Solicitors could be subject to a Europe-wide code of conduct that may not permit fee-sharing with non-lawyers or payment of referral fees, under European Commission proposals released last week.

The draft EU Framework Services Directive proposes an extension of the current pan-European code of practice for cross-border legal work to cover domestic practice.

The code is likely to be written by the Council of the Bars and the Law Societies of the European Union (CCBE), which represents lawyers at the EU level, and was responsible for the cross-border code.

This code does not currently permit fee-sharing with non-lawyers or payment of referral fees - two issues that the Law Society Council has recently voted to allow in domestic work.

Jonathan Goldsmith, secretary general of the CCBE, said: 'The draft directive says that member states shall encourage national bars to adopt the common code.

The Law Society will be encouraged by the UK government to adopt it.

'The CCBE will be responsible for drawing up the code, and the current cross-border code will be our starting point.'

Notwithstanding the ongoing Clementi review into the regulation of legal services in the UK, both the legal profession and government are likely to be opposed to handing over control of setting rules for lawyers to the Brussels-based CCBE.

Law Society chief executive Janet Paraskeva said: 'We recognise the importance of harmonising codes of conduct, particularly for cross-border work, but it is important that this is does not impose unnecessary restrictions on the way in which English and Welsh lawyers can carry out business in this country.'

A Department for Constitutional Affairs spokeswoman said the government 'strongly supports the market-opening aims of the commission's proposals', but would not comment on the details at this stage.

Mr Goldsmith said the CCBE guidelines would stick to general principles, and that individual jurisdictions would probably then be able to supplement it with details relevant to their jurisdiction.

He said that whether or not fee-sharing with non-lawyers and payment of referral fees would feature in the code would depend on the views of member bars.

The plan will be debated in the European Parliament and Council of Ministers, and is unlikely to be in force before 2008.

By Rachel Rothwell