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Ada Pertanyaan? Hubungi Kami Nadia Maharani, Tri Y. Indriani
Photo by: RES
Obtaining affordable legal consultation in Indonesia usually has clients thinking twice before selecting a law firm, as legal fees can be very steep in comparison with average incomes. Protected under Article 4(d) of the Indonesian Lawyers Code of Ethics, the phrase, “When deciding the amount of a given honorarium, the lawyer must first consider the client’s financial capabilities,” means that there are no standardized fees in place here regarding legal consultation.
Indeed, there are many established law firms operating in Indonesia these days, and this means a lot of competition, as they bid to win clients. Such competition has resulted in the price war that is currently being waged between various firms.
This war was brought to light at a recent Tea Talk with Lawyers discussion, which was held by Capital Market Legal Consultants (“HKHPM”) on 14 August 2015. The dialogue revolved around the setting of standard fees for legal services and generated many different opinions among the various lawyers in attendance.
In support of setting standard rates for legal services was Mr. Firmansyah, a partner from the Karimsyah Law Firm. Due to the amount of newly established law firms willing to slash prices in order to attract clients, Mr. Firmansyah stated his belief that there was a pressing a need to establish a standardized set of fees for the legal services offered by growing law firms. According to Firmansyah, the limited market means that such a move would prevent the kind of price war that is currently underway.
“I mean, if the matter of rates is not dealt with and settled by our legal organizations, then we will end up continually bickering with each other. We will be pointing and laughing at each other, saying things like, ‘Is that how much you charged?’” Firmansyah ruminated.
Taking the opposing view, Indra Safitri, Chairman of Capital Market Legal Consultants (“HKHPM”), stated that he saw no need to set standardized legal fees, as lower fees could be offset against a reduction of costs in other areas. The Chairman instead emphasized the need to standardize the quality of service being offered.
In addition to stressing the importance of offering high-quality service, Mr. Safitri also referred to recent Financial Service Authority (“OJK”) efforts to take stock of the legal due diligence demonstrated by the country’s law firms, as well as the legal verdicts that resulted as a result of their representation. The ultimate goal of the OJK’s analysis, it is hoped, will eventually materialize in the shape of a set of formal Standard Operational Procedures for law firms.
“The HKHPM has a significant role to play in the standardization of performance and fees. Ultimately, whether a client chooses to be represented by Hadinoto Hadiputranto and Partners or Siahaan Irdamis Andarumi and Partners, they should be confident that all law firms work to an equally high standard,” suggested Mr. Safitri.
Also in support of the establishment of equal service standards was Fachri Asa’ari from Warens and Partners, a legal firm that has pledged not to become involved in the current price war. As a capital-market lawyer of 30-years experience, Mr. Asa’ari knows better than most that customer satisfaction cannot be bought by the promise of cheaper fees. Instead, Asa’ari believes that true customer satisfaction derives from a personalized approach, as well as from the quality of service provided by the lawyer in question.
Also expressing his belief in a standardized approach to quality of service, David Siahaan from Siahaan Indarmis Andarumi and Partners stated that he would opt to let the issue of fees be settled by the market. Mr. Siahaan explained that, in his experience, many long-established legal firms were able to reduce their fees owing to the huge amount of resources that they had at their disposal. This allowed these firms to settle their overheads without the need to raise their fees.
Opinion thus remains divided within the legal profession here as regards the need to put together a standardized set of fees. Mr. Siahaan is in agreement however that regulation limiting the services currently being offered by capital-market legal consultants would be a good idea.
For example, many capital-market firms offer advice and opinions to their clients regarding tax issues. Mr. Siahaan believes that such advice is beyond the professional capacities of capital-market lawyers, however, and that there is thus a clear need to set limits on the types of services that can be offered.
(sp)
Nadia Maharani, Tri Y. Indriani
Photo by: RES
Obtaining affordable legal consultation in Indonesia usually has clients thinking twice before selecting a law firm, as legal fees can be very steep in comparison with average incomes. Protected under Article 4(d) of the Indonesian Lawyers Code of Ethics, the phrase, “When deciding the amount of a given honorarium, the lawyer must first consider the client’s financial capabilities,” means that there are no standardized fees in place here regarding legal consultation.
Indeed, there are many established law firms operating in Indonesia these days, and this means a lot of competition, as they bid to win clients. Such competition has resulted in the price war that is currently being waged between various firms.
This war was brought to light at a recent Tea Talk with Lawyers discussion, which was held by Capital Market Legal Consultants (“HKHPM”) on 14 August 2015. The dialogue revolved around the setting of standard fees for legal services and generated many different opinions among the various lawyers in attendance.
In support of setting standard rates for legal services was Mr. Firmansyah, a partner from the Karimsyah Law Firm. Due to the amount of newly established law firms willing to slash prices in order to attract clients, Mr. Firmansyah stated his belief that there was a pressing a need to establish a standardized set of fees for the legal services offered by growing law firms. According to Firmansyah, the limited market means that such a move would prevent the kind of price war that is currently underway.
“I mean, if the matter of rates is not dealt with and settled by our legal organizations, then we will end up continually bickering with each other. We will be pointing and laughing at each other, saying things like, ‘Is that how much you charged?’” Firmansyah ruminated.
Taking the opposing view, Indra Safitri, Chairman of Capital Market Legal Consultants (“HKHPM”), stated that he saw no need to set standardized legal fees, as lower fees could be offset against a reduction of costs in other areas. The Chairman instead emphasized the need to standardize the quality of service being offered.
In addition to stressing the importance of offering high-quality service, Mr. Safitri also referred to recent Financial Service Authority (“OJK”) efforts to take stock of the legal due diligence demonstrated by the country’s law firms, as well as the legal verdicts that resulted as a result of their representation. The ultimate goal of the OJK’s analysis, it is hoped, will eventually materialize in the shape of a set of formal Standard Operational Procedures for law firms.
“The HKHPM has a significant role to play in the standardization of performance and fees. Ultimately, whether a client chooses to be represented by Hadinoto Hadiputranto and Partners or Siahaan Irdamis Andarumi and Partners, they should be confident that all law firms work to an equally high standard,” suggested Mr. Safitri.
Also in support of the establishment of equal service standards was Fachri Asa’ari from Warens and Partners, a legal firm that has pledged not to become involved in the current price war. As a capital-market lawyer of 30-years experience, Mr. Asa’ari knows better than most that customer satisfaction cannot be bought by the promise of cheaper fees. Instead, Asa’ari believes that true customer satisfaction derives from a personalized approach, as well as from the quality of service provided by the lawyer in question.
Also expressing his belief in a standardized approach to quality of service, David Siahaan from Siahaan Indarmis Andarumi and Partners stated that he would opt to let the issue of fees be settled by the market. Mr. Siahaan explained that, in his experience, many long-established legal firms were able to reduce their fees owing to the huge amount of resources that they had at their disposal. This allowed these firms to settle their overheads without the need to raise their fees.
Opinion thus remains divided within the legal profession here as regards the need to put together a standardized set of fees. Mr. Siahaan is in agreement however that regulation limiting the services currently being offered by capital-market legal consultants would be a good idea.
For example, many capital-market firms offer advice and opinions to their clients regarding tax issues. Mr. Siahaan believes that such advice is beyond the professional capacities of capital-market lawyers, however, and that there is thus a clear need to set limits on the types of services that can be offered.
(sp)