Are foreign lawyers a problem?

Are foreign lawyers a problem?

By Donna K. Woodward

MEDAN (JP): In the April 13 issue of The Jakarta Post,
attorney Kartini Muljadi presented clearly the rationale for the
position taken by Indonesian lawyers' groups on the employment of
foreign lawyers in Indonesia.

As Kartini and T. Mulya Lubis in his April 18 article
correctly pointed out, other countries have similar restrictions
on the employment of foreign attorneys within their borders. The
bar associations of the U.S. certainly maintain tight controls on
foreign lawyers.

Kartini refers to those who attempt to circumvent the
restrictions by working as "business consultants with an
Indonesian company operating under the foreign capital investment
law." This reference might have been prompted by the recent
detention of two American attorneys who were alleged to have
practiced law here without the proper work permits.

As someone who is licensed to practice law in the U.S. but who
is authorized to work in Indonesia in the field of management
consulting, may I address a gray area.

Many attorneys in the U.S. do not practice law as such, but
work as business consultants in a broad range of ventures. Thus
instead of practicing law in New York, where I am licensed to
practice, I might decide to work as a business consultant in
California, where I am not licensed to practice law.

Like Kartini or Mulya, I would be prohibited from giving
advice on California law or representing a client in court in
California, because in the eyes of the state of California I too
am a "foreign" lawyer. But I may legitimately work as a business
consultant in California even though I am not licensed to
practice law there.

The specific substantive expertise of lawyers lies in
understanding and interpreting law, researching the law, applying
laws -- and of course arguing the law. But lawyers are also
trained in fact-gathering, questioning, analysis and document
drafting skills that are of value to business.

These generic skills are not the exclusive property of
lawyers. Political scientists, economists, researchers and
business consultants all need to be adept at collecting,
evaluating and presenting data persuasively on behalf of clients.
But because the practical training of lawyers emphasizes these
skills, lawyers are often in demand as consultants.

Consultants, whether Indonesian or foreign, capitalize on
those factors in their academic and professional backgrounds
which enhance their appeal to clients. A consultant who is also
an attorney would be likely to refer to that legal training when
meeting clients because it supports a consultant's credibility.
A legitimate consultant will also make clear that he or she is
not authorized to practice law here.

The gray area: If foreigners have work permits authorizing
them to work here as consultants, but also happen to be
attorneys, when and how do the consultants cross the line into
the forbidden land of practicing law?

What activities constitute "the practice of law" in Indonesia?
Guidelines need to be more transparent and perhaps more defined,
if they are to protect the interests of Indonesian lawyers, of
the local clients who engage foreign consultants, and of those
foreign consultants who try to do the right thing. Kartini also
referred to practices which "violate the spirit and letter of the
prevailing rules".

Unfortunately, here it is sometimes easy to avoid compliance
with the spirit of the law, because officials themselves rely so
heavily on the letter of the law when enforcing compliance. The
tendency to interpret regulations and laws so legalistically
invites abuse, by dissembling foreigners and disingenuous
officials alike.

Law, like economics, is becoming transnational. As Mulya
pointed out, because of innovations in communication through the
use of electronic mail systems, "net" meetings and others, it
will soon be hard to say just "where" a lawyer is practicing law,
or to control the encroachment of foreign attorneys into a
country's legal or business environment.

If a California-licensed attorney is sitting in Singapore,
checking the latest relevant court decisions with his/her New
York or London office via the Internet, and formulating advice to
be e-mailed to a Jakarta-based client, where is the lawyer
"practicing" law?

As we say in New York, "An educated consumer is our best
customer." For anyone, Indonesian or otherwise, to seek advice on
local legal matters from a foreign attorney who is not educated
in local law, could be legal suicide. A strategy for Indonesian
lawyers against foreign interlopers might be to emphasize not
just your exclusive rights regarding the practice of law, but to
emphasize your exclusive expertise in Indonesian legal matters.

The problem is larger than that of foreign lawyers engaged in
the unauthorized practice of law. Show me a failing mega-project
in North Sumatra and I will show you ill-qualified expats who
were employed without work permits. Not only Indonesian lawyers,
but Indonesian English teachers, managers, and other
professionals are also disadvantaged: passed over in favor of
relatively cheap foreigners who work in Indonesia without the
proper credentials and permits.

These other professionals, though, do not have the visibility
and strong lobbying power of lawyers' groups. Self-styled foreign
"consultants," managers, English teachers (English teachers are
the most ubiquitous undocumented workers, at least in Medan)
often are employed quite openly without benefit of a work permit.

Doesn't this give an unfair business advantage to those who
avoid the US$1,200 per person/per year tax? While some employers
who have gone to great lengths and expense to obtain work permits
are victimized by greedy immigration officials because of
innocent mistakes in documents, other foreigners work openly for
years without obtaining the proper sponsorship and permits.

What could account for such selective enforcement of the
immigration law?

Some employers would like to comply with the law, but
eventually ignore Indonesia's visa and work-permit regulations
because the rules are so obscure, or because the bureaucracy is
so slow, or because some local officials and agents demand such
exorbitant unofficial fees, or because it is finally easier and
cheaper to pay off a lower-level immigration inspector than to go
through proper channels. Unofficial fees and payoffs are tired
old news. Are there any new solutions?

Mulya suggests a way to resolve the controversy over foreign
attorneys: a dialog. Can there be any dialog about abuse of work
permits by foreign attorneys without addressing the issue of
bureaucratic corruption?

And can Indonesian attorneys address the problem of corruption
without addressing the problem of the substandard salaries of
most civil servants?

Can the problem of public salaries be addressed without
looking at the tax structure? And can corporate taxation policy
be addressed without examining the system of corporate cronyism?
And can cronyism be addressed without returning to the
fundamental question of national reform?

Are foreign lawyers really the problem? Just as law -- a
constitution -- is at the foundation of a nations' existence,
local lawyers are central to national reform.

Let the various Indonesian lawyers associations initiate
dialog toward civil service reform and tax reform, business law
reform and government reform. As the loopholes for legal abuse
and the motives for exploiting legal loopholes disappear, the
problem of illegal foreign lawyers may all but disappear.

The writer, an attorney and former American diplomat, is
president director of PT Far Horizons.