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Legal Services in Germany |
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 Attorneys in Germany are usually specialized in certain legal
fields, certain kinds of transactions, certain industries or a
combination thereof.
It will often prove worthwhile to invest some effort on
finding the right attorney to handle a particular matter.
1. Attorney Services
Unfortunately it is a common misconception that attorneys are mainly
involved in litigation. This leads to potential clients avoiding the
involvement of attorneys, to settle matters without litigation.
However, this often proves to be a self-fulfilling prophecy, since
attorneys are only involved once matters have gone sour. At that stage
litigation will actually be unavoidable.
In fact any competent attorney will advise his client in a way that
already minimizes the risk of future disputes at the time a contract is
entered. When drafting and negotiating a contract the attorney will
attempt to reduce the potential risks for his client as far as possible
and will advise him about the remaining risks. Should a dispute arise
later on, a skillful attorney will try to settle the matter out of
court whenever reasonable. In the long run, a client who settles a
dispute, especially in a business relation, will usually be satisfied.
The outcome of litigation, on the other hand, is in many cases hard to predict.
In advising businesses attorneys provide the same services as do
in-house legal departments, either in addition to an existing legal
department, which might want to retain special know-how and/or manpower
from outside counsel, or in lieu of the legal department, if the client
does not have an in-house counsel.
2. Specialists
To provide optimal services to their clients attorneys require more and
more specialization. Sometimes very specific formal requirements and
the ever-increasing volume of statutes, regulations and precedents,
which no general practitioner can adequately be aware of, play an
important role in the German legal system. Often only a specialist can
insure that no irreparable mistakes are made. This applies even more if
different legal systems are involved in a matter. This does not only
apply to special competence in a particular legal field or kind of
transaction but also to special linguistic, cultural or business
knowledge as well as the familiarity with certain industries and
markets.
Attorneys in Germany are usually specialized in certain legal fields,
certain kinds of transactions, certain industries or a combination
thereof. It will often prove worthwhile to invest some effort on
finding the right attorney to handle a particular matter.
3. Legal Services Monopoly and Mandatory Representation
Through the “Rechtsberatungsgesetz”, the Legal Services Statute, the
commercial provision of legal services in Germany is strictly limited
to German attorneys and, under certain circumstances, EU lawyers and
notaries. However, this does not limit anyone in using his own legal
expertise in a wide variety of areas, which at least larger companies
usually do by maintaining a legal department.
Legal representation by an attorney is generally mandatory in civil
court, unless the matter concerns small claims or labor disputes. That
means a party has to be represented by an attorney licensed to practice
in Germany, even if the party would be competent to represent itself.
For certain transactions and in dealing with certain registry matters
(for instance a purchase of shares of a liability company [GmbH] or of
real estate) the involvement of a notary is mandatory.
Depending on the federal state they are located in, notaries can only
act exclusively as such or can simultaneously be practicing as
attorneys.
4. Bar Associations and Professional Responsibility
The more than 110.000 licensed attorneys in Germany (approximately one
attorney for every 750 inhabitants) are mandatorily organized in local
bar associations which are joint in the federal bar association. The
local bar associations have the disciplinary oversight and attorneys
have to observe an extensive code of professional responsibility, whose
core provisions still originate from the Code of Professional
Responsibilities (Rechtsanwaltordnung) of 1879.
The professional responsibility regulations mainly serve to insure a
high professional standard of legal services and to preserve the moral
authority of the bar. Central provisions deal with legal malpractice
liability, mandatory malpractice insurance, the handling of client
funds, billing, confidentiality, limitation with regard to marketing
and the general obligation for continued legal education, even though
this does not include any specific continued legal education
requirements.
5. Fees
Traditionally the fees for legal services in Germany are charged in
accordance with the statutory Federal Fee Schedule. Under the Fee
Schedule fees are mainly determined based on the amount at issue in the
dispute, transaction or other matter. However, the degree of difficulty
and the amount of work involved in the matter are of minor importance
in determining the fees.
In many cases, but especially representing corporate clients, the
statutory fee system has proven to be impractical. Thus, fees in this
area are predominantly charged on an hourly basis. When entering a fee
agreement it has to be observed, that contingency fees are strictly
prohibited. Furthermore, in case of litigation fee agreements must not
lead to fees that are lower than the statutory fees. Notaries may not
enter into fee agreements. They have to charge their fees according to
the statutory Fee Schedule for Notaries. If exceptionally high amounts
are at issue, those fees are often considered excessive. Notarizations
involving large amounts are therefore often done in Switzerland.
All rights reserved. We do not take the responsibility for the
validity, topicality or completeness of the texts or other information.
 Dr. Hans Bergmann
BJL International Legal Services
www.bjl-legal.com
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