How long will Kenya’s legal market be closed to foreigners?

The reported fight between Fragomen Kenya Limited, an entity which the Law Society of Kenya regards as a foreign law firm illegally practising in Kenya — an allegation denied — raises the underlying question of the future regulation of the market for legal services in the country.

Media sources indicate that Fragomen Kenya Limited, an international law firm operating in several countries, has now set up in Kenya.

The Law Society claims that the firm did not comply with Kenyan law when coming into the country, and has asked the Registrar-General to cancel its registration and the Director of Public Prosecutions to consider criminal charges.

Under Kenyan law, the practice of law is restricted to persons called “advocates”.

A person becomes an advocate after academic and practical qualifications, at the end of which the person signs a roll, kept at the High Court, as a record of all persons authorised to refer to themselves, and to practise, as advocates.

A non-advocate is termed an “unqualified person”. It is an offence for an unqualified person to practise as an advocate.

Also, the law regulates the form through which a person may practise as an advocate, and requires that the person can only practise in his or her natural name, or in the name of another advocate, for example as an employee or a partner.

This requirement eliminates the possibility of practising through an assumed name, or through an alternative legal form, such as a company.

Advocates, therefore, only practise in partnerships registered in their personal names, commonly called law firms, or as sole practitioners, but not through companies.

In other countries, it is possible for lawyers to practise in companies, or limited partnerships, allowing them to limit personal liability by sheltering under such companies or partnerships.

A law on limited partnerships was enacted in Kenya last year and, while not prohibiting advocates from forming limited partnerships, they are required to practise in their own names.

The law prohibits advocates from sharing their professional earnings with unqualified persons, thus preventing such persons from investing in law firms.

PRICE LIST

What constitutes “the practice of law,” which is work reserved for advocates, is determined by reference to a remuneration schedule contained in the Advocates Act, the primary law regulating the legal profession in Kenya.

The schedule is basically a price list, stipulating the minimum allowable charges for various legal services.

The services include litigation, the mainstay of Kenya’s legal profession, conveyancing of property, the formation of companies, probate and administration, and landlord and tenant work.

Any service listed in the schedule is automatically reserved for advocates. It is an offence for an unqualified person to offer such a service to another person.

The existing arrangements on the legal market date back to the 1950s with only minimal alterations over the years.

Important changes came in 1989, when the Advocates Act was amended to impose a requirement that only Kenyan nationals could seek to qualify as advocates, or practise law, in the country.

Previously, subject to qualifying, persons ordinarily resident in Kenya could practise as advocates. The amendment shut out foreign nationals then practising in Kenya, thus changing the internationalised nature that the profession had had until then.

In 2012, amendments were made allowing nationals of other East African countries to practise in Kenya in keeping with the integration arrangements.

Under Kenyan law, Fragomen Limited cannot currently practise, first, because a limited company is not an allowable form for practising law, and secondly, the services it seeks to provide are the subject of a monopoly the law grants advocates.

MONOPOLY

However, the fundamental issue which the Fragomen situation raises is the propriety of the continuing monopoly that advocates enjoy in the provision of legal services. These privileges are the same as those enjoyed by the solicitor’s profession in England 50 years ago.

In England, however, far-reaching reforms have since occurred, culminating in the enactment of the Legal Services Act, 2007, which shakes up the existing arrangements.

The Act liberalises the legal services market by permitting alternative business structures, (ABS), which allow non-lawyers to team up with lawyers in the provision of specified services in England and Wales.

It is, therefore, possible for non-lawyers, including corporations, to invest in law firms.

Two debates that are implied by the Fragomen issue and which need to occur in Kenya are, firstly, how long, in a globalising world, the Kenyan legal market will remain closed to outsiders.

Secondly, there needs to be a discussion around the monopolies that advocates enjoy in the provision of legal service.

While a number of such services can only be provided by advocates, others can be liberalised and can be made the subject of competition between the legal profession and other service providers.

According to the chair of the Law Society, Eric Mutua, these issues are currently under consideration by a committee led by Nzamba Kitonga, a senior member of the Kenyan profession.

The public that uses the services of lawyers, and which is interested in reduced legal costs, cannot wait for the Society to resolve this issue.

While the Society has embraced limited partnerships as a new model through which to practise law, this needs to be aligned with the primary law that regulates legal practice, and there needs to be public education on the implications of this model.

A major focus in the reforms in England is the protection of the interests of consumers of legal services, an issue which receives little public discussion Kenya, but which also clearly merits attention.

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