How legal professions in Romania got hijacked

A healthy democracy is one where parties can defend their rights and one where all entities, governmental or private, can be represented in Justice.

Today, we present an ongoing Incorpo.ro investigation started in 2023, which revealed situations of negligence, corruption, and bad-faith acting from both U.N.B.R and O.C.J.R.

The situation is still developing, but we're seeing positive trends in the resolution of the issues.

Below, we explain the developments and how we're continuing to fight for a fairer legal system in Romania.

A Short History of Romanian Democracy

Romania is a country that faced a tumultuous path and had its laws and civil order changed significantly over the centuries.

In under 80 years, Romania went from a corrupt monarchy led by Carol II to being run by a communist regime, until the Romanian revolution in 1989 installed a democratic constitution and regime.

Since 1989, it is undoubtedly that Romania has made significant strides towards becoming a true democracy, but as things stand, it is still facing challenges.

As any young democracy, especially one that has been preceded by a regime promoting corruption and individualism at the peril of others, it has faced challenges, a fight for power between various interest groups, and overall, a rough yet fruitful period of growth.

There is no field where this is more visible than law, where we have noticed significant errors we're now trying to correct.

The private law professions

In this article, we're going to focus on the two (truly) private law professions, specifically advocates and and legal counsels (People with a law degree hired by a company to do legal work).

We're going to discuss how these professions have been hijacked by self-interest and greed, and how and why we need to do better.

Advocates

Advocates are the primary professionals responsible for representing both individuals and legal entities.

A quick history summary: A quick history summary:

1. Early Organization (1864 - 1931): The organization of the legal profession began with the 1864 law, establishing local disciplinary councils and a national body of advocates. Subsequent laws in 1907 and 1923 granted legal entities' status to these bodies and introduced the concept of the 'bar association', representing regional entities of advocates.
2. Shifts in the 20th Century: The 1931 law continued the evolution, maintaining the distinction between local and national structures. However, political changes in 1939 and 1940 led to the dissolution of elected bodies and the appointment of interim management, signalling a shift towards political influence in the legal profession.
3. Post-World War II Changes (1948 - 1990): The 1948 law marked a radical change, replacing bars with advocate colleges, a move driven by political motives. This structure was maintained until the 1954 decree, which reintroduced a central body for the profession. In 1990, following the revolution, significant reforms were made to re-establish traditional structures and names, reducing dependency on the Ministry of Justice.
4. Contemporary Era (1995 - Present): The pivotal Law 51/1995 laid the foundation for a modern, autonomous legal profession, defining the role of bars and the UNBR. Subsequent amendments, notably in 2004 and 2010, further refined the structure, culminating in the establishment of the National Union of Romanian Bars.

Facing the personal interest or the greater good?

While the changes in the law provided for the establishment of an institution to protect and enable advocates to self-manage, internal political maneuvering has made it more difficult for legitimate advocates to work and serve the public, and the overall health of the justice system has suffered as a result.

With the law recognizing that lawyers are people of special standing, being granted power for their importance in a healthy legal system, it should be obvious that lawyers, just as other protected professions, are also obligated to respect the power granted to them.

Unfortunately, this hasn't been the case. Internal struggles for personal gain, resentment towards others' success, and a sense of entitlement among professionals have caused the institution to veer away from its original purpose of regulating the industry: a safe, trustworthy profession of legal individuals meant to protect the law.

And so they voted, and in doing so showed the nature of today's bars:

• They set interdictions in practicing any price reductions, instead choosing to enforce artificial scarcity to force clients to pay more, for less, even when the market would rationally make it profitable to practice more accessible prices.
• They started a policy of blocking any form of internal work free-market, by setting an interdiction of offering more for employees of other law firms. In short, you're not allowed to offer an employee of another lawyer more.
• They denied publishing prices, for the scope of preventing disloyal competition, when instead, their behavior has been one markedly similar to a cartel.
• Companies such as Incorpo.ro have been interdicted to be represented by advocates, because of the risks of such platforms outcompeting advocates focusing on administrative tasks that anybody can do.

Fine, until it isn't

And while most professionals have avoided directly fighting against the politics of the profession, the damage done to it racks up.

Good faith advocates lose, and bad actors benefit from the lack of unity in adopting changes to curb such laws.

Professionals —and anybody for that matter— can set rules that govern their own work, life, and jobs. They can choose what to wear, how to speak, and how they should act.

However, this is limited by the rights of others. Just as a company can't enforce a bylaw tradition to third parties not involved in the adoption of the provisions, a lawyer association can't either.

... And while the law states that the right to a legal defense, be it for individual rights or someone's freedom, is a fundamental, inalienable right, lawyers have argued against it when it doesn't suit them.

Platforms like Incorpo.ro, although not acting in bad faith, have problems getting lawyers to do work that only lawyers can do - provide legal advice, and represent clients. The reason? Competition.

On this matter, and how we've managed to find a way to work legally, we discuss on our "Is it legal" page.

But in short, lawyers have implemented profession-wide bylaws that prohibit digitalizing Romania, and that have, in turn, led to a stop in any good-faith attempt to bring innovation into the legal profession.

And, while we believe there SHOULD BE REGULATION in the field of any profession that holds high esteem and importance for a healthy society, we don't believe it is a concern for unauthorized practice of law that led to the implementation of the statutory blocks.

