Kazakhstan: State Regulation versus Self-Regulation of Lawyers

By Thomas E. Johnson, lawyer in private practice with experience in Kazakhstan

There was an influx of foreign lawyers and law firms into Kazakhstan in the early to mid-1990s. There was a general consensus that local lawyers at that time were unprepared to deal with the issues posed by the expected large-scale inward foreign investment.

We established an informal group – no structure, no officers, no by-laws – and met occasionally, often for breakfast at the Rahat Palace Hotel. Most attendees came from the United Kingdom or the United States but participation was wide open and included any local lawyers who wished to attend. I usually brought along one of my firm’s local lawyers. This was a new experience for them, encouraging them to engage with ‘international’ lawyers, practice their English, and discover the benefits of networking. As for us foreign lawyers, we welcomed the chance to have some company, an opportunity to evaluate our competition, and the possibility of poaching quality local lawyers from other firms.

We occasionally invited guests speakers, one of whom was Minister of Justice N.A. Shaikenov. His speech was the most memorable of all the speakers we heard. He proposed that the state should regulate lawyers and law firms. Those of us from the West didn’t like what we were hearing and our local colleagues were also uneasy.

At the end of the speech the sentiment of the audience was clear – none of us wanted state regulation. Such regulation would be intrusive, a potential invasion of lawyer-client privilege, unnecessary, and yet another administrative burden in a country already with a heavy hand in private business. Moreover, the independence of lawyers is important to clients. It was revealing to us that Minister Shaikenov did not mention any actual bad behaviour by lawyers that would have been averted by regulation or that went unpunished.

I suppose that us foreign lawyers with minimal grasp of the Kazakh and Russian languages and not trained in local law feared being ousted from the country after uprooting ourselves from the West and after our firms had spent significant money on our offices. We saw ourselves as an important element in the transition of the country from a command economy to an open market economy. We trained local lawyers, mentored them, helped them to understand how to deal with clients, improved their English, and taught them how to work together as productive members of a team.

Minister Shaikenov noted our comments and we never heard another word from him or anyone else about state regulation of lawyers. Over the years there have been rumors of other proposals to regulate the legal profession but, until now, no bills were introduced in the legislature. I seem to recall that the rumors occurred whenever a new Minister of Justice was appointed. Perhaps it seemed like a natural thing for the Justice Ministry to expand its functions, open a new section of the Ministry, hire administrators, draft regulations and start introducing red tape, registration forms, examinations, and the like for lawyers.

The current bill is primarily directed at advocates. It is understandable that the dealings of courts with advocates should be subject to regulation of some kind though the advocates may have their own ideas and objections as to how far that should go.

It is a different matter when talking about commercial lawyers. What is the Ministry of Justice going to regulate? Is it going to regulate the fees we charge or involve itself in disputes with clients over the performance of work? Will it try to determine if a lawyer is competent? Or if he or she performed to a satisfactory standard?

My main experience as a lawyer has been in the United States and the United Kingdom, common law countries which do not regulate the legal profession except in a few instances. For example, lawyers (and others) who help clients prepare U.S. tax returns must register with the Internal Revenue Service and abide by their standards of conduct. The Securities and Exchange Commission goes further in prescribing regulations for lawyers dealing with it.

Western experience suggests that there are three essential elements to self-regulation by lawyers: a code of conduct which lawyers are bound to comply with; a civic membership association of lawyers who agree to abide by the code of conduct; and some mechanism for dealing with violations of the code of conduct, such as reprimand, a fine or ouster from the group.

The code of conduct would supplement criminal and civil law. Existing law is competent to deal with such things as a lawyer’s theft of money from a client – the client c-can bring a civil law suit to recover the money, and the state might bring a criminal prosecution regarding the theft. But the voluntary association of lawyers could also play a role to punish the lawyer.

If any action is required by the Ministry of Justice, it ought to be to foster the development of self-regulation of lawyers, not to take over that function.

Photo: MInister of Justice N.Shaikenov, at head of table, with lawyers representing foreign investors.

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