Malaysian lawyers have voted against a free-market system to regulate legal fees, choosing to keep with current rules dictating how much they can charge for legal services. This is despite continuing client demand for discounted legal fees, and the fact that lawyers could face disciplinary action for discounting or undercutting the scale fees.
Malaysian lawyers are required to abide by the Solicitors Remuneration Order, which came into effect in 2006 to regulate the cost of non-contentious legal work. A proposal to abolish scale fees in preference for a free-market system was voted down at the Malaysian Bar Council’s annual general meeting last Saturday, with an overwhelming 121 votes against 10 for.
Lawyer Lee Swee Seng, who proposed the motion, said he was disappointed at the outcome but remains hopeful for change. “Lawyers by and large would like to tell the world that the SRO is being followed, while at the same time knowing that there is no way to enforce it,” he said. “They have the liberty and the luxury to give discounts while there is no fire [on them], and they want to have the best of both worlds.”
The motion argued that: the SRO was difficult to enforce because the pressure on firms to discount was too widespread; lawyers that don’t cut fees for clients are also likely to lose work to those that do; and clients will continue to demand discounts as they are not held accountable by the SRO. It suggested that instead, scale fees should be used only as a guideline, and that lawyers should not be accused of “unprofessional and improper conduct” by a disciplinary board for discounting by market demand.
According to a representative from the Malaysian Bar, the motion was voted down because lawyers feel that scale fees are necessary for sufficient compensation. Lee, however, said that the meeting was over-represented by litigation lawyers who aren’t affected by the SRO as much as others, such as conveyancing lawyers. “Conveyancing lawyers aren’t likely to attend these meetings,” he said.
Former bar council president Ambiga Sreenevasan said that there is no way to monitor lawyers that undercut scale fees. “It’s down to the individual lawyer and some of them are spoiling [the system] for others [by discounting], so we should have a whistle-blowing system to report on those that do,” she said. “There is a public interest element here – if lawyers are prepared to undercut we’re concerned that the quality of legal services will suffer.”
Discounting is not an issue exclusive to the Malaysian experience: Asian firms are widely known for their competitive fees. Lee said that it should be the market that dictates how much lawyers are paid, since overcharging isn’t as widespread. “I think in all fairness that it’s the public that needs protection from overcharging. If there is undercharging then I think it’s the public consumer that benefits,” he said.
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