As an entrepreneur, you are always looking for new opportunities. Where are the possibilities for successful investments? How does this work, for example, in the Netherlands?
In Europe, as an investor, you are not allowed to start a law firm. This is reserved for a lawyer. This means that only a lawyer can own a law firm. Investors are therefore not permitted to start a law firm. Conversely, a lawyer is not allowed to sell shares to an investor.
An Investor Cannot Start a Law Firm
Within the European Union, there is a rule that only a lawyer is allowed to start a law firm. The reason for this is that a lawyer, such as a personal injury lawyer in The Hague (Dutch: letselschade advocaat Den Haag), must remain independent. The idea is that if an investor were to start a law firm, this independence would be compromised. Thus, it is prohibited for an investor to start a law firm.
There is, therefore, a monopoly for lawyers when it comes to starting a law firm. The question is whether this is reasonable. Why would a lawyer’s independence be jeopardized if an entrepreneur wanted to start a law firm? After all, lawyers, such as a personal injury lawyer in Eindhoven (Dutch: letselschade advocaat Eindhoven), are under the supervision of the Bar Association. This organization is tasked with monitoring the rules that lawyers must adhere to. Some lawyers argue that it should not only be lawyers but also investors who should be allowed to invest in law firms.
Court Case at the European Court of Justice
A lawyer in Germany also believed that he should be allowed to sell part of his shares to an investor. This lawyer, therefore, sold a large portion of the shares of his German law firm to an investor, granting the investor significant control over the organization.
The German Bar Association became aware of the German lawyer’s actions and was unhappy with them. As a result, they revoked the lawyer’s license to practice law. The German lawyer was therefore no longer allowed to perform his duties, with all the consequences that entailed.
The German lawyer disagreed with the decision of the German Bar Association and initiated legal proceedings in a German court. His goal was to regain his license to practice law. During the legal proceedings, the German judge expressed uncertainty about how to handle the case. The judge did not know the answer to whether a lawyer was allowed to sell shares of a law firm to an investor. Consequently, the German court submitted a preliminary question to the European Court of Justice, asking whether the German lawyer was permitted to sell his law firm to the investor.
What Does the European Court of Justice Think?
The European Court of Justice has not yet mywikinews provided an answer to the question of whether the German lawyer is allowed to sell his law firm to an investor. The question is important not only for the German lawyer but also for you as an investor. After all, it could be profitable to buy a law firm.
It is expected that the European Court of Justice will answer the preliminary question in the fall of 2024. Then we will know whether investors are allowed to purchase law firms.
