Circular No 213/2021
Dated 4 June 2021
To Members of the Malaysian Bar
Legal Profession Committee’s Decisions and Recommendations
Made for the Term 2020/2021
As a general guidance to Members of the Bar, the key matters considered by the Legal Profession Committee (“LPC”) for the term 2020/2021 are summarised below.
(1) Enquiries Considered by LPC
(a) PayPal Account
Bar Council decided that law firms are not allowed to open PayPal accounts to accept payments from foreign clients abroad, as PayPal does not fall under the definition of “a financial institution”.
(b) Consultant as Signatory of Client Account
Consultants can be signatories of client accounts as they are employees of their law firm and fall under Rule 7A(c) of the Solicitors’ Account Rules 1990.
(c) Director of Company
A Member of the Bar is allowed to be appointed as a non-executive director of a company that is, in the opinion of the Bar Council not incompatible with the dignity of the legal profession, without needing to obtain approval from the Bar Council.
(d) Contract of / for Service
A master is not allowed to enter into any contract of / for service with his/her pupil. However, this does not prohibit a practitioner from entering into a contract that sets out the terms of the pupillage, whether in the form of rules or guidelines, so long as that contract cannot be construed as a contract of / for service.
(e) Vernacular Language Version of Firm Name
A law firm that intends to use the vernacular language version of its name is required to obtain the prior approval of the Bar Council. The request for the approval must be submitted with an official translation of the vernacular language version of the name. The vernacular language version must be identical to the law firm’s name that was approved by the Bar Council.
(f) Co-Working Space / Serviced Offices / Sharing of Premises
LPC continues to receive numerous queries relating to co-working spaces, serviced offices, and sharing of premises.
Bar Council has maintained its decision that Ruling 7.03 of the Rules and Rulings of the Bar Council, entitled “Sharing office or premises”, must be strictly adhered to. The premises must be partitioned off with separate and distinct entrances, with no connecting door between the two offices or premises. The law firm should not share a reception area with the other offices. Legal documents must be served to the firms to ensure that there is no breach of confidentiality. Meetings should not be conducted in the presence of other occupants of the co-working space or serviced office.
Members of the Bar are not required to obtain approval from the Bar Council for this purpose but are required to strictly comply with Ruling 7.03.
(2) Requirements by Local Councils for Various Licences
Bar Council wrote to YB Puan Hajah Zuraida binti Kamaruddin, Minister of Housing and Local Government on 17 Sept 2020 requesting a meeting to discuss various issues involving licencing requirements by local authorities. Bar Council then had a virtual meeting with the Local Government Department (“LGD”) on 27 Oct 2020.
The issues discussed at the meeting are summarised in the following sections.
(a) Licence for Premises and Signboard
Bar Council maintains its previous position, that law firms are regulated under the Legal Profession Act 1976 (“LPA”) and the Legal Profession (Publicity) Rules 2001, and that there is no requirement for law firms to pay their local councils for any licences for their premises and/or signboards in all the states in Peninsular Malaysia even though the judicial review was only filed against Dewan Bandaraya Kuala Lumpur (“DBKL”) for the consent judgment that was recorded for law firms in the Federal Territory of Kuala Lumpur.
Bar Council continued to receive complaints from Members from various states in Peninsular Malaysia that their local council authorities were asking their law firms to apply for licences for their premises and/or signboard.
Bar Council raised this issue at the meeting with LGD, and was informed that a decision was made at the Mesyuarat Majlis Negara bagi Kerajaan Tempatan (“MNKT”) in 1982 that law firms would not be asked to apply for licences for their premises. Bar Council was also informed that a circular was issued to all local council authorities in Peninsular Malaysia and the Federal Territory of Labuan as a reminder that law firms are exempt from the requirement to apply for such licences.
On the issue of signboard licences, Bar Council stated that law firms do not carry out trade or business activities, and that law firms are exempt from registering as businesses under section 4 of the Registration of Businesses Act 1956. As such, law firms should also be exempt from the requirement to apply for a signboard licence.
Circular No 146/2021 entitled “Update on Imposition by Local Authorities of Requirement of Licences for Premises and/or Signboards (30 Apr 2021)” dated 30 Apr 2021 was issued to inform Members regarding an update on this matter.
(b) Practising from Residence
Bar Council has also received complaints from Members that they were given notices from local council authorities that they are not allowed to practise from their residences.
There are two scenarious whereby a Member practises from his/her residence:
(i) The residence is the Member’s home, where he/she lives; or
(ii) The residential unit has been converted into an office and no one resides there.
Although Ruling 7.04 of the Rules and Rulings of the Bar Council allows Members to practise from their residence, Members are still required to follow the rules and regulations of their local council authorities.
At the meeting with LGD, Bar Council was informed that no businesses or activities are allowed to be carried out in residential units without the prior approval of the local authority.
