Tuesday, April 28, 2009

Of Lawyers, (il)Legal Fees & Liberalisation

Do read the below statement by Bar Council President on Government’s recent decision to allow foreign legal firm to practice in Malaysia.

In summary, the Bar Council is unhappy with government’s move to allow foreign legal firms to enter Malaysian Market.

Ragunath says “The Bar Council’s position is that a managed system of liberalisation, in which foreign law firms are required to enter into joint ventures with Malaysian law firms, represents the best of both worlds as the Malaysian Bar has, amongst its members, sufficient practitioners with expertise in the area of Islamic Finance at an international level. Foreign law firms are able to tap into the Malaysian law firm’s knowledge of domestic laws, regulations and business environment, while Malaysian law firms are able to access knowledge of new legal/financial products. This reflects a “win-win” situation that would augur well for an orderly liberalisation of the domestic legal services market. The Bar Council has made known to the Government its preference for this method of liberalisation since November 2004, and has even prepared the relevant amendments and rules and regulations, and is therefore extremely disappointed that the views of BNM have prevailed”

Ragunath claims that Malaysian law firms have necessary expertise and want foreign firm to enter partnership with local firm. Why would any foreign firm want to do this as this would not give them a free hand to operate in Malaysia and what is the difference then as it is the same as the requirement to have 30% Bumiputra equity.

With the level of services that local law firms provide, who wants to partner them anyway!

Ragunath also claims that “Malaysian Bar has, amongst its members, sufficient practitioners with expertise in the area of Islamic Finance at an international level”. Then what is Bar Council afraid of then?

If foreign firm wants to tap into knowledge of domestic laws, regulations and business environment, they can just hire local lawyers with the right skills and expertise. They should be free and welcomed to do that and not forced into partnership with local firms. I think to Bar Council, liberalisation means open up a bit but they still wants control and monopoly.
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Actually my recent experience with one of the law firm prompted me to write this post and it was even more relevant when reading the statement by the newly minted Bar Council President.

I purchased an apartment way back in 2002 and paid hefty legal fees in RM thousands for the services of the legal firm appointed as panel lawyers for the property. When asked why the fees are high considering the work involved is just standard preparation of documents without any need for legal advise, counsel or even heroic argument in court, the answer from the learned lawyer was ' the fees are fixed and in accordance with the value of property'.

When highlighted that this is unfair as the work involved (some standard clerical document preparation work) has nothing to do with the value of the property, the lawyer then said that the fees are approved by the Bar Council and cannot be changed. When asked if he can reduce the fees upon request, the esteemed lawyer gave a straight faced answer, we don't do discounts as it is not allowed, again by the Bar Council.

Recently I was surprised to receive 2 notices from the same lawyer. One is for “Perfection Of Transfer ‘ and another for “Perfection of Charge’ which is basically for me to obtain release of Strata Title from the authorities. Being a gullible Malaysian, I was not aware of this requirement, the transfer of strata title. The lawyer who received thousands of Ringgit years ago failed to advise me on the impending transfer and not to mention, another huge legal fees.

As it was before I, was asked to pay few thousand Ringgits as legal fees, again for some standard piece of paper work.

The breakdown are as follows

Memorandum of Transfer RM 400
Service Tax RM 20
Strata Title Search RM 60
Application Fee & CTC Strata Title RM 100
CTC Blanket Consent RM 50
Adjudication FEE RM 10
Registration fee of MOT RM 120
Registration Fee – Consent RM 30
Transport Charges R M 120
Printing, Xerox, Telephone, Fax RM 75
MISC & Incidentals RM 50
Total RM 1035

Memorandum Of Charge RM 400
Consent to Charge RM 300
Master & Strata Title RM 60
Stamp Duty on MOC RM 40
Registration Fee MOC RM 120
Application Fee Consent to Charge RM 50
CTC Strata Title RM 50
Registration Consent to Charge RM 30
Purchase of Charge Doc RM 200
Transportation Charges RM 120
Printing, Xerox, Telephone, Fax RM 50
MISC & Incidentals RM 50
Total RM 1610

Grand Total RM 2645

When questioned on the charges, the clerk answered that the fees are determined based on the value of the property as approved by the BAR Council. If you notice, none of these documents involved any intervention from the lawyer except for maybe their signature. And the lawyer was nowhere to be seen.

