Employment relationship lawyers and firms Royal Decree approved

22 November 2006

Javier Fernández-Samaniego

Affects those who receive compensation for their services as an employee within an organisation and the management of a firm, sole practitioners or in a partnership.

On 17 November 2006, the Council of Ministers approved the Royal Decree by which the employment relationships concerning lawyers who work in firms, sole practitioners or in a partnership, are regulated.

This Royal Decree originates in the first additional provision of the Law of 18 December 2005, which resolved a very controversial question: whether lawyers who are not partners in a firm should be classified as employees or not, recognising the existing special employment characteristics between lawyers and firms and allowing the government, within the period of twelve months (which is about to expire) to regulate this issue through a Royal Decree.

A balanced regulation

The Royal Decree that has been approved by the government refines a specific regulation concerning the aspects of the employment relationship between lawyers and firms that, given the current features of that relationship, are incompatible or difficult to reconcile with the regulation in the Statute of Workers.

This particular regulation, separate and distinct from the normal employment relationship, is justified by requirements that derive from the rules that govern the legal profession. Specifically, those based on the liberty and independence that the law recognises for lawyers in their profession which imply, in turn, a larger degree of autonomy, technical independence and flexibility in carrying out professional responsibilities.

The objective of the Royal Decree is not, therefore, to create a completely new regulation, but instead an adaptation of the regulation of the normal employment relationship in the Statute of Workers, differing from that relationship only when necessary.

Consultation for the regulation

Given the complexity of the material regulated, the text approved by the government has been extensively researched. Firstly, with the most representative labour unions and businesses (as is normal when trying to approve a new labour law), but in this case also with the General Council of the Spanish Legal Profession, which has an adequately accurate awareness of the opinions in its profession.

In its development, numerous contributions have been received, which have served to significantly improve the text in achieving a balance between the interests of the parties, as well as between the new realities of the profession’s conditions and the more traditional aspects.

Scope of application

A fundamental goal of the text is to make the scope of application of the special employment relationship clear, and, above all, specify who is not included. This includes:

  • A lawyer who is part of a partnership in a firm incorporated in accordance with legal ordinance;

  • Relationships arranged between lawyers and companies or entities, public or private, that are not law firms;

  • Professional activities that contracted lawyers carry out for a firm when state-appointed.

In addition, without evidence to the contrary, the following relationships will be excluded from the scope of the application of the employment relationship regulated by this Royal Decree:

  • Those established between lawyers that are limited to sharing places, facilities or other means or services of any nature, as long as they maintain independence from each other, and do not ascribe to a collective company that could eventually represent the rights and obligations inherent in the relationship established with clients;

  • Those established between firms and lawyers when the professional activity done for the firms is carried out with the lawyers’ own organisational criteria and the valuable consideration received for the concerned professional activity is linked to obtaining a result or to the fees that are generated for the firm by the lawyer. An exception to this assumption is the relationships in which the lawyer is guaranteed a minimal income for his professional activity;

  • The professional activities carried out by lawyers contracted by a firm, with the firm’s authorisation, for their own clients when they receive the fees charged for those professional activities directly from the client.

Lawyers who work in a firm in which the owner has a family relationship or lives with them will not be included in the scope of the application of the employment relationship regulated in this Royal Decree unless the condition of wage-earners is shown to be the same.

Specific Regulations

The Royal Decree, in addition to mentioning the scope of the application, specifically regulates:

  • The source of the regulation of the employment relationship, in particular to specify that the collective agreement to which this employment relationship applies, should coincide with its subjective scope;

  • The object and subject of the special employment relationship; in relation to the former, exclusively the lending of services, and regarding the latter, laying out the features that affect each one of the subjects in the employment relationship;

  • The basic rights and duties of lawyers;

  • The limitations that this employment relationship establishes in relation to the power of employers’ management;

  • The category, duration and form of the contract, as well as the test period and training period contracts.

The features as regards:

  • The labour organisation and system of professional activity, particularly that related to agreements of exclusivity, permanence and post-contract non-competition clauses;

  • Working hours, breaks, vacations, holidays and leaves of absence;

  • The rights derived from the work contract, in particular those regarding career development, professional and economic promotion, emoluments and collective rights;

  • The vicissitudes of the special employment relationship, in particular in the suspension or termination of the contract, and very concretely when it produces, for the employer, a “failure of confidence” between the lawyer and the owner of the firm or in relation to his clients;

  • The applicable disciplinary system.

Finally, the Royal Decree looks at resolutions to resolve situations created before it came into effect or those which could be presented in the future amongst others.