UPDATED: Touting & Lawyers — Is The Bar Council Making Things Up?

Malaysian lawyers are restricted enough already. An angry, big, bald, Indian man in San Francisco wonders why the Bar Council of Malaysia is giving wrong advice to lawyers, and creating new restrictions out of thin air?

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Lawyers in Malaysia are severely restricted in how they practise law. We can’t advertise, we can’t accept cases on a “no win no fee” basis (though changes to that for personal injury matters are underway) and we can’t pay someone to introduce clients to us.

That last practice is called touting. To pad up this post, and to show I did my research, the FreeOnline Dictionary defines touting as follows:-

tout

vb

1. (Business / Commerce) to solicit (business, customers, etc.) or hawk (merchandise), esp in a brazen way
2. (Individual Sports & Recreations / Horse Racing) (intr)

a. to spy on racehorses being trained in order to obtain information for betting purposes
b. to sell, or attempt to sell, such information or to take bets, esp in public places
3. (tr) Informal to recommend flatteringly or excessively
n

1. (Individual Sports & Recreations / Horse Racing)

a. a person who spies on racehorses so as to obtain betting information to sell
b. a person who sells information obtained by such spying
2. a person who solicits business in a brazen way
3. (Business / Commerce) Also called ticket tout a person who sells tickets unofficially for a heavily booked sporting event, concert, etc., at greatly inflated prices
4. Northern Ireland a police informer

[C14 (in the sense: to peer, look out): related to Old English... to peep out]
touter n

Collins English Dictionary — Complete and Unabridged © HarperCollins Publishers 1991, 1994, 1998, 2000, 2003

Now, the Bar Council in their latest very informative and useful and helpful and oh so wonderful email blast to members of the Bar entitled “General Information On Matters Discussed At The 3rd BC Meeting Held On 7 May 2011″ says this:

Members of the Bar are advised that acceptance of any form of payment (such as a commission) for introducing clients to a fellow Member of the Bar is tantamount to touting, which is a misconduct under the LPA. [Underlining supplied by me]

Rule 51 of the Legal Profession (Practice and Etiquette) Rules 1978 provides as follows:-

Rule 51. Advocate and Solicitor not to do or cause touting

An advocate and solicitor shall not do or cause or allow to be done, anything for the purpose of touting directly or indirectly, or which is calculated to suggest that it is done for that purpose.

Rule 52 goes on to provide this:-

Rule 52. No division of costs or profits with unqualified person

It is unprofessional and improper conduct-

    (a) for an advocate and solicitor to divide or agree to divide either costs received or the profits of his business with any unqualified person;

    (b) for an advocate and solicitor to pay, give, agree to pay or agree to give any commission, gratuity or valuable consideration to any unqualified person to procure or influence or for having procured or influenced any legal business and whether such payment, gift or agreement be made under pretext of services rendered or otherwise, but this rule does not prohibit the payment of ordinary bonuses to staff;

    (c) for an advocate and solicitor to accept or agree to accept less than the scale fees laid down by law in respect of non-contentious business carried out by him except for some special reason where no charge at all is made.

So, I understand this to mean that as a lawyer, I cannot actively solicit for clients either by myself or by employing a “runner” to go and find clients for me (rule 51) and cannot pay such a runner a percentage of my fee or any salary in order to get clients for me (rule 52).

But I am only prohibited from sharing my fees with an “unqualified person”. If you take a quick peek at the Legal Profession Act 1976, a “qualified person” is defined in section 3:

“qualified person” means any person who -

    (a) has passed the final examination leading to the degree of Bachelor of Laws of the University of Malaya, the University of Malaya in Singapore, the University of Singapore or the National University of Singapore;

    (b) is a barrister-at-law of England; or

    (c) is in possession of such other qualification as may by notification in the Gazette** be declared by the Board to be sufficient to make a person a qualified person for the purposes of this Act;

So an “un” qualified person must be someone who does not have any of the above “qualifications”. And therefore, Rule 52 says that I can’t share my fees with any of those persons. So now since the legislation only restricts this, why the heck is the Bar Council adding words to the law and creating even more restrictions for lawyers?

I can share my fees with another lawyer if I introduce that client to the lawyer or that lawyer introduced the client to me. I just can’t share my fees with an “unqualified person”.