How is this fair that fees for a simple piece of clerical work is charged based on the value of the property? What property value got to do with the simple administrative work?

They just use standard documents (they even charge us for the documents) and they do not for example, hold copyrights for authoring the documents. This is a simple piece of clerical work but the charges are anything but fair or reasonable.

Any technology involved? hmm.. just Microsoft word and mail merge function will do the job. What about Human Capital, a PMR/SRP qualified clerk can do the job.

They even charge RM 50, 00 for transportation when as the property/bank panel lawyer, they would have been using a messenger to do the same for more than one client. Just imagine if the lawyer acts for 500 owners in the same apartment project. He would made RM 25,000 for just adding RM 50.00 for transportation on top of his other (il)legal fees and another RM 25,000 for MISC and Incidental charges, which is never explained even if you insist.

By Charging, say RM 2000, this particular lawyer would have made at least a Million Ringgit for rendering these so called professional clerical services if he does the same work for 500 apartment owners in the same project since he is the panel lawyer.

This particular lawyer just sent us the notice by normal post and when we called them, they mentioned that the documents were not ready therefore, asked us to wait for their call. The call never came, and we had to make a total of 5 calls to chase them as we did not want to miss the deadline and end up paying penalty. We had to go their office to sign the documents and yet we are charged for telephone calls and transportation.

This is not the case of this particular lawyer only. The same happened with two other transactions with 2 different law firms. In terms of service, it always us, the clients, who chase the lawyers for follow ups when it should be the other way around. And they claim that they are professionals!

What a way to make money. If this is not daylight robbery, I don't know what is and how are they different from KL taxi drivers who overcharge. At least I know now that I chose the wrong profession.

Legal fees should take consideration of risk involved vs rewards eg how many of such S & P or property related transactions have ended up as dispute in court and how many lawyer were fined or even jailed etc due to errors etc.

And I was reliably informed that lawyers are not allowed to give discounts on fees. This is certainly to prevent competition and all lawyers can safely charge exorbitant fee approved by Bar Council.

Why is Bar Council afraid of competition? If you can’t even allow competition domestically, don’t talk about liberalization or competing at global stage.

When Bar Council espouses protectionism and disallows competition, stop talking about NEP, Quotas, level playing field, WTO and Free Trade!

When their fees and charges are anything but fair and just, don’t talk about justice, judiciary etc

When your own clients are not treated fairly, don’t preach about fairness.

When your services are anything but professional or world class, don’t complain when foreign firm are allowed to practice in Malaysia.

At the end of the statement, Ragunath says “The Government must address domestic market issues and ensure that such policies are also abolished if there is to be true liberalisation of the legal services market in Malaysia. There is no point making Malaysia welcoming to foreigners if we have not yet put our own house in order.

Can Bar council do exactly the same, solve this unjust overcharging, poor level of service and put your house in order or if not, just allow foreigners to come in. I certainly think that opening will the legal services market will only do good for long suffering Malaysians.

18 comments:

Murthi said...

At least you manage to talk to the lawyer. My property was transacted only with the clerks. When queried, I was told the lawyers are so busy that they are unable to attend to these matters and yet they charge thousands of ringgits.

HeroTamil said...

Remember when Tun Mahathir Quoted shakespeare's ??

‘The first thing we do, we hang the lawyers.’And Our Mr Karpal Sighn accuse TUN having phobia with lawyer??

Now we understand, what TUN meant ....:)

Hahahahahahahahahah...

Godisuno said...

totally in agreement!!!!
Yep to me lawyer in Malaysia has been greatly overpaid. I also believe that the lawyers are blood-sucking creators, robbers, hypocrite and unjust manipulator of the law. They rob the people by manipulating the law which in turn manipulated by their own species.

balan said...

I have read before of several lawyer asking for fees to be reduced and encourage competition but these met with Objection from Bar members.

So you can't really fault all lawyers and label them as greedy but I think majority are since there has been no change in their policies.

Patriot Selatan said...

good point and eloquently presented. the bar council should support govet move as it would benefit the individual lawyers in the end...

normala said...

Salam sejahtera.

kita rakyat malaysia mesti bersatu padu. Buat apa PAS pun kata nak bertanding. PKR pun nak bertanding.
Anwar perlu teliti kalau wakil mereka macam budak Fairuz itu lari dari tanggungjawab, siapa yang tanggungjawab? Kan rugi duit dan masa rakyat?
Fairus dengan angkuh sekarang kata dia tidak bersalah dan akan balik kat politik selepas balik dari melanjutkan pelajaran. Dan PKR setuju dan tepuk tangan!

