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The Risk Of Revelation: Unclear Romanian Bar Regulations Put Law Firm Marketing Efforts On Hold

The Risk Of Revelation: Unclear Romanian Bar Regulations Put Law Firm Marketing Efforts On Hold

Romania
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Bar associations are responsible for the regulation of the legal profession as well as professional organizations dedicated to serving their members. In Romania, the Activity Report for 2013 of the Romanian National Union of Bar Associations (UNBR) states that the UNBR Congress’ mission is to “constantly support the development of the training level of lawyers, enhance relationships between the different Bar Associations in the country and, where needed, make decisions with regards to the deontological regulations of the profession.”

The UNBR also highlights on its website what it calls “several current and future preoccupations” with regards to the legal profession. Among other things, the UNBR stresses the fact that, in the 21st Century, the legal profession is strongly shaped by the economy: “The cultural identity of the lawyer is influenced to an increasing degree a socio-cultural path [it is unclear what path it’s referring to] and increasingly marked by the economic component of the profession, a situation which is leading to a considerable change in the content and equilibrium of the system of values at the core of the profession.” As a result of this analysis, the UNBR states: “…a re-evaluation of the institutional position of the lawyer is warranted, both relative to the judicial branch and relative to the business world and civil society.” 

It is perhaps this “economic environment” pressure on the “content of the system of values of the legal profession” that led the UNBR to modify its Statute of the Legal Profession in December 2013. One change in particular proved to be particularly difficult for law firms in the market to digest: the new provisions related to commercial communications by lawyers and law firms. Specifically, the manner in which law firms can and cannot advertise is now unclear, and nearly all PR/Marketing professionals at leading firms in the market have had to put their efforts on hold. 

What, if Anything Has Changed in the Market?

On December 14, 2013, the UNBR Council issued Decision No. 852. which, in Articles 243 and 265, contains several changes to the Statute of the Legal Profession regarding ways lawyers can inform the general public about the nature and quality of their work. A number of communications professionals in the industry complain that the wording of the inserted regulations is vague, and many have expressed reluctance to set up any new communication campaigns until these aspects are clarified. 

Gheorghe Florea, the President of UNBR, dismisses these complaints. “The reality is that nothing has changed. The Emergency Ordinance No. 49 of 2009 and Law No. 68 of 2010 clearly states that all economic agents will enjoy freedom in commercial communications with the note that, in regulated professions, they need to respect the professional norms set by the professional regulatory body. In this case, the main criteria that needed to be respected related to the independence and dignity of the profession and a respect towards professional secrecy. There is nothing that would ban advertising or commercial communications all together as long as these principles are respected.” 

And indeed, many of the existing restrictions on the legal professions with regards to commercial communications extend beyond the principles set forth in the legislation quoted by Florea. For example, the Statute of the Legal Profession in 2011 already specifies in Article 247 that a “general presentation brochure” is not allowed to identify names of clients. However, the original article contains an exception allowing firms to identify their clients when those clients have given permission. In the new Statute, Art 249-1 was inserted, which states simply that, “irrespective of the channel used it is forbidden ... to nominate clients in the portfolio or indicate litigations worked on.” The exception allowing firms to identify clients with their consent is no longer included (although Article 247 has not been amended, and thus remains in its original form). 

When asked for clarifications on this apparent contradiction, the UNBR President explained that: “Professional secrecy is an absolute value at the very foundation of the legal profession and we believe – and it is also a matter of law – that it is not to be compromised under any circumstance, even with regards to basic elements such as identifying a client and even if the client should choose to waive it.” When asked why a client waiver would not suffice, he did identify one change in publicity regulations and stated that: “It removes any risk whatsoever of infringement of the rights and liberties of these clients. It also removes any remote temptation for those limited few, who in their overzealous communication strategies, might overlook carrying out the proper due diligence with respect to this. I am not saying all or most would not carry it out but I believe the rights of the client should be put first and not allow for any risk to compromise on those.” 

Uncertainty in the Market

One marketing expert at a firm in Bucharest who requested not to be named conceded that, while there are several changes in the regulations themselves, many of them have, “been around on paper for years, albeit not always enforced to their full extent.” What has changed considerably with the new Decision in December, aside from the tightening of rules here and there, is the increased ambiguity due to specific wording and increased threat of potential sanctions for lawyers and law firms. And advertising in the market is on hold until clarity is brought back. As one Marketing Manager described it: “We’re waiting. We definitely do not want to be the first caught off-side and be made an example of.” And apparent contradictions, such as the ones mentioned above, are not the only source of uncertainty. Additional ambiguity comes from vague wording. For example, Article 244 states that certain types of communications are allowed in “industry magazines and other publications,” but not allowed in those “addressed to the public at large.” Many professionals have expressed frustration at the lack of clarity on this subject as well. 

Questions also exist about the practicality of some of the new restrictions. For example, the Statute requires that communication carried out through a variety of channels such as brochures, websites, auto-signatures, e-mail, and logos need be pre-approved by authorities of the profession. As there are currently over 7,000 law firms registered with the Bucharest Bar alone, with many of these using a mix of the channels mentioned, and with these communications likely requiring updates several times a year, logistical logjams in obtaining the required pre-approval are almost unavoidable. 