Bar Council requested an exemption for Members who are practising from their homes. This is because the original usage of the building has not changed and the lawyers are only using their home addresses to register their law firms.
(c) Licence for Renovation of Law Firms
A new issue was brought to the Bar Council’s attention, where a law firm was asked to apply for a licence — which is renewable annually — for renovations to the interior of the firm.
While Bar Council understands that the licence is important to ensure that renovations are carried out according to the applicable rules and regulations and all safety measures are observed, Bar Council has raised its concern that the licence must be renewed annually.
Bar Council was informed that the concerns it raised on the various licencing requirements would be brought to the attention of the Cabinet and tabled for the MNKT’s consideration.
Bar Council will follow up closely on these licencing-related matters.
(3) Online Platforms: Possible Breach of Section 37 of LPA
In this section, the term “App” includes mobile device-based software applications, online portals, and websites.
(a) BurgieLaw Online Appointment Software App
As reported in the 2019/2020 term, BurgieLaw sells online legal templates. On its website, BurgieLaw has stated that the online legal templates were prepared by lawyers. LPC is looking into whether there is any breach of section 37 of the LPA.
(b) ShakeUp!
As reported in the 2019/2020 term, LPC has informed ShakeUp! to take immediate steps to cease providing do-it-yourself (“DIY”) online legal document services, as well as to seek independent legal advice on its website, including which of its services is in breach of section 37(3) of the LPA.
A Google search shows that ShakeUp!’s website is no longer active.
(c) Answers-in-Law
A consent judgment was recorded in June 2015, wherein Index Continent Sdn Bhd agreed to discontinue provision of the services that were in breach of section 37 of the LPA. It has come to LPC’s attention that Answers-in-Law is now operating with a modified module and has set up another company. LPC is in the midst of gathering information on this matter.
(d) Grace & Meet Enterprise (formerly known as Grace & Meet Chancery Sdn Bhd)
This is another online platform — known as GraceLegal — that has been an issue since last term, as it continued to provide unauthorised legal services despite having been issued a cease-and-desist letter from Bar Council. Bar Council has decided to commence legal action against Grace & Meet Enterprise.
(e) Joolah
Joolah is an online platform that sells a database of clients who require legal services, and has claimed that it obtained clearance from Bar Council. Based on a review of its website, it is clear that Joolah provides a service of matching clients and lawyers, and is therefore in breach of section 37 of the LPA. After an exchange of correspondences between Bar Council and Joolah, the latter requested a meeting, which will take place virtually soon.
(4) Bar Council Rulings
The following amendments to the Rules and Rulings of the Bar Council were made during the 2020/2021 term.
(a) Amendment to Ruling 2.06
Prior to being amended, Ruling 2.06 required law firms to submit their logos for approval, which was inconsistent with Ruling 3.05 that states a logo can be used so long as it is “unobtrusive and not incompatible with the dignity of the legal profession”.
Members were notified of the amendment of Ruling 2.06 through Circular No 244/2020 dated 30 July 2020.
(b) Amendments to Rulings 3.08, 4.03, 7.06 and 14.02
Amendments to Rulings 3.08, 4.03, 7.06 and 14.02 were made to provide the option for Members and law firms to use either a law firm’s facsimile number or email address as part of its contact information, instead of the old-fashioned provision where it was mandatory for the law firm’s facsimile number to be used.
Members were notified of the amendments to Rulings 3.08, 4.03, 7.06 and 14.02 through Circular No 326/2020 dated 2 Oct 2020.
(5) Additional Exceptions under Rule 8(4)(c) of the Solicitors’ Account Rules 1990
In an initiative to assist Members of the Bar with their work, Bar Council has allowed additional exceptions under Rule 8(4)(c) of the Solicitors’ Account Rules 1990.
Members were notified of these additional exceptions through Circular No 090/2020 dated 6 Apr 2020.
(6) Amendments to the Legal Profession (Publicity) Rules 2001
Amendments to the Legal Profession (Publicity) Rules 2001 (“Publicity Rules”) were submitted to the Attorney General’s Chambers (“AGC”) in January 2019. At a meeting on 9 Sept 2020, AGC requested clarification on a few of the proposed amendments. Subsequently, an amended draft of the Publicity Rules was submitted by email to AGC on 11 Nov 2020.
These decisions can also be found on pages 227 to 231 of the 2020/2021 Annual Report, which is available here.
Should you have any enquiries, please contact Malathi Mohan (03-2050 2150), Raz Ida Nadira Razali (03-2050 2090), Dhyana Sivabalan (03-2050 2094) or Md Faizal b Mahat (03-2050 2088), or send an email to lpc@malaysianbar.org.my.
Thank you.
Shahareen Begum
Secretary
Malaysian Bar
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