Single Post
homeBlogs
homeBlogs
By: OOC
By Allan Ong’ato, Esq
Law as a Business has sought to be distinguished from Law as a Profession. Extracts from article by Champ S. Andrews titled The Law: A Business or a Profession?[1] makes an attempt at providing the perceived distinction between the Law when it is practiced as a Business and when it is practiced as a Profession in an apparent conversation between a law student and a distinguished jurist in which the distinguished jurist attempts to answer the law student’s questions. It states thus –
“But I would have the profession schools honest with the youthful enthusiast who knock portals. I would have them say, choose between the law as a business and the law as a profession. If you decide on law as business, then strip the calling of its arrogance and cant. Quit posing as a superior being, as a protector of the weak, as a man who prefers the reward of duty performed to services paid for. Let the schools tell also, that as a business, it is a precarious one and brings on the average, more labor and drudgery and less rewards than any one of a dozen callings, such as manufacturing, financiering, bridge building, or exporting. There are no union hours and few divisions of labor, but many walking delegates in the law.
If the young man decides to enter it as a profession, let him be told of what severe stuff the heroes of the bar are made. Let him realize that the sacrifices he will make and the rewards he will achieve are different, utterly different from men in other walks of life. Do not let him expect to reap both the rewards of a business career and a professional one, for the man who achieves this difficult feat is rarer than a Shakespeare or an Angelo.
Again at the end of a law course, the school should say that it is a good thing for every man to be trained in the ways of the law-that the years devoted to its study will not be wasted years, even though they conclude they are not heroic enough to become real professional lawyers, and not skillful enough as captains of industry to make law business pay. Training in law school will make better men and broader ones in whatever walk of life the student may go.
The article goes on to paint the picture of the law when it is practiced as a business in the following terms –
“In older countries, England particularly, men have some independent income as a rule on entering the law. Under such circumstances it can be practised as a profession. In the United states ninety-nine out of a hundred lawyers practice it for all it is worth as a living. They are foolish enough to think that the industrial competition will not operate against them in the competition, but this illusion is too obvious to deceive the philosopher. Half of the lawyers who appear before me fight each other with personalities and innuendoes far more than with weapons of the law. All the old courtesy and gentle deportment that once characterized the profession has gone, and in has come a rough and tumble scramble on the floor of the forum. Anything to win is the motto, and with thousands of young men crowding the profession every year, where only a few are needed, there seems very little hope that the law of supply and demand, of economic competition will leave the law anything but a sordid trade, based still on the false pretense that it is a dignified professional calling.”
Law as a Business generally has a bad perception amongst the general public. Many people consider Lawyers in business as money hungry people motivated by greed and who produce nothing. The following extract in an article by Norman Bowie titled The law: from a Profession to a Business[2] aptly describes this as follows –
The public believes that the practice of law has become a business. They also believe that lawyers are in the profession for the money and that everything a law firm does is motivated by greed-well not everything, in L.A. Law lawyers are motivated by greed and lust. Allegedly, lawyers overcharge, create work, and delay in order to make more money. In return lawyers produce nothing useful; they do not make cars, steel, or heavy machinery. They are perceived by many as social parasites who make a handsome living off the productive labor of others. Economists note that the United States’ workforce has a higher percentage of lawyers than that of Japan.’ Economists argue that it would be better for American business if more of our best and brightest would be engineers rather than lawyers.’ Arguably, lawyers merely redistribute income. Because the best lawyers work for powerful corporations where the money is, the legal profession as a whole shifts money from the poor to the rich.’ The public perceives lawyers as being worse than business people because in addition to being motivated by greed-as business people are-lawyers produce nothing useful.
Traditionally, business has not been viewed as a profession. The chief characteristic that distinguishes it from a profession is the motivation of business people. Business people are perceived to be egoistic; their primary motivation, according to economic theory, is to maximize their self interest. This lack of altruistic spirit is sufficient to distinguish business from the professions.
Arguably, the competitive egoism of the market is better for the public than altruism. Adam Smith is the father of this view and Milton Friedman is the most famous of his progeny. Business contributes to the public good whether or not it is considered a profession.
