EU pushes reform of global legal practice

Talks on the global liberalisation of legal services moved into top gear this week as the European Union issued its initial offer of commitments under the General Agreement on Trade in Services (GATS).

The EU - which speaks on behalf of all member states in World Trade Organisation (WTO) issues - is one of the last major powers to publish its offer, which will form the basis for horse trading over liberalisation across the services sector.

The EU is also making specific requests to dozens of countries about restrictions on legal services.

This Doha round of trade talks is due to finish in 2005.

Most WTO members have previously made limited commitments to opening up to foreign lawyers, but with legal services moving up the agenda, it is expected that this will change.

It could give City law firms opportunities in key target countries where they are currently either banned or limited in what they can do, such as India, Korea, Japan and China.

The EU offer is good news for non-European law firms.

The EU offer goes further than its existing position of allowing them to set up in any member state and advise on their own country law.

It is now also offering non-EU firms the prospect of advising on host country law through employing or going into partnership with local lawyers, something currently prohibited in some EU countries.

The changes will have no impact in England and Wales, which has a liberal regime for foreign lawyers.

However, employment of and partnership with local lawyers elsewhere - banned in many countries - is important to City firms.

The offer is hedged by opt-outs or conditions for various member states, including one that would prohibit foreign multi-disciplinary partnerships in the UK offering advice on local law for as long as such partnerships are banned here.

EU trade commissioner Pascal Lamy said: 'This offer is a substantial one.

It contains real improvements for foreign services providers in terms of access to the EU market.'

A Law Society spokeswoman said the offer represents 'a real step forward in opening up the legal services market in Europe' and will make it easier for English multi-national partnerships to offer a wider range of services across the EU.

But the main benefit is the fact that an offer of better access to Europe will be a useful bargaining chip in trying to open markets in other parts of the world, she said.

Barbara Ford, legal relations manager at City giant Clifford Chance, said the EU offer is 'very encouraging'.

Clifford Chance welcomed freer markets and she said 'the trend seems to be towards liberalisation'.

See Editorial, page 12

Neil Rose