Laywers in companies : towards a test run of a new status

February 4, 2021 11:12 am Published by TeamRH

France is heading towards a test run of which gives lawyers in companies a new status.

France is embarking on the path to recognise the status of a lawyer working within a company. The Minister of Justice, Eric Dupont-Moretti, is putting forward a draft law which notably includes a 5-year test run. The test run will be carried out across several Bars in France and will allow lawyers to be classed as employees of the company. But what is at stake?

Will a lawyer soon be able to exercise his legal profession within a company, under the status of an employee as is the case in many other countries, including Germany, the United Kingdom, the Netherlands, Italy, Spain or even the United States or Japan? With the release of the pre-project, supported by the Chancellor and the Minister of Justice, Eric Dupont-Moretti, this question is once again back on the agenda. This crucial debate has gained momentum but now to return to its benefits.

A reminder of the 2019 “Gauvain Report

The debate concerning the status of a lawyer within in a company has been a long-standing dispute. It was in fact, politician Raphaël Gauvain who relaunched the 20-year-old debate by giving Édouard Phillipe, the former prime minister, a report entitled “Restoring the sovereignty of France and Europe and protecting our companies from laws and procedures with extraterritorial scope”. That says it all, the stakes are high. It is about restoring the sovereignty of France.

France is indeed one of the last countries in the world not to protect the confidentiality of legal advice and consultations of companies. In light of this, politician Raphaël Gauvain stated that “in extraterritorial civil and criminal proceedings, French companies today find themselves in very vulnerable situations”

Evaluating the risk factor of confidential legal opinions

The benefit of implementing the status of a lawyer within a company is therefore to “protect the in-house legal advice of companies, which is (already) the case in most western countries”. In France, this legal privilege is not recognised. As a result of this, the advice and consultations of jurists within French companies are therefore not protected against procedures which have extraterritorial scope. This makes France one of the few (last?) countries to not guarantee this legal confidentiality.

In regard to the risk, it is only putting French companies in a situation of unfair competition compared to their competitors, especially those from Anglo-Saxon countries. It also makes France a prime target. Granting the status of a lawyer within companies will thus make it possible to restore balance and fairness amongst these relations. Of course, the lawyer would still be subject to ethical duties, which would ensure their independence and integrity. Among this, the confidentiality of legal opinions, meaning that these opinions would no longer be allowed to be discussed outside of the company.

This confidentiality must be global. It must also be legally enforceable against the investigative authorities, criminal or administrative: something that the regulated profession of jurists does not allow in business, with confidentiality being limited to civil proceedings. Hence the need to introduce the status of lawyer into companies.

In past years, there have been numerous criticisms and opinions have been divided. These differences were notable between the Paris Bar, who favoured the formation of such a status for lawyers, and the Bars of the Provinces, with some of them not understanding “how the independence of a lawyer can be compatible with the relationship of subordination due to the employment contract”.

In 2020, the Perben mission discussed this reform at length, whilst also highlighting the various obstacles to its implementation. In 2021, the campaign to grant lawyers a new status within companies is continuing on the right path since the Minister of Justice has recently proposed a test run, as a first step to demonstrate its success.

The proposal to experiment with “legal privilege”

Today, the idea is to trial the status of lawyers in a business setting for 5 years. As such, the lawyer would be an employee of the company, registered to the Bar on a special list and subject to ethical duties. They would be an ordinary worker of the company for which they work for. They would not be able to carry out any judicial duties, nor be entrusted with tasks provided by the courts or exercise their profession under any other form. Lastly, they would not be obligated to defend their company when the representation by a lawyer is compulsory.

The pre-project vows that “by carrying out responsibilities entrusted to them, the employed lawyer of the company enjoys the independence that their oath entails. They are bound by professional confidentiality, without this conflicting with the company who has employed them”. It also provides an opportunity for jurists of a company, who have worked for five years, to be granted the status of an employed lawyer, subject to an ethical review.

The test run would take place across specific Bars chosen by order of the Minister of Justice. Bars would be appointed by a proposal from their governing body. Among the Bars suggested this autumn are Hauts-de-Seine and Paris. Story to be continued.

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