Norman Bowie argues that Lawyers might apply this same rationale. He argues that if lawyers give up the pretense of being altruistically motivated and admit that they are in it for the money, the public still benefits. Self-interest causes zealous client advocacy, which in turn promotes legal justice. Through a kind of “invisible hand”-the clash of lawyers jealously advocating client interests- the appropriate decision is reached. Lawyers increase their income by defending their clients zealously but this zealous advocacy contributes to the public good.
If the law is to remain a profession in the traditional sense, it must not lose its traditional mission. That is the danger in the era of specialization, large firms, and association with corporate clients.[3]
The functions of the law are: to enable a large mass of diversified human beings to live together,”[4] to serve as a repository of society’s most cherished values, and to promote justice.
Lawyers behave altruistically so long as they enter the profession and make legal decisions with an eye toward promoting human interaction, society’s cherished values, and justice.[5]
This having been said, Plato in his famous book De Republica stated that you can do good and still do well.[6]
Law firms
In Kenya, law as a business is mostly undertaken through law firms. Only persons admitted as Advocates of the High Court of Kenya pursuant to provisions the Advocates Act[7] are allowed to register law firms and to practice law on their own behalf in Kenya.[8] One can choose to register the law firm as a sole proprietor or as a partnership in accordance with provisions of the Partnerships Act[9] or Limited Liability Partnership under the Limited Liability Partnerships Act[10].
Upon registering a Law Firm and before starting to take instructions from clients, every Advocate must purchase an insurance police of not less than Kshs. 1 million. If practicing in partnership or as limited liability partnership, the professional indemnity cover shall be purchased in common.[11]
The professional indemnity cover shall be used in the compensation of clients for loss or damage from claims in respect of any civil liability or breach of trust by the advocate or his employees.[12]
Practicing Certificate
An Advocate is also required to take out a practicing certificate for every practice year which shall begin from 1st January to 31st December of every year.[13]
Client account
An Advocate running a law firm is required to keep a client account. A client account may be one or several as an Advocate or Advocates think necessary.[14]
The purpose of a client account is for keeping all client’s money held by an Advocate. It may be a current or deposit account at a bank or with a building society or a financial institution as defined in the Banking Act[15] in the name of the advocate(s) but in the title of which either the word “client” or the word “trust” appears;
The Rules[16] describe client money as follows –
“client’s money” means money held or received by an advocate on account of a person for whom he is acting in relation to the holding or receipt of such money either as an advocate or, in connexion with his practice as an advocate as agent, bailee, trustee, stakeholder or in any other capacity, and includes— (a) money held or received by an advocate by way of deposit against fees to be earned or disbursements to be incurred; and (b) money held or received as or on account of a trustee, whether or not the advocate is sole trustee or trustee with others, but does not include— (i) money to which the only person entitled is the advocate himself, or in the case of a firm of advocates, one or more of the partners in the firm; nor (ii) money held or received by an advocate in payment of or on account of an agreed fee in any matter;
An Advocate (or Advocates as the case may be) is required to at all times times keep, properly written up, such books of account as may be necessary to show— (a) every receipt by him of client’s money, for each separate client; and (b) every payment or application by him of or from client’s money, for each separate client; and (c) the amount held by him for the time being in a client account, for each separate client; and (d) the moneys expended by him for, and the costs charged by him to, each separate client.[17]
The books of account referred to above include— (a) either— (i) a cash book in which to record every transaction involving client’s money or other money dealt with by the advocate through a client account, and a separate cash book in which to record every transaction involving the advocate’s own money and relating to the affairs of clients; or (ii) a cash book ruled with two separate principal money columns on each side, one such column for recording every transaction involving client’s money or other money dealt with by the advocate through a client account and the other for recording every transaction involving the advocate’s own money and relating to the affairs of his clients; and (b) either— (i) a ledger in which to record every transaction involving client’s money or other money dealt with by the advocate through a client account, and a separate ledger in which to record every transaction involving the advocate’s own money and relating to the affairs of his clients; or (ii) a ledger ruled with two separate principal money columns on each side, one such column for recording every transaction involving client’s money or other money dealt with by the advocate through a client account and the other recording every transaction involving the advocate’s own money and relating to the affairs of his clients; and (c) a record showing particulars of all bills of costs delivered by the advocate to his clients, distinguishing between profit costs and disbursements.[18]
Every advocate is required to preserve for at least six years from the date of the last entry therein all books of account required to be kept by him.[19]
Before the Practicing Certificate of an Advocate who has handled client money is renewed, one of the requirements is an Accountant’s Certificate indicating that the Advocate’s books of account are in order.
