Discount on Legal Services for Noncontentious Matters in Peninsular Malaysia

Discount on Legal Services for Noncontentious Matters in

Peninsular Malaysia

Kevin Koo Seng KiatAdvocate & Solicitor, High Court of Malaya

kevinkoosk@gmail.com

Professor Dr Syed Omar Syed AgilTun Abdul Razak School of Government,

Universiti Tun Abdul Razaksyedomar@unirazak.edu.my

Scene: Lawyer's Office

Documents are signed....

Bill is Presented...

Client asks for discount

No Discount Rule

Conveyancing scale fees

Enforcement Committee

REHDA

Support from Professional Bodies

Members divided over the issue

Banks dictating legal fees

Enforcement problems

Conveyancing Work

Looks simple but isn't...

Creative Discounting

Debate continues...

One day... Discounts = Legal?

A Competitive Industry...

Meanwhile, in Singapore...

Epilogue

Questions

Q1

What economics theories can you use to describe the discounting behaviour in the legal industry?

You may draw on other fields as well to justify your answer.

Q2

What factors drive demand and supply of legal services for non-contentious matters?

Q3

REHDA stated that abolishing SRO scale fees will stimulate the real estate market.

How far is the statement true or untrue? Should lawyers care?

Q4

Why do you think law firms engage in discounting behaviour when there are rules prohibiting it?

Would law firms that discount be better off in the long term?

Q5

What would be the best outcome for the Bar Council to pursue for its members in the longterm and how can the Bar Council achieve it?

Q6

Imagine there are only two law firms in the market. Syarifah's firm resolves not to give discount to its clients. Ali's firm sometimes gives discount to its clients.

How does the “prisoner's dilemma” apply to this situation? How does the “prisoner's dilemma” apply to the legal industry in the long run?

Q7

As a potential client of a law firm, you are asked whether you would be willing to pay full scale fees for services rendered by the law firm.

Knowing that your friends can introduce other law firms that give discount, what would be the right thing to say and do?

Q8

Syarifah's friend, Amanda, buys an expensive house by the seaside and gets Syarifah's law firm to handle the transaction.

If Syarifah's law firm gives Amanda a 30% discount on legal fees, what kind of behaviour can Syarifah expect to see from Amanda in the future?

How can Syarifah refuse to give Amanda discount in the future?

Q9

What kind of short-term and long-term strategies should law firms adopt in this scenario?

How can the government play a role in helping law firms achieve their goals?

Q10

In 2006, various professional bodies supported the No-Discount Rule. Is the No-Discount Rule still relevant?

How can these professional bodies help the Bar Council's strategic goals today?

Q11

On 8th March 2012, the Borneo Post reported,

“Members of the Advocates Association of Sarawak Bars filed a lawsuit against a Malaysian

bank for imposing solicitor fees that are lower than the standardised scale prescribed under the

Schedule of Advocates. Plaintiff Khairil Azmi Mohd Hasbie, representing the association, was

suing as a member as well as president. The suit was filed against the bank as the only

defendant. The association received complaints from members that fees imposed by the bank

were not in accordance with the association’s charging system. ... the plaintiff is seeking

declaration from the court that the defendant’s standardised scales for solicitors — which

contravened the Advocates Remuneration Rules 1988 of Sarawak (as amended) made under the

Advocates’ Ordinance Chapt 110) of Sarawak — was ‘illegal, null and void’. They were also

seeking a declaration that it is ‘illegal’ to require or induce or aid or abet an advocate to give

discount for services rendered, or for future services in contravention of the Advocates

Remuneration Rule 1988 of Sarawak (amended), as well as the costs.”

Q11 (cont)

Imagine that you are engaged by the defendant bank to advise on the right thing to do.

What would you advise the bank to do?