar self-government. Most of the positive and necessary innovations for lawyers, standing at the forefront of the PR campaign for the draft law, can be implemented by making targeted amendments to the existing law and the Model Rules of Professional Conduct without the threat of escalating the next confrontation within the legal community.