The law has become ‘yesterday’s business’ in swathes of the EU as a combination of austerity and measures pushed through by the International Monetary Fund, European Commission (EC) and European Central Bank drive law firms to the brink of insolvency, the Gazette heard at the CCBE plenary session.
Ireland’s head of delegation, solicitor James MacGuill (pictured), told the Gazette that the country’s economy was in such crisis that conveyancing is ‘non-existent’, probate work scarce as ‘people die with negative equity’ and personal injury has been taken over by an administrative body.
He said: ‘The law is yesterday’s business in Ireland and the banks won’t fund a failed business model.’
The ‘Troika’ of the International Monetary Fund, EC and European Central Bank has been used by Ireland’s justice, equality and defence minister Alan Shatter ‘as a convenient platform for reforms he wanted anyway’. These reforms include plans to separate Irish law society representation from regulation, MacGuill said.
Portuguese delegation head José de Freitas said that austerity had led to the ‘littoralisation’ of his country, with as many as 60 courts in the interior closing down and only the coastal towns continuing to receive investment in justice.
The profession in Portugal also suffered from a ‘structural problem’, de Freitas said. ‘We have more than 27,000 lawyers for a population of 10 million people. Even when the economy was good, there was not enough work for so many practitioners – but now it is much worse, with no work and very low incomes.’
The Troika, de Freitas said, has taken advantage of the recession to impose measures that the EC has long wanted to impose, such as alternative business structures and multi-disciplinary practices. A new law allows law firms to be 49% owned by non- lawyers, he said. ‘We fear that profit will be put before ethics, and politics before professional principles.’
Greece told a similar story. Ioanna Kalantzakou-Tsatsaroni, head of the Greek delegation to the CCBE and vice-president of the Athens bar, said: ‘The Troika has interfered with the functioning of our bars, as well as in the fundamental role of solicitors and how they exercise their profession.’
She is concerned that new multidisciplinary business models could compromise professional privilege, while the Troika’s insistence that certain transactions need no longer be reserved for qualified practitioners would not be in the public interest.
Cyprus delegation member Laris Vrahimis said that half of all Cyprus’s lawyers were employed in the banking and financial sector.
He said: ‘Our banks had invested heavily in Greek bonds and suffered huge losses when the Greek economy seemed on the brink of collapse. Lawyers have been laid off, and for the first time young lawyers cannot find a firm to work for.’
The problem has been compounded, he said, by five new law schools in Cyprus’s universities that have begun adding new graduates to an already over-subscribed market.
There has been a ‘huge drop’ in the registration of new companies following the banking crisis and, Vrahimis said, ‘a palpable fear of what is still to come’.