The result of the ambiguity, uncertainty, and impracticality regarding the new rules has been extreme caution. Nestor Nestor Diculescu Kingston Petersen has taken specific pieces of news about recent deals down from its website, while Peli Filip’s website now features no news of any kind. The Cluj-based Bejenaru & Partners firm has taken down its entire website and replaced it with simple contact details and a note that it is being updated to adhere to the new regulations in the Statute of the Legal Profession.

When asked about the situation in the market, Florea is unmoved: “If any ambiguities exist our institution has every intention to facilitate open and good-will discussion in order to offer clarifications. For example, we issued a statement whereby we invite lawyers to submit queries to the Department for Studies, Judicial Research and International Cooperation at the National Institute for Training and Development of Lawyers (“INPPA”). These can be either requests for clarifications as well as input towards the development of a best-practice handbook with regards to commercial communication.”

In theory, the proposed solution sounds good – but it appears the leading firms in the market are unpersuaded. We were shown copies of two letters, each signed by 36 leading law firms in the market and officially sent to and received by the UNBR (one on February 24, 2014 and one on March 17, 2014), calling on the institution to engage in a “dialog towards improving the regulations related to public communication and to offer specific clarifications as to how these regulations are to be applied in practice.” The letters point to economic considerations, noting that more communication – not less – regarding the economic activity of lawyers and the benefits they bring clients is desirable to further develop the practice of law in Romania, including through the development of more ways that the legal profession can contribute to economic gain. 

The letters have yet to be answered. 

Informed Decisions and Competition

Florea points out that lawyers in the market had ample opportunities to object to the “modifications” before they were finalized. “One needs to first of all understand how the Romanian National Bar Union works. It operates under representative democratic principles by bringing together 42 Bar Association representatives (one for each county in Romania), which, in total represent 30,922 members. Initially, the UNBR issued a call for prudence in commercial communications urging lawyers across the country to adhere to the principles mentioned above. Later, a decision was issued which set circumstances under which these should be limited. In adherence to our by-laws and the operating procedures of our organization, we held a council of the 42 member Bar Associations in March, where, should there have been any issues with the recent modifications in the Statute of the Legal Profession, they could have been voiced – no objections where raised at all on this matter.”

According to the UNBR President, “the goal [of the changes] was fundamentally to make sure that we provide accurate and relevant information to the end consumer of legal services so that he or she may be able to make a truly informed decision.” By clearing the market of the white noise of firms announcing deals they worked on or lawyers naming former public offices they held (another aspect specifically forbidden), he hopes to achieve this goal. 

The European Commission Report on Competition in Professional Services in 2004 concluded, however, that: “Advertising restrictions may thus reduce competition by increasing the costs of gaining information about different products, making it more difficult for consumers to search for the quality and price that best meets their needs. It is also widely recognized that advertising, and in particular comparative advertising, can be a crucial competitive tool for new firms entering the market and for existing firms to launch new products.” Whether information about which clients prefer which firms and which lawyers have experience in government – information that appears to be forbidden to consumers by the UNBR – would assist in the production of an informed decision is the question that divides the UNBR and the leading law firms in the country. 

Surprisingly, Florea denies that the new rules preclude firms from providing information about clients and professional background to consumers – and insists that they are only barred from doing so for “purposes of publicity.” He explains: “Professional secrecy and access to information/informed decisions are not mutually exclusive if done right. Nothing prevents lawyers from presenting a track record of former deals – the regulated aspects are related to them reporting on them for publicity purposes. At the same time, the often-met practice of putting forward former public offices held as a calling card is definitely a vector for corruption. There is nothing preventing lawyers from having a profile/CV or reporting on their activities but hinting, for the purpose of publicity, that a formerly held public office warrants you to be a key expert in a field and very ‘well connected’ risks stemming a considerably high level of corruption.”

Perhaps the long-awaited best practice handbook that Florea mentions will be published soon and will provide clarity. Until then, uncertainty is likely to remain the order of the day, and firms are likely to remain hyper-cautious – and to keep information about the deals they’ve worked on, the clients they’ve assisted, and the qualifications of their lawyers off their websites. The impact on “informed decision making” on the side of clients is up for debate. 

Romanian Knowledge Partner

MPR Partners | Maravela, Popescu & Roman is an internationally recommended and repeatedly awarded Romanian law firm providing integrated legal, tax advisory and insolvency services in all areas of interest for businesses and public administration. 

MPR Partners | Maravela, Popescu & Roman covers all major Romanian regions as well as the Republic of Moldavia, either directly or through carefully selected and closely coordinated correspondent offices. In addition, the firm has the infrastructure required to coordinate advice in multiple countries through highly reputed international networks of specialists ensuring high end services. 

Firm’s clients (multinational corporations, sound Romanian companies, private investors, public authorities and State companies) recommend MPR Partners | Maravela, Popescu & Roman as “A reliable team providing a high standard of work.” (quote by Chambers and Partners), having consistently endorsed the outstanding quality of services provided, flexible approach, responsiveness as well as the friendly working climate. 

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