On October 17, 2014, the Association of Corporate Counsel, joined by its European Chapter, asked its members to sign a petition with the German Bundestag reaffirming the independence of in-house counsel in Germany. The petition was in response to an erroneous decision of the Federal Social Court, which denied in-house counsel the permission to participate in bar association pension schemes, due to their asserted lack of independence.
This challenge to the independence of the in-house bar was, unfortunately, not a new one. It is, however, contrary to how in-house counsel actually operate and the ethical rules that demand that lawyers represent the organization, not any particular employee or executive. Moreover, treating in-house counsel as second-class citizens in the bar undermines society’s interest in encouraging compliance with the law, as in-house counsel are best situated to ensure that outcome.
In this particular instance, the Federal Social Court also profoundly hindered the mobility of lawyers in Germany, ultimately harming the unity of the country’s legal profession. Both external and internal lawyers will now have to consider the pension impact of any career move within the legal profession. The natural flow of legal expertise into — and out of — corporate clients will significantly diminish, to the detriment of both clients and society at large.