Lepas itu, bila orang suruh SPR teliti cadangan kenakan penalti terhadap wakil rakyat yang berhenti tanpa sebab munasabah, geng Pakatan, seperti Lim Kit Siang dan Faris Musa (timblan AMK) kata Dato' Mukhriz (timbalan menteri MITI) dan Tan Keng Liang (ketua pemuda gerakan kedah) yang keluarkan cadangan penalti terhadap orang yang tidak bertanggungjawab sebagai kenyataan daripada orang "tidak berakal". Lihat kat:-

http://www.suarakeadilan.com/sk/berita-utama/2009/04/4408

http://blog.limkitsiang.com/2009/04/21/why-there-should-be-by-elections-in-the-three-state-assembly-seats-of-jelapang-behrang-and-changkat-jering-in-perak-and-the-parliamentary-seat-of-kulai/

Melayu Lama said...

What can you expect from a profession that breeds the most number of politicians....

MoneyMatters@Nizam said...

What the heck.. Daylight robbery for sure. They dont care as long they could suck your blood. They scream when the heard foreigner will be allowed to practice locally and giving affordable service to the PEOPLE. If I am not mistaken, most of them in BAR COUNCIL were promoting demolishing BUMI's right becoz Malaysia need to compete GLOBALLY. Why they cry now? Isnt GLOBAL they're looking for?

gs said...

lawyers everyone talks wat about the doctors. Whatever they charge nobody questions ! I think lwayer fees are fair and reasonable but compared to the Doctors , our toll and astro! Infact Justice is deadin Malaysia . Law remains in the Hands of judges when and how they interpret is Judgement.Our judiciary is controlled by the Govt so leave the Lawyers . I support Bar Council's stand. If you run a legal firm you will know .You must employ at least a Bumi at at least a basic of RM5000pm.The banks have cut down their legal panels to one or two Bumi firms only.Its hard guys its not as you think. The govt does things with an hidden agenda mostly to encourage the Bumis!!

balan said...

GS

I may write on doctors too.

But lawyers overcharging for simple piece of documentation and clerical work is ridiculous. What's more ridiculous is the service to their clients.

How is this fair, and yet they shout about fairness, justice etc.

Apocryphalist said...

I was at first fuming with anger which then turned to a sardonic smile when I received a letter from a legal company demanding that I pay a certain amount of money (principal, plus some lawyer's fees which turned out to be more than the principal amount) with regards to some bank loan that they alleged was defaulted as of April 2009, when indeed it was already paid in full in 2006.

The letter was properly worded with an admonishment and veiled threat that legal actions will be taken should I fail to comply within a certain number of days, and that (please don't laugh) the authorities will jail me if still no action is taken in my part.

Now realizing that it was a computer glitch (or plain ineffective bookkeeping), instead of complaining, I just went and danced to their tune. With an almost broken voice I called them up pleading for mercy. I demanded to talk to one of the lawyers but of course, they are CONSTANTLY too busy to talk to customers over the phone. A lowly secretary was dealing with me throughout.

So I told her to ask her superiors this:-
"Since according to the letter I will be hauled to the courts to be tried, will it cross any protocol, offend any legalities or break any rules if I were to come in dressed in my everyday dressing?"

"And what dressing would that be, sir?"

"Slippers and Sarong. I can't live without them. Can I, pretty please?"

"I will ask my bosses. Be right back, sir".

Now what happens next will show you either the level of IQ of the receptionists/secretaries hired by these lawyers, or the gross indifference of these lawyers, propelled only by the thoughts of money.

The secretary came back with the answer to my inquiries and she said,

"Yes, Sir. It is ok for you to wear Sarong and Slippers in Courts."

That was when I almost wept, thinking of the level these people have been reduced to.

Apocryphalist

Anonymous said...

Apocryphalist , you story made me laugh real hard kah kah kah ....
Balan your article is downright spot-on ... for a simple clerical work ... thousands of money flow in one direction ...with us getting any direct service the the said lawyer .
GS your comments about BUMI this BUMI that does not counter the points Balan is conveying ...
I'm a doctor but i can safely say all the fees charged commensurate with the service /consultation rendered ... no illicit transportation charge included haha

Anonymous said...

