ESTABLISHMENT OF A LAW FIRM IN NIGERIA

 

It is necessary for a legal practitioner to establish a law firm in order to engage in private legal practice from his office. That is, a lawyer who goes to his client’s house will amount to a breach of the requirement of practitioners to operate from a firm.

Moreover, Rule 22 of the Rules of Professional Conduct (RPC) for Legal Practitioners, 2007 provides thus:

“a lawyer shall not call at client’s house or place of business for the purpose of giving advice to, or taking instruments from the client except in special circumstances or for some other urgent reason preventing his client from coming to his law office.”

What the above rule implies is that, practitioners should be consulted by clients in their law office (firm). Therefore, if a legal practitioner takes instruction from a client at the client’s house or at court premises, he is in breach of professional conduct.

Also, section 6(2) of Regulated and Other Professions (Private Practice Prohibition) Act, Cap. 390 LFN, 1990 provides that every legal practitioner can engage in private practice immediately after being called to the bar. Therefore, every legal practitioner wishing to establish a law firm is free to do so.

There are several reasons why legal practitioners establish law firms:

1)      Sheer necessity – This is due to the inability to secure paid employment which makes them opt for establishing a law firm in order to create employment for themselves.

2)      Self–esteem – Some legal practitioners establish law firms because it is perceived as prestigious to own a law firm. This is due to the fact that putting up their name on notice and printing their names on complementary cards or letterhead papers is their desire.

3)      Independence – Most legal practitioners establish law firms because of a desire to be their own boss rather than working under someone else.

4)      Profit – Some legal practitioners believe that the profit they will make by establishing their own law firm will exceed that earned when being employed.

There are however several qualities of a successful legal practitioner:

1)      Honesty and Integrity – These are the foundations of all the rules of professional conduct. Legal practitioners are expected to be honest people with integrity. The relationship between the client and the legal practitioner is one of agency in which the legal practitioner is the agent whilst the client is the principal. The legal practitioner is an officer of the law and has a primary duty to aid in the administration of justice. Therefore, honesty and integrity should be the watchwords of a legal practitioner running a law firm.

This can be found in Rules 15, 23(2), and 54 of RPC relates to honesty and integrity. Rule 15 of RPC enjoins the legal practitioner to perform his duty within the law and to obey his conscience and not that of his client – Adewunmi v, Plastex (Nig.) Ltd. (1986) 17 NSCC (Pt. 2) 852.

While Rule 23(2) enjoins legal practitioners to render proper accounts for all monies disbursed and collected on behalf of clients and should not under any circumstance mix his own money with that of his client in the same account. And, Rule 54 of RPC prohibits a legal practitioner from accepting compensation, commission, rebates or other advantages from others without the knowledge and consent of his client after full disclosure – Sagoe v. R. (1963) 1 All NLR 290, where the accused, a legal practitioner was given a power of attorney to collect a bequest of E10,000 (ten thousand ponds) which was left for Fourabay College, Sierra Leone in a Will. The accused cdollected the money in two installments of E7,000 (seven thousand pounds) and E3,000 (three thousand pounds) and failed to deliver it to the college. He kept the money in his account, spent part of it and failed to inform his client that he had collected the money. The accused was charged and convicted for stealing despite the fact that his claimed that he was keeping part of the money for his professional fees which was rejected. Though, in Onagoruwa v. The State (1993) 7 NWLR (Pt. 303) 49, where a legal practitioner was charged with stealing his client’s money fof sales of a plot of land entrusted to the legal practitioner. The Court of Appeal dismissed the lower court decision and held that the prosecution did not establish the ingredient of stealing, because there was insufficient evidence about the number of plots of land sold and the amount realized from the sale. Therefore, there was no evidence that the accused stole N720,000 (seven hundred and twenty thousand naira). Thus, there was no case for the accused to answer and the no case submission should have been upheld by the lower court. The appeal was therefore allowed. Also see Onagoruwa v. State (1993) 7 NWLR (Pt. 303) 49.

The above cases (though contrasting judgments) shows that any legal practitioner entrusted with client’s money must account for it properly or be liable to professional misconduct.

2)      Hard work, determination, and commitment – A legal practitioner who wants to establish a law firm needs to be hard working. Determined to see the firm succeed and be totally committed to its success. It requires hard work and discipline for a legal practitioner to be able to do his legal and non-legal elements which include interviewing clients, drafting documents, representing clients, etc.

REQUIREMENTS FOR THE ESTABLISHMENT OF A LAW FIRM

1)      Knowledge – This can be categorized into legal knowledge and non-legal knowledge. That is, knowledge of the law (legal knowledge), and knowledge of the industry or sector (non-legal knowledge) in which the firm is to render service. The practitioner must possess both to render effective service to clients.

