Концепция регулирования деятельности по предоставлению юридической помощи и юридических услуг в Республике Казахстан (стр. 4 )

Section I.

1.1 It is necessary to introduce regulation of the activities of commercial lawyers (professional lawyers)

1.1.1 According to Article 13 of the Constitution of the Republic of Kazakhstan, one of the important duties of the state is to provide access to legal assistance. The lack of legally established concepts of "legal assistance" and "legal services" led to the uncertainty of legal regulation in this area. On the one hand, the activity of a large detachment of professional lawyers working in the field of providing legal services to business entities fell out of the sphere of state regulation. On the other hand, the activity of lawyers was qualified as legal aid, but in most cases it did not differ from the activity of professional lawyers in providing legal services. Uncertainty arose also in connection with the fact that lawyers were granted the right to work with legal entities, thus the concept of "legal assistance" turned out to be excessively broad, as it began to include legal services.

1.1.2 Unfortunately, unlike some other CIS countries (Ukraine, Uzbekistan, Belarus), in Kazakhstan, as in Russia, the activity of professional lawyers in the field of entrepreneurship (commercial lawyers) was not settled. As a result, a whole army of lawyers was able to carry out professional activities without any control by the state and society.

1.1.3 At first, after gaining independence, the state tried to introduce some regulation of the legal profession (so-called lawyers providing services not related to attorneys) through licensing, but licensing was only formal and it was canceled. Since then no regulation has been carried out. This has led to the fact that even those who have no legal education, those who have a criminal record, or foreign lawyers and non-lawyers who not only do not know Kazakh law, but cannot even read the rule of law without an interpreter, but at the same time these people influence multimillion dollar transactions.

1.1 Why is it impractical to introduce regulation of the activities of commercial lawyers by joining them in the bar?

1.1.1 In the past, it was already proposed to solve this problem by establishing a so-called monopoly of lawyers for representation in higher courts. Currently, the Republican Collegium of Advocates (RCA) already raises the issue even more, suggesting the monopoly of the RCA's lawyers for all types of legal assistance and services (see the Republican Bar Association's program on improving the quality of legal aid published on the RCA website).

1.1.2 While agreeing with the RCA that uncontrolled provision of legal assistance and services by any persons is unacceptable and requires regulation, one cannot agree that the issue will be the introduction of a monopoly of RCA5 lawyers for the provision of legal services. Below are the relevant arguments.

The idea of ​​admitting to the court only the lawyers of the RCA (that is, not allowing professional lawyers, of course, is in the interests of the RCA lawyers themselves, as they would have the opportunity to move from the field of so-called "legal assistance" prescribed by the Law on Advocacy to move without any efforts in the field of providing legal services and operate on this field without any competition, which should be an invariable attribute of entrepreneurial activity. As the provision of legal services is an undertaking, then this activity of the RCA's lawyers runs counter to the Law on Advocacy.

The RCA advocacy is a historically established institution. The RCA's lawyers underwent minimal changes with the acquisition of independence, but they proved inadequate for the effective functioning of the RCA's lawyers as representatives of the parties. The lawyers of the RCA legally implement "legal assistance", and therefore they are prohibited from engaging in business activities. The very structure of the RCA's legal profession, the peculiarities of taxation that do not allow to incur costs, and other features clearly show that the provision of legal services by them do not correspond to the spirit of their legal regulation. The law on advocacy contains a rule that lawyers have the right to provide legal services, but at the same time the same law also prohibits them from engaging in business activities. In view of the obvious contradiction in this issue, the law should clearly distinguish between the concepts of "legal aid" and "legal services". We consider it necessary to adopt the narrow concept of "legal assistance", that is, to determine that "legal assistance is the professional activity of lawyers in providing free legal assistance guaranteed by the state in accordance with the legislation of the Republic of Kazakhstan". All other activities of advocates and professional lawyers provide for reimbursement, that is, the subjects of such activities receive compensation. Thus, such activity is the provision of legal services, which is an entrepreneurial activity.