Correction " without us getting any direct service the the said lawyer "

gs said...

ANONYM

WE also know you charge thousands for terminal cases knowing you cant cure ,The Medical act is in your favour u can do whatever you want and kill a patient and escape negligience for anothe crooked doc wld come and support what blunder you did. so compared to you Lawyers are more human and I have lots of respect for them

Anonymous said...

GS ,
Is charging thousands for terminally ill patients wrong?
Charges for in-patient care are based on itemised service , go and analyse them if you care . Any dispute you can write and complain formally .Many doctors give consultation /service discounts or undercharge without telling the relatives as a courtesy ..i know because i do it almost everyday . The bills amount to thousands because of surgical supplies items , accomodation charges , imaging charges which are beyond our control as they are pre-determined by the hospitals. Who says we can cure terminally ill patients ? We, doctors , will tell the relatives and patients immediately the gravity of the illnesses at the earliest time possible of admission .... hey in most cases even the majority of the relatives know which cases are curable or not .... they need admission mainly to reduce the suffering from the symptoms .
Medical act in our favour ? Medical negligence/malpractise is based on objective standard of reasonable care ...so each dispute has to be investigated thoroughly to avoid either party being treated unfairly ...each case is unique . Of course gross malpractise must never be tolerated and there are a few bad apples in any profession . but rest assured no sane doctor will treat his/her patient in a mala fide way .
Do you recall of a study few yrs ago which profession has considered most trustworthy ...it's the doctors coming out top ..hmm

Anonymous said...

Overpaid?? Greatly overpaid??? wow...how i wish thats the case...anyway, study hard to be a lawyer yourself and u will know...not good enough to be a lawyer?? opps, thats too bad, then you will have no choice but to engage lawyers and pay for the fees...well, at the end of the day there is no one pointing at u with a gun and force you to engage one...if you think lawyers do not deserve the money, u can always choose to prepare those "simple piece of documentations" urself...if u choose to eat shit bcos u need it so much, then pls do not put the blame on the innocent shit that its too smelly and taste awful...my humble suggestion to the noble one, Mr Balan, please do not engage whatever service that you think is not worth for the price and after that trying to tarnish a profession's reputation..."Pls be fair and show some respect to lawyers and the whole legal professions"...a big NoNo for u?? then pls leave legal professions alone and keep ur stink money to urself

by innocent shit

balan said...

Innocent Shit,

Since you are incapable of comprehending my article, there's no point of arguing.

by the way, your name and your writing says it all, a reflection of you and your profession.

Anonymous said...

Wow i was a bit taken a back by the level of aggression in the responses to this article. As a practicing lawyer (not in coveyencing thank god) let me go through your bill:

Memorandum of Transfer RM 400
(ok this is legal fees and is set by the Solicitors Remuneration Order, a law enacted by parliament and not the Bar council. Discounts are prohibited and a lawyer could potentially be dis-barred for doing so. If you think it unfair, please take up with your MP rather than Bar Council)

Service Tax RM 20
(This is tax man, nothing to do with legal charges)

Strata Title Search RM 60
(Land search is compulsory for presentation of your MOT and is payable to Land Office and not pocketed by law firm)

Application Fee & CTC Strata Title RM 100
(Not sure what this is for but probably to do with State Authority COnsent which is a restriction on title document and again goes to Land Office rather than law firm)

CTC Blanket Consent RM 50
(not sure what this is either)

Adjudication FEE RM 10
(Stamp Duty needs to be adjudicated right. This goes to LHDN)

Registration fee of MOT RM 120
(This fee goes to the Land Office not pocketed by Law firm)

Registration Fee – Consent RM 30
(This related to state authority consent and is payable to Land Office)

Transport Charges R M 120
(This seems quite low actually as would include 1 trip to do search, 1 trip for adjudication, 1 trip to pick up notice of adjudication, 1 trip to pay stamp duty, 1 trip for presentation of MOT, 1 trip to collect title)

Printing, Xerox, Telephone, Fax RM 75
(Company Secretaries charge 40 sen per sheet of paper so this doesn't really look too outrageous)

MISC & Incidentals RM 50
(No clue what this related to but lets say the firm pockets it)

Total RM 1035