Lawyers fight Polish plan to cap their fees
Thursday, 23 August 2007
Michael Peel and Adam Easton
INTERNATIONAL lawyers have hit out at a Polish government fee-capping plan that, they say, would make their work uneconomic and encourage other countries to follow suit.
Leading English, Polish and US-based law firms are worried about the effects of a draft bill that would slash their maximum hourly rates to about euro 70 ($96, £47) as part of an official policy designed to improve people's access to legal services.
The stakes are high for the international lawyers. Poland is a base for their central and eastern European operations and is itself a key market -- especially with big building contracts likely to be signed in the run-up to the 2012 European football championship finals in Poland and Ukraine.
Peter Farren, a partner at London-based Linklaters, said the proposals would effectively offer a subsidy to large companies doing business in Poland, while potentially triggering an exodus of international law firms.
"It's not the place of an international law firm to meddle in Polish politics, but this bill has consequences that we believe are unintended," he said.
The proposed cap, calculated to represent 30 per cent of the Polish monthly minimum wage, could be introduced from early 2008. It is well below the euro 200 or so rates often charged by large Polish-based and international firms.
The plans are part of the policy of Jaroslaw Kaczynski, the Polish prime minister, to broaden social provision and give state help to people who feel they have lost out in the transformation to a market economy.
Resistance to the proposals is being led by Tomasz Wardynski of Wardynski & Partners, a Polish law firm, and the Law Society of England and Wales, where many international firms are based. Those with offices in Warsaw include White & Case of the US and Britain's Clifford Chance, Allen & Overy and Linklaters.
Leading opponents of the proposals recently discussed their concerns with Polish justice ministry officials. They question whether the plans comply with European Union trade rules. Lawyers also fear that, if Poland goes ahead, other new EU member states in the region could follow its lead.
Marcin Ragwan, a partner at Wardynski & Partners, said the proposals would punish the legal industry while ignoring the existing availability in small cities of legal services charged at rates below the planned cap.
"This regulation will not allow law firms to get the earnings needed to cover the costs of providing high-quality legal services," he said. "Instead of allowing the industry to modernise, it will take the profession back into the 19th century."
The Polish justice ministry declined to comment.
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— FT Syndication Service
INTERNATIONAL lawyers have hit out at a Polish government fee-capping plan that, they say, would make their work uneconomic and encourage other countries to follow suit.
Leading English, Polish and US-based law firms are worried about the effects of a draft bill that would slash their maximum hourly rates to about euro 70 ($96, £47) as part of an official policy designed to improve people's access to legal services.
The stakes are high for the international lawyers. Poland is a base for their central and eastern European operations and is itself a key market -- especially with big building contracts likely to be signed in the run-up to the 2012 European football championship finals in Poland and Ukraine.
Peter Farren, a partner at London-based Linklaters, said the proposals would effectively offer a subsidy to large companies doing business in Poland, while potentially triggering an exodus of international law firms.
"It's not the place of an international law firm to meddle in Polish politics, but this bill has consequences that we believe are unintended," he said.
The proposed cap, calculated to represent 30 per cent of the Polish monthly minimum wage, could be introduced from early 2008. It is well below the euro 200 or so rates often charged by large Polish-based and international firms.
The plans are part of the policy of Jaroslaw Kaczynski, the Polish prime minister, to broaden social provision and give state help to people who feel they have lost out in the transformation to a market economy.
Resistance to the proposals is being led by Tomasz Wardynski of Wardynski & Partners, a Polish law firm, and the Law Society of England and Wales, where many international firms are based. Those with offices in Warsaw include White & Case of the US and Britain's Clifford Chance, Allen & Overy and Linklaters.
Leading opponents of the proposals recently discussed their concerns with Polish justice ministry officials. They question whether the plans comply with European Union trade rules. Lawyers also fear that, if Poland goes ahead, other new EU member states in the region could follow its lead.
Marcin Ragwan, a partner at Wardynski & Partners, said the proposals would punish the legal industry while ignoring the existing availability in small cities of legal services charged at rates below the planned cap.
"This regulation will not allow law firms to get the earnings needed to cover the costs of providing high-quality legal services," he said. "Instead of allowing the industry to modernise, it will take the profession back into the 19th century."
The Polish justice ministry declined to comment.
..........................................
— FT Syndication Service