Irina Kalinina
Legal Stratagency, Berlin
ik@stratagency.com

The state of the regulatory environment for operating professional legal services in Russia is mainly shaped by the status quo of a ‘dualistic’ legal profession, which has remained basically unaltered since 2004-2010. This environment means that:

• There is a limited exclusive reserved domain of approximately 75,000 active bar members (advocates) for any legal representation in criminal proceedings (being those members of regional self-regulatory bars, with the Federal Chamber of Advocates as a national umbrella association, which self-regulates). There are also a limited number of notaries and patent attorneys with limited exclusive domains in legal representation.

• There is in fact no exclusive domain for any other type of legal services, including representation in court proceedings, for Russian lawyers/legal professionals with a law degree (no official statistics as to the number of these are available). Depending on how the number is counted and who is counted, the number varies from 100,000 to one million. These lawyers/legal professionals are not bar members, and therefore are not subject to any special professional admission standards, professional conduct rules or disciplinary procedures. Most of the non-regulated legal practitioners act as in-house counsel, with no special integrity duties towards the court, their clients or a professional corporation.

• In general, there is also de facto no limitation as to the legal or corporate structures, multidisciplinary professional partnerships, external capital or the like for non-regulated legal professionals.

Accordingly, no client (either domestic or foreign) is forced to engage an advocate/bar member for legal representation, except in criminal cases. Any person with а university degree (or equivalent) in law may represent a client in all other court proceedings but not in criminal courts (ie, general courts, commercial courts and administrative courts) and the Russian Constitutional Court (though there are some exceptions).

This ‘dualism’ in the field of professional legal services was challenged by reform initiatives led by the Federal Ministry of Justice. Since 2009, two editions of a ‘white paper’ (the so-called ‘Justice Programme’) have been presented to the public and have become the subject of very broad discussions among practising lawyers. The initiative is aimed at effectively including all lawyers in the existing self-regulatory bar structure.

However, a lack of a consensus among professionals as to the need to proceed with reforms, as well as rather turbulent political circumstances, have resulted in Russia retaining the status quo. There is no clear prospect for a revival of the reforms. A draft of the most recent amendment to current legislation (dated December 2021), presented by the Russian Ministry of Justice, does not significantly affect this status quo. Instead, if implemented, the amendments will rather shift some authorities in regards to access to the bar from the bars to the governmental domain.

Latest developments

Nevertheless, there have been some recent developments in the regulatory environment worth mentioning in this article. All of them can be attributed to increasing regulatory activity by the Federal Chamber of Advocates (rather de jure relevant to the regulated part of the national legal profession, but in practice affecting to some extent the business of law in general).

Success fee

An amendment to the applicable advocate regulations ultimately legalised a success fee as a legitimate form of the advocate’s fee, in effect since 2020. Although a success fee was never explicitly prohibited as such in Russia, this amendment aimed to provide somewhat more legal certainty in the matter. There had been uncertainty since an infamous ruling of the Constitutional Court in 2007 with regards to all lawyers’ fees (not only advocates’ fees), which had effectively given the courts discretion not to enforce success fees, as a result of their questionable compliance with the Constitution.

The legal certainty is still missing. There are several ongoing court disputes that have as their focal points the admissibility and the enforceability of the success fee arrangements, for both advocates and non-regulated lawyers.

Reputational risks and claims handling (disciplinary proceedings for advocates)

In 2021 (in line with some amendments from 2020), there was a significant modernisation of the disciplinary proceedings for advocates. In particular:

• the Federal Chamber of Advocates constituted a court of appeal for all disciplinary proceedings handled by the regional bars; and

• top regional bar officers were given the authority (which was not available earlier) to initiate disciplinary proceedings against advocates whose actions have had an overall negative effect on the reputation of the advocate profession in general.

Such regulatory changes have sought to raise the quality and efficiency of the disciplinary proceedings available to bar organisations. At the same time, they have drastically increased the number of public discussions and legal disputes that contest the very authority of bar officers, both at the regional and federal level, to interfere with advocates’ activities within and beyond professional life. In particular, in some situations advocates have publicly criticised or contested the bar officials and their decisions.