When deciding on the introduction of the monopoly of the legal profession of the RCA, one should not forget about the interests of consumers of their services. Especially evidently the importance of the representative figure in the court is visible in economic affairs, including investment disputes. There is a natural division of labor between the lawyers of the RCA and professional lawyers. From the point of view of investors and other economic entities, the provision that their interests in court can be represented only by the lawyers of the RCA would be a direct violation of their right to adequate judicial protection. At a time when there is a whole team of qualified world-class lawyers in the country who can represent investors at the highest level in court, the requirement to use only the lawyers of the RCA would be regarded by investors as a huge step towards the deterioration of the investment climate. The bulk of lawyers of the RCA cannot compete in the quality of their work in economic matters with lawyers with experience in large companies (corporate lawyers) and working in law firms.

The RCA's legal profession is structured so that every lawyer works almost alone. Due to strict advocacy secrecy, an RCA lawyer cannot share his experience with other lawyers. This means that the client cannot get a full consultation and service. While in a law firm, client secrets are stored collectively. The client gets access to collective experience of all the firm's lawyers accumulated in decades.

Mergers and acquisitions, financing of large investment projects, economic disputes and other cases dealt with by commercial lawyers, in most cases require the study of a large number of documents, facts, evidence and their analysis. The RCA lawyer alone without the teamwork that a law firm can provide, will simply not be able to cope with such a volume of work, especially in such a short time that is provided for the consideration of economic disputes by law.

One of the most important issues for a client is trust in their lawyers. This trust is based on the existing possibility of bringing a lawyer to justice. The most important difference between the work of an RCA attorney is that the contract for services is concluded by the lawyer individually, and, consequently, only the lawyer of the RCA bears responsibility for the contract to the client. While most commercial lawyers work through law firms that have much more opportunities to bear adequate responsibility for their obligations, and the largest of them have insurance for their responsibilities. Investors, especially foreign ones, prefer to hire law firms precisely because, unlike lawyers, firms can bear financial responsibility for the quality of their services. The size of insurance of international law firms, which covers their Kazakhstan offices, can reach hundreds of millions of US dollars. The lawyer of the RCA, even if it is possible to attract him to property liability, most likely will not be able to cover all losses of the client / principal, since he can only answer with his own property (apartment, car).

Another disadvantage of working through the RCA's attorneys for an entrepreneur client is that a lawyer as an individual cannot always provide uninterrupted service (he can go on vacation, get sick, or even die). The law firm is much more reliable in this respect.

A lawyer cannot be an expert on all matters, whereas a law firm, with many lawyers with a narrow specialization, can provide better services at a lower price. An important drawback of the legal regulation of the RCA's lawyers is that they cannot work for hire. This means that corporate lawyers and lawyers working in law firms who will not become lawyers, cannot be members of a professional organization of lawyers (bar association). As a result, a whole team of lawyers will not be covered by regulation.

Advocacy is a well-settled and established institution. For professional lawyers working in the field of entrepreneurship, it will be difficult to carry out their activities in the RCA.

Thus, it can be concluded that admission to the provision of services in all cases only to lawyers of the RCA it would have a serious negative impact on the country's economy and its investment attractiveness.

1.2.3 Since, as shown above, combining lawyers and professional lawyers into one organization through the accession of professional lawyers to the current legal profession is impossible and impractical, then a natural question arises about the need for substantial reform. Despite the fact that the Bar has now expressed its readiness for a certain reform, however, these proposals are only cosmetic in nature, and will not allow professional lawyers to work at the proper level within this structure. Proceeding from this, taking into account the current situation, in this Concept it is proposed to maintain the RCA in its current form with the changes proposed by it, while regulating the activity of professional lawyers by merging them into another organization. Both organizations will form part of a new organization that will act on the basis of the new law (more on this below).