Friday, 17 October 2008

Law firms remain in the shadows

Among the 431 entries in the European Commission's lobby disclosure register today, there are only four law firms. That is remarkably few, considering that the Commission expects all law firms that are lobbying on behalf of clients to register and disclose both their lobbying turnover and their clients’ names.

The role of law firms in corporate lobbying is often underestimated. In the US, the top-5 biggest lobbying firms are all law firms. In Brussels, law firm lobbying is also a booming business, partially because of the expansion of US law firm giants and the arrival of new European 'lobbying law firms' like Alber & Geiger. Law firms provide strategic lobbying advice, draft legislative wording for their clients to present to decision-makers and engage in direct lobbying on their clients’ behalf. In providing such services, law firms are often competing directly with Brussels-based public affairs consultancies.

The European Public Affairs Directory includes no less than 110 “law firms specialising in EU matters”. Not all of these law firms offer lobby consultancy services to corporate clients, but many do and prominently so, as a look at the websites of the Brussels offices of DLA Piper, Mayer Brown and WilmerHale makes clear.

During the three years of debate that led to the launch of the Commission's voluntary register, law firms vigorously opposed lobby disclosure obligations. They claimed that such transparency would harm 'client privacy'. Will these law firms do what the Commission asks them and voluntarily disclose which clients they lobby for and details of their budgets? There is no reason for optimism.

In September, CEO and Friends of the Earth Europe wrote to three Brussels-based law firms asking them to list all the clients they were representing as lobbyists. The three law firms had all recently headhunted high-level European Commission officials involved in shaping EU anti-trust policies. The three law firms, however, all flatly rejected disclosing the information. This makes it impossible to judge if these revolving doors cases constitute a conflict of interest.

Clifford Chance, which headhunted Michel Petite, head of the Commission’s powerful Legal Service from 2001-2008, replied that they “owe a duty of confidentiality towards our clients, and data on our clientele cannot be disclosed”. Howrey, which earlier this year recruited Lars KjĂžlbye, the previous head of the energy and environment antitrust unit at the European Commission’s DG Competition, explained that “ work that we undertake for our clients is privileged and confidential and as such it is impossible to provide you with the information you have requested.” Hunton & Williams, the new employer of Robert Klotz from DG Competition’s energy and water unit, argued that “it is our Firm policy not to respond to such query as yours.”

The experience from the US strongly suggests that mandatory transparency rules are the only way to get law firms to get out of the shadows by disclosing who they lobby for.

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