Marketing and Advertising
In the article by Champ S. Andrews referred to earlier, the distinguished jurist remarked as follows –
‘A young lawyer once complained to me that he had to work all night to get business, and all day to take care of it. In nearly every large firm in our great cities the indispensable partner is ‘the business getter.’
It is hard to imagine having a successful business without clients. To get the clients, a business must embrace marketing and advertising. Like any other business therefore, the lawyers too need to have a marketable product.
Lawyers do not have a blank cheque to market and advertise like in the other businesses. There are rules[20] in place which outline the legal strictures within which Advocates may market or advertise their practice.
An Advocate may only advertise in the following forms[21] –
(a) in a non-legal or non-professional directory; (b) in a legal or professional directory; (c) in a website or other digital platform on the internet; (d) in the print media including in a newspaper, magazine, booklet, periodical or journal: Provided that the advocate shall only advertise in a print medium up to four times in any given year and the advertisement shall measure not more than 0.210m x 0.297m; or (e) in the form of a plate or a plaque at the entrance to the advocate’s or advocate’s firm’s ordinary place of business and the plate or plaque shall measure not more than 0.5m x 0.35m.
An advocate shall not advertise on radio, television or in the form of an illuminated billboard or placard.[22]
An advocate who attends a conference, seminar or similar public activity may publish a paper, a circular, an article or a similar document but only by identifying that advocate by name and profession.[23]
In the instances where the rules allow an Advocate to advertise, such advertisement may only provide the following information –
(a) the identity of the advocate; (b) the identity of the advocate’s firm; (c) the date on which the advocate was admitted to the Roll of Advocates; (d) the address and other contact information of the advocate or the advocate’s firm; (e) the hours of business of the advocate or the advocate’s firm; (f) the language of business used by the advocate or the advocate’s firm; (g) the academic or professional qualifications of the advocate; or (h) any contribution that the advocate or the advocate’s firm may have made to the preparation of a published legal article or a legislative Bill, or any contribution made by the advocate or the advocate’s firm to legal education.[24]
The following information shall not be provided in any advertisement under the rules[25] –
(a) the name or the identity of a client of the advocate or the advocate’s firm; (b) a picture of the advocate, the advocate’s partner or partners, or another advocate employed in the advocate’s firm; (c) academic or professional positions held by the advocate before that advocate’s admission to the Roll of Advocates; or (d) a promise by the advocate or the advocate’s firm to achieve a particular outcome for clients or prospective clients of the advocate or the advocate’s firm or that failure to obtain that outcome shall constitute a waiver of the advocate’s or the advocate’s firm’s legal fees.
An Advocate or their firm commits Professional Misconduct and may be disciplined if they –
(a) fails to comply with the Advocates (Marketing and Advertising) Rules, 2014; (b) use an appearance at a conference, seminar or similar public activity for advertisement; (c) use an intermediary to solicit professional business; or (d) make false or misleading statements regarding information that should be provided under the Rules to solicit professional business.
The world has seen remarkable transformation with the advent of social media. Nowadays, many people rely on social media for information and services. This trend is not expected to slow down soon especially with the ever-increasing globalization. Concomitant to this phenomenal growth of social media is the fact that it has allowed people who sell goods and services to leverage on it to advertise and/or market to larger audiences. The legal profession has not been left behind in this regard. Increasingly, we have seen Lawyers take advantage of the social media to advertise and/or market their legal practice in many creative ways.