Before establishing a law firm, a legal practitioner must ensure that he or she has adequate knowledge of substantive and procedural laws, particularly in the areas of intended practice. Clients consult legal practitioners because of their presumed knowledge of the law which they (the clients) believe that legal practitioners must use to solve their problems. But, a legal practitioner need not know all the law; what is required is knowledge of where to find the law. Nevertheless, the legal practitioner needs to know the fundamentals of the law, which will be the basis of further research. Non-legal knowledge can be acquired by reading books, magazines, periodicals, etc. on the industry or by attending industry events in order to have knowledge in guiding his clients on the proper legal action to take or remedy to follow.

2)      Skills – In addition to knowledge, a legal practitioner must possess skills which would aid him in carrying out legal work. The difference between knowledge and skill is that while the former is the body of law on a subject, the latter is the ability to apply legal knowledge to solve a legal problem. That is, legal knowledge is “know-what” whilst skill is “know-how’. A legal practitioner may be held liable in damages if his client suffers from his incompetence arising from his lack of adequate knowledge and skill. In Bello Raji v. X. (1946) 18 NLR 74, a legal practitioner was held liable in damages for bringing a statute barred action on behalf of his client and failing to advice his client. Thus, the plaintiff was awarded damages.

3)      Experience – The best way to acquire experience is by working for an experienced person for sometime, that is, working in another well established law firm or in the Ministry of Justice. However, in his book: Manual of Brief writing in the Court of Appeal and Supreme Court of Nigeria, 1986, Enugu at Page 2, Nnaemeka-Agu stated as follows:

“The university and Law School, no matter how good it may be, can at best be a firm foundation for the practice of law. It must be beefed-up, built up, reinforced and related to the facts of actual cases by years of actual post-call practice, reading and research.”

What this means is that every thing (no matter how little) is an experience and what makes it better and stronger is by working on it.

4)      Good luck – The success of a law firm is also determined by good luck which may provide an abundance of opportunities for the legal practitioner.

FINANCING A LAW FIRM

1)      Start-up capital – This is for provision of facilities needed by the firm such as premises, furniture, vehicle, office machinery and equipment. It should be noted that they may be bought or hired, but they must be provided before a law firm can operate.

2)      Working capital – This is for recurrent expenditure such as utilities bills, staff salaries and wages and cost of stationery. The cost of establishing a law firm will depend on the type of firm to be established, where the firm will be established, if it is a modern firm, etc.

CLIENTELE

It is prudent that a practitioner should have some clients already before establishing the firm. That is, there is a market for his services.

There are several ways of winning clients. Clients range from relatives, friends and acquaintances to banks, financial institutions, companies and statutory bodies, who may also recommend other clients to the firm pending on the kind of services rendered.

Clients may be acquired by applying to organizations like banks and companies for retainership. This is because legal practitioners are prohibited from appearing for their employer in the superior courts of record. Rule 8(1) of RPC provides that “a lawyer, whilst a servant or in a salaried employment of any kind, shall not appear as advocate in a court or judicial tribunal for his employer…” Because of this prohibition, many organisations retain private legal practitioners or law firms to represent them in superior courts of record – International Bank for West Africa Ltd. v. Imano & Anor. (1988) 3 NWLR (Pt. 85) 633.

 A firm may also apply for registration with the Legal Aid Council or apply for State briefs. Though this is hardly done due to the low income but few do it in order to keep them (the legal practitioner) busy.

CLASSIFICATION OF A LAW FIRM

There are five (5) ways of classifying law firms in Nigeria. They are:

1.      Location – Three types of laws firms can be identified under location – firms in large metropolitan cities, firms in state capitals, and firms in semi-urban or rural towns.

Firms in large metropolitan cities are those situated in locations like Lagos, Port Harcourt, and Kano. In which some of them may also be located in State capitals. While there are some firms located in the urban and rural towns in Nigeria.

2.      Client base – This has to do with the types of clients a legal practitioner chooses to serve. Under this criterion, a distinction can be drawn between firms that serve organizations (that is, corporate and governmental bodies); and private clients (that is, whether fee paying or legally aided). However, the benefits that a client seeks from a firm falls into three (3) categories – expertise, experience, and efficiency.

i)                    Expertise – This involves clients who require firms with expert knowledge and skill to handle what they consider as complex and unusual matters.

ii)                  Experience – This involves clients choosing one firm instead of another because such firms are experienced in an area of law due to the reputation of the firm.

iii)                Efficiency – This involves clients with matters that can be handled by several firms but require a prompt delivery of service at a competitive cost.

3.      Facilities - Under this criterion, a distinction may be drawn between a modern law firm (with technologically advanced and sophisticated equipments) and a traditional law firm (with only basic and simple equipments).

4.      Status of lawyers – This deals with classes of legal practitioners which are of two kinds – legal practitioners who have distinguished themselves and attained the highest rank in the profession (Senior Advocates of Nigeria), and all other legal practitioners. Thus, a firm may be classified as SAN or non-SAN firm.

5.      Number of lawyers – The number of legal practitioners in a law firm makes up the size of a law firm. It is the size of law firms in a particular location that determines the criteria (small, medium or large) to be used in a classification. Thus, a large firm in one location may be classified as a medium or small firm in another location and vice versa.

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