To underscore that this is not the case, the unfortunate regulatory mess has led to entities like SOLO Fintech, with over 6,500 PFAs registered to do so using forged documentation, and a lawyer that the end person never knew.

And even on this matter, our investigation into SOLO's bad-faith practices, and how they used them to make over 100,000 EUR in MRR, is detailed here:

The facts show that UNBR, the Romanian Bar association, seems not to be controlled by good-faith actors but instead influenced by economically motivated entities that act for their own self-interest instead of the mutual good of the profession.

Sad examples of how UNBR is breaching lawyers' trust:

To underscore how bad this became, their treatment of the UNBR data breach, as well as their reaction to our disclosure, is shown here:

Instead of informing lawyers and taking action, they decided to deny the existence of the breach, which our team has proven to victims on an individual basis.

And in an attempt to punish our disclosure, and the fact that we made notified the victims on them being affected, they notified ANSPDCP, the Romanian data processor, for us mailing users in regards to the existence of the breach.

We have not received any notifications or citations from the ANSPDCP regarding any alleged breaches. We have acted in good faith, and it has shown.

But while the above case is more contentious, and we can't claim to have an objective view on the above, the UNBR statute shows more deep, and ingrained issues:

• Lawyers can be forced to labor for only one law firm. Offering a lawyer more than he's already paid is not allowed, and is punished.
  
  Don't try to outcompete with the 3.600 RON (~750 EUR) remuneration that lawyers would receive.
• Lawyers can't access publicity and can be punished for innovation.

Again, more on how the politics of UNBR affected lawyers they should instead represent, can be read in its separate article.

Legal Counsels

Legal counsels work as the lawyers of the state, and are the continuation on the profession of jurisconsults as well as state legal counsels.

While before the Romanian revolution of 1989, legal counsels were the sole actors defending the rights of the government, their power has thinned, with more of their attributes passed to the Lawyer "Advocate" profession.

After the Revolution, Decree 143 from 1955, which created the profession of the legal counsels, part of the "Legal offices" of state and commercial entities, was repealed.

Instead, Law 514 from 28 November 2003 came as an attempt to democratize the profession and expand on its rights.

Unfortunately, the poor writing and poorly thought-out code caused Legal Counsel to have problems with:

• Geting their work capacity recognized as well as having a body that can certify their competence and if they passed their apprenticeship status.
• Having their interests defended from an otherwise uncompetitive UNBR, just as stated in our previous chapter.

And once weakened, politically-interested parties have once again used their influence to transform a profession that serves the interests of the many into one that serves group interests.

How O.C.J.R was born

While OCJR presented itself as a good-faith entity attempting to protect legal counsels, unfortunately, facts show opposite results.

Registered as a federation of multiple law counsel associations in 2004, they attempted and managed to get their statute illegally published in the official monitor, and used this fact to induce the idea that they have the right to regulate legal counsels.

What this led to was a situation where Legal Counsels not part of this body became unable to practice law, even if the law stated otherwise, with Judges mistakenly admitting the legality of the act, most likely due to it being published in the official monitor.

Even during this month, there have been two instances where this was used in court, with outcomes that are detrimental to the integrity of the legal profession.

For years, nobody did nothing. It was too risky for legal counsels to fight against a body that could affect their right to work.

We were working with our legal counsel and analyzing the law to draft an article on the situation of legal professions when we noticed the errors.

• The law states that individuals have the right, but not the obligation, to constitute legal counsel associations.
• The statute WAS NOT LEGALLY PUBLISHED in the Official Monitor.
• With the Romanian Government often being represented by legal counsels, many of the almost 2,000 decisions citing or mentioning the statute led to millions if not billions of euros on behalf of the Romanian state—unable to defend its legitimate rights.

Our attempt to clarify

We noticed the issue and began drafting messages to all relevant government authorities, which were sent out between January 16 and 20, 2024.

• The Ministry of Justice - On what measures they took or are going to take
• The Official Monitor - On why they published the act
• The chamber of deputies (parliament) - On how the illegally published act can be removed, since the Official Monitor declined to provide a solution on the matter.
• The Superior Council of Magistrates - On what measures they are taking as a body to clear this up, and to ensure Magistrates are aware of the issues.

And below, is our emails and correspondence:

Responses to our appeals to official bodies:

And while they previously denied discussing the matter, they then realized the absurdity and gravity of the situation:

From the Ministry of Justice:

From the Official Monitor:

From the Superior Council of Magistrates:

And the results of our enquiries

We found out that just days later, the General Prosecutor of Romania took act of the situation, and notified the Romanian High Court Of Cassation and Justice, on the matter.

Some additional facts we found

A private entity tried to clear this up earlier, with an attempt to challenge the constitutionality of the statute.

However, the Romanian Constitutional Court denied the appeal—the internal statute of the O.C.J.R is not a form of law; it's a private act between privates:

So, the courts (through the CCR), already cleared up THIS IS NOT A LAW.

Conclusion and final notes

We appreciate that the General Prosecutor of Romania, Mr Alex-Florin FLORENȚA, took steps to clear the lack of clarity on the Legal Counsel situation.

Taking things further, we will take steps to notify governmental entities of the facts and ensure that judges act swiftly to rectify the situation and prevent any obstruction of justice.

As the situation progresses, we'll notify both government actors as well as the general public, with the hopes we can build a better and more democratic future.