Time has come for the Marketing and Advertising Rules, 2014 to be updated to specifically regulate advertisement via social media, which many Lawyers have pursued with enthusiasm and verve albeit in ways that amount to inter alia unfairly applying for or unfairly seeking instructions for professional business or unfairly attracting professional business contrary to express provisions of the rules as drafted currently.[26]
Charging of fees
Payment of legal fees is regulated by the Advocates (Remuneration) Order, 1962 (“ARO). An Advocate is prevented from charging below what the ARO provides. If they do so, they’ll be guilty of undercutting which is an offence and could attract punishment under the law.[27]
An Advocate is also not expected to share profits from professional business with a person who is not an Advocate. Such person would also be guilty of an offence.[28]
An Advocate and a client can enter into a fee agreement at any point setting out the amount of the Advocate’s remuneration as long as the same is not below the threshold in the ARO.[29]
Such agreement may be set aside if found to be harsh, unconscionable, exorbitant or unreasonable by Court.[30]
The following fee agreements are invalid[31] –
(a) any purchase by an advocate of the interest, or any part of the interest, of his client in any suit or other contentious proceeding; or (b) any agreement relieving any advocate from responsibility for professional negligence or any other responsibility to which he would otherwise be subject as an advocate; or (c) any agreement by which an advocate retained or employed to prosecute or defend any suit or other contentious proceeding stipulates for payment only in the event of success in such suit or proceeding or that the advocate shall be remunerated at different rates according to the success or failure thereof; or (d) any agreement by which an advocate agrees to accept, in respect of professional business, any fee or other consideration which shall be less than the remuneration prescribed by the ARO in respect of that business or more than twenty-five per centum of the general damages recovered less the party and party costs as taxed or agreed; or (e) any disposition, contract, settlement, conveyance, delivery, dealing or transfer that is, under the Insolvency Act, 2015, void or ineffective against the Official Receiver or a bankruptcy trustee or an interim trustee in proceedings under that Act.
In the absence of a fee agreement, an Advocate secures his fees by taxing the Bill of Costs in accordance with provisions of the ARO.
“Clients are really no judge of a lawyer’s fee. The very best work a lawyer can do for his client is just the kind of work layman can never appreciate. Nothing is so disheartening as execute some brilliant piece of legal strategy for a client who calm tells you when the bill is rendered that the charge is outrage and that he expected the work done for a nominal fee.
Conclusion
The distinguished jurists following words to the young lawyer in the article by Champ S. Lewis leave us with some food for though. He said
But when you are as old as I, in a search for the real heroes the profession, you will not look for them on the Bench, nor necessarily in the successful practitioners, but in the lawyer, who while remaining a student devoted to the philosophy of the law, has been active and uncompromising in his fight against wrong and injustice, shunning law as a business and practicing it as a profession. There are such men, considered failures by the Bar, but they are true at heart to the professional ideal.
[1]https://www.jstor.org/stable/pdf/784941.pdf?refreqid=excelsior%3A725de72a61d68548d47a8f6f7f4d3e73&ab_segments=&origin=&acceptTC=1
[2] https://core.ac.uk/download/pdf/322560023.pdf
[3] Norman Bowie The law: from a Profession to a Business
[4] Lon Fuller, The morality of law 109 (revised edition 1969)
[5] Supra n. 3
[6]This is one of the central messages of Plato’s Republic. In that work Plato argues that it is never in a person’s interest to be unjust-not even a tyrant.
[7] Cap. 16 of the Laws of Kenya
[8] See part III of the Advocates Act
[9] No. 16 of 2021
[10] No. 42 of 2011
[11] See Rule 2 of the Advocates (Professional Indemnity) Regulations, 2004
[12] See Rule 3 of the Regulations
[13] Section 24(2) of the Advocates Act
[14] See Rule 3 of the Advocates (Accounts) Rules, 1966
[15] Cap. 488 of the Laws of Kenya
[16] See Rule 2 of the Advocates (Accounts) Rules, 1966
[17] See Rule 13 of the Advocates (Accounts) Rules, 1966
[18] See Rule 13(2)
[19] See Rule 14
[20] Advocates (Marketing and Advertising) Rules, 2014.
[21] See Rule 7
[22] See Rule 7(2)
[23] See Rule 8
[24] See Rule 5(1)
[25] See Rule 5(2)
[26] See Rule 2.
[27] Section 36 of the Advocates Act, Cap. 16 of the Laws of Kenya.
[28] Section 37 of the Advocates Act
[29] Section 45(1) of the Advocates Act
[30] Section 45(2) of the Advocates Act
[31] Section 46 of the Advocates Act