ACC European Chapter advocates against proposal excluding in-house counsel from “legal auditor” status

ACC’s European Chapter recently advocated against a proposal from the Head of the Paris Bar to create a new cadre of lawyers who would be responsible for ensuring corporate compliance.  The problem is that the new status (in French, “commissariat au Droit”, translated “Legal Auditors”), would exclude in-house counsel by definition. In-house counsel currently lead the responsibilities that would fall to the new cadre of lawyers.

In France, in-house counsel are not permitted to be members of a bar.   Yet, the proposal would allow only members of the French bar to obtain the new status.  A French business newspaper, “Les Echos”, made the proposal public on August 29, 2012.

After having met with the Head of the Paris Bar on September 12, along with other in-house organizations, ACCE’s representatives sent a letter to the latter expressing their surprise and reservations on this proposal, on October 17 (see document attached).

Said status would be reserved to outside counsel admitted to the bar and their missions would consist in anticipating and evaluating the legal risks that a company may face. The tasks at stake seem to be clearly the ones usually handled by in house counsel. Although it is unclear whether these auditors would intervene only re small and medium companies, the signal sent is quite disturbing.

The response focuses on the fact that, in addition to being a potential threat for the in-house community in France, this proposal, if enacted, would be a French specificity and would lead to an additional bureaucratic layer that is unheard of in any advanced legal system. Finally, it could bring in more tensions between French in-house counsel and external counsel whereas the recent trends and discussions were aiming at reducing the gap between the two.  The so-called “Prada Report” of 2011 was advocating that French in-house counsel should be recognized as bar members with legal privilege attached to their work and that external counsel would still have the monopoly of representation before the courts.