Foreign legal consultants: Assets or liabilities?

By Stefanus Haryanto

BANDUNG (JP): As Indonesia grows to be one of Asia's major trading countries, the need for competent legal consultants is also increasing.

Since the 1980s, foreign lawyers have been coming to Indonesia to solicit their services, especially to provide legal opinions on aspects of international business.

Despite a government regulation that prohibits them from practicing law in Indonesia, foreign lawyers are able to bypass the red tape by using Indonesian lawyers as their "employers".

If necessary, foreign lawyers are willing to pay massive fees to Indonesian lawyers who work as their "dummies," so they can do business in Indonesia.

They are willing to pay these top-dollar sums because Indonesia's status as a booming "Asian Tiger" means the legal business in this country is very lucrative and the foreigners can earn millions of dollars.

As the legal world in Indonesia has become increasingly dominated by foreign legal consultants, many Indonesian lawyers are afraid that they will become "guests in their own country".

This feeling is legitimate since international business activity requires good legal skills and a high proficiency in English. Foreign legal consultants definitely meet this requirement. Therefore, it is understandable that Indonesian lawyers want some kind of protection from the government to prevent them from being preyed on by foreigners.

Indonesia is not the only country which is being forced to deal with an invasion of foreign legal consultants. In the United States, the Supreme Court, in the Griffiths case, held that U.S. citizenship was an unconstitutional prerequisite for admission to practice law in a state. As a result of this case, there are currently three methods by which a foreign national may practice law in the United States.

The first is to attend an accredited law school and pass the state bar exam as Ms. Griffiths did. Second, an individual may qualify to take the state bar exam by completing a Master of Comparative Law or Master of Laws degree, or by completing an equivalent number of hours of study at an accredited law school.

Third, people with prior education and practice in a country whose jurisprudence is based on English common law may take the bar exam without additional legal education.

In American Journal of International Law (1986), William R. Slomanson stated that allowing foreign legal consultants to practice in the U.S. expresses an attitude of international cooperation and opened the door to the expansion of local law firms into the international market place.

Access to foreign legal markets is secured by allowing foreign lawyers to practice in the U.S. The principle of reciprocity was adopted by France and Japan, and it seems that the principle is adopted by any country that allows the practice of foreign legal consultants in its territory.

In Japan, the enactment of Law Number 66 of 1987 made it possible for foreign lawyers to practice there.

In order to be licensed to practice law in Japan, a foreign lawyer must have practiced law in the foreign jurisdiction in which he or she was originally licensed for five years; be in good legal or professional standing in his or her home country; have sufficient financial resources to establish him/herself and be capable of self-indemnification; and be licensed in a jurisdiction that allows Japanese lawyers to practice as foreign legal consultants in that jurisdiction.

According to the law, foreign legal consultants are not permitted to represent clients in judicial proceedings, and they may not advise on Japanese law.

In Indonesia foreign legal consultants are regulated by the minister of justice decree number M.01.HT04.02 of 1991.

According to this regulation, foreign legal consultants are not permitted to practice law in Indonesia under their own names.

They may only work here as employees of Indonesian legal consultants provided they have obtained work permits from the Ministry of Labor.

Working permits are issued for one year, and can be extended for up to four years. Foreign legal consultants in Indonesia are obliged to obey existing laws and regulations, improve the quality of the legal services of the firms where they work, transfer their professional legal skills to Indonesian lawyers, and undertake public services for educational or governmental institutions.

Foreign legal consultants are only permitted to give their services on the law of their respective countries, the law of other foreign countries, and international law. Periodically, the Ministry of Justice may determine the special fields of the law that still require the services of foreign legal consultants.

The increase of businesspeople's awareness of the importance of having competent legal advice, makes the legal business a very lucrative one.

Unfortunately, it is difficult to hire a good Indonesian lawyer who is proficient enough in oral and written English.

Therefore, as long as Indonesian law schools cannot produce good enough lawyers with suitable English proficiency, the service of foreign legal consultants is still needed.

If those foreigners who currently work as employees in Indonesian law firms actually perform their obligations set forth by the regulation, inter alia to transfer their know-how to their Indonesian associates, their presence in Indonesia can be considered mutually beneficial.

However, if they manipulate the regulation just to reap big rewards, they are no more than a parasite in the Indonesian legal community.

If this is the case, the Indonesian government should take firm action to deal with those who care for nothing but money.

In addition, to strictly supervise foreign legal consultants practising in Indonesia, the government should initiate a comprehensive training program for young, bright Indonesian lawyers, to enable them to make a success of their own practices as qualified legal consultants.

If this program is successful, in due course Indonesia will have enough capable lawyers to do the work currently being done by foreigners. In this regard, the government should impose obligations on foreign legal consultants to assist this "national program".

In my opinion, government protection will not save Indonesian lawyers from being preyed on by foreign lawyers.

If they want to survive in the future, Indonesian lawyers should improve their legal skills and their ability to master English. In this regard, it is now up to the Indonesian lawyers to decide whether they want to be the hosts or just guests in their own country.

The writer is a lawyer and a lecturer of law at Parahyangan Catholic University.

Window: Therefore, as long as Indonesian law schools cannot produce good enough lawyers with suitable English proficiency, the service of foreign legal consultants is still needed.