UPDATE:

By Circular No 124/2011 dated 9 June 2011, the Malaysian Bar Council issued the following Clarification Regarding Item 5 of the “General Information on Matters Discussed at the 3rd BC Meeting Held on 7 May 2011″

We refer to item 5 of the “General Information on Matters Discussed at the 3rd BC Meeting Held on 7 May 2011” dated 31 May 2011.

We wish to address concerns over our advice that the acceptance of any form of payment (such as a commission) for introducing clients to a fellow Member of the Bar is tantamount to touting.

We are in agreement with the view that rule 52 of the Legal Profession (Practice and Etiquette) Rules 1978 (“Etiquette Rules”) only prohibits a Member of the Bar from sharing of fees with an unqualified person or the giving of commission to an unqualified person.  With all due respect, our statement relates to rule 51 of the Etiquette Rules, which clearly prohibits a Member from causing or allowing to be done, anything for the purpose of touting directly or indirectly.  The rule makes no distinction between a qualified and an unqualified person.

We further wish to draw your attention to sections 94(3)(f), (g) and (h) of the Legal Profession Act 1976 (“LPA”), which define “misconduct” to include the following:

(f)     the tendering or giving of any gratification to any person for having procured the employment in any legal business of himself or any other advocate and solicitor;
(g)     directly or indirectly procuring or attempting to procure the employment of himself or any other advocate and solicitor through or by the instruction of any person to whom any remuneration for obtaining such employment has been given by him or agreed or promised to  be so given;
(h)     accepting employment in any legal business through a tout;

Again, the above provisions make it clear that it is a misconduct to give any payment to secure legal business or to procure legal business by payment or promise of payment.  It also does not make any distinction between a qualified and an unqualified person.

We wish to clarify that Members are allowed to share fees or remuneration for working together in respect of any legal business.  However, our advice to Members is that obtaining payment merely for introducing clients is tantamount to touting, which may amount to misconduct as defined in the LPA and/or a breach of rule 51 of the Etiquette Rules.

Tony Woon Yeow Thong
Secretary
Malaysian Bar

Shanmuga K was sitting in the Honey Honey Cafe, San Francisco having his Eggs Benedict when a purple banana mysteriously emerged in his sub-conscious with a secret code message telling him that the Bar Council had Oops, done it again.

He is looking forward to the Law And Society Association Meeting starting on Thursday, June 2 which he is attending on behalf of the Malaysian Centre for Constitutionalism and Human Rights, also known as Pusat Rakyat LoyarBurok. Follow updates from the conference @PusatRakyatLB or @shanmuga_k with the hashtag #LSA11. But note – San Francisco is 15 hours behind Malaysian time!


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Posts by Shanmuga K

Shanmuga K sometimes sees a purple banana emerging in his sub-conscious. An article seems to then be magically written. He is @shanmuga_k on Twitter. When he does not see those purple bananas, he practices as a lawyer at www.kanesalingam.com

Posted on 1 June 2011. You can follow any responses to this entry through the RSS 2.0.

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6 Responses to UPDATED: Touting & Lawyers — Is The Bar Council Making Things Up?

  1. Thanks for posting this informative article. I haven’t any word to appreciate this post…..Really i am impressed from this post. The person who create this post it was a great human..thanks for shared this with us.

  2. I would like to thank you for the efforts you have made in writing this post. I am hoping the same best work from you in the future as well

  3. Michelle

    hello boss, article menarik. harap boss sihat walafiat di bandar pagar emas itu and janganlah jadi orang yang marah tetapi bahagia!

    thought it’d make you happy that you’re not in the office

  4. Andrew. Thanks for the info. My article does not touch on whether the practice is desirable or not, but rather whether it is currently legal in Malaysia. I think its still legal and the Bar has it wrong. But hey – who the heck am I!?

  5. Andrew Yong

    You are right that referral fees are distinct from touting. But referral fees to lawyers also give rise to professional concerns if the client is unaware of the fees or suffers reduced choice of counsel as a result. The English Bar currently forbids the payment of referral fees, and the English Law Society used to until 2004 but has called for the reimposition of the ban.

  6. Pepper Lim

    Good article!