The Italian Competition Authority (ICA) has delivered its opinion to the Italian Government and Parliament aimed at integrating the annual draft law on competition for 2014. In particular, the ICA has pointed out the low level of competition in the legal services sector and indicated the following solutions to boost competition:
(i) Repealing the provision under which judicial and extrajudicial consulting on a continuative basis can be only carried out by lawyers enrolled into orders.
According to the ICA, such legal consultancy activities may be entrusted with other professionals such as is it in the tax and administrative law sector. In such respect, the ICA has stressed that clients should be free to choose other professionals and judge the level of services provided by them without legislative restraints.
(ii) Allowing lawyers to participate in more professional associations.
Italian lawyers can set up only one professional association where they must also be domiciled. The ICA has found that this limitation can be anti-competitive as multidisciplinary professional associations are usually considered a suitable vehicle to bring up the level of competition in professional services.
(iii) Having non-professional stockholders as partners of professional companies.
Lawyers cannot set up a limited liability company in order to provide their professional services as is it permitted for other categories of professionals. The ICA has held that such a rule would illogically discriminate between lawyers and other professionals and that it should therefore be repealed.
(iv) Permitting professional fees advertising.
The ICA has also focused its attention on the prohibition for lawyers to seek clients through publicising their professional fees. Furthermore, the Authority has found anti-competitive the provision under which comparative advertising between law firms is prohibited. The ICA has pointed out that there would be no reason for not permitting lawyers to advertise their own businesses and fees.
(v) Repealing “standard” professional fees
Law No. 247 of 2012 establishes that pre-determined fees must be applied unless a different agreement has been reached between lawyer and client. Such pre-determined fees are decided by the National Bar Council, which is the association representing all Italian lawyers. Therefore, the ICA has pointed out that these “standard” fees would sound vey like the “legal services tariffs” already repealed by the Italian Government.
(vi) Withdrawing the contingency fees ban
Although contingency fee cases are unknown in the vast majority of the Member States of the European Union, the ICA has considered them necessary in order to foster lawyers’ freedom to decide their own professional fees.
(vii) Amending the incompatibility system
Finally, the ICA has pointed out the very strict incompatibility regime for Italian lawyers. In particular, the ICA has suggested permitting lawyers to carry out other business activities now unreasonably impeded (e.g. part-time work).
In our view, the above opinion is very welcome and the measures are likely to improve the sometimes archaic market for legal services in Italy.