You may or may not have heard of the Law for Growth, Activity and Equality of Economic Opportunity (Loi pour la croissance, l’activité et l’égalité des chance économiques). Adopted in August, 2015, this law is better known as the Macron Law (Loi Macron), named for the then Minister of the Economy (and now candidate for the Presidency) credited with its adoption. If you have heard of it, I’m willing to bet that you’ve not read it, given it’s 308 articles long. The law targets different sectors in which special rules were considered to restrict competition and economic growth. The sectors include public transportation and labor rules, as well as those relating to regulated professions.
This is the second in a series of eight posts relating to France and its move towards alternative structures. Links to the other seven in the series are provided below.
More specifically as regards regulated professions, Article 65 of the Macron Law authorizes the executive branch to adopt ordinances allowing for different regulated professions to join together to practice from the same company. The list of regulated professions concerned includes mostly the different legal professions: lawyers (avocats), as well as notaries (notaires) and bailiffs (huissiers de justice), to name a few (as explained in the first post relating to France, the country has several regulated legal professions). The list also includes one non-legal profession: certified accountants (experts comptables).
In March, 2016, the executive branch adopted such an ordinance.
Both Article 65 and the ordinance contain details about who may be a shareholder of and who may practice in such a company, and how it must be governed.
If you are interested in those details, you can find them here.
The ordinance calls such a company a “société pluri-professionelle d’exercice” (multi-professional company, or SPE).
The ordinance also provides that the Council of State (Conseil d’Etat) is to issue a decree establishing additional details about the operation of SPEs. It is expected that the decree will be published in April, 2017, and the entire package is to enter into effect no later than July 1, 2017.
Both the law and the ordinance anticipate that in allowing for SPEs, there will be two sticking points:
The first sticking point will be the fact that the rules governing the different professions, and namely their ethical rules, are not identical. As one example, bailiffs are subject to greater restrictions on advertising than the other professions. Can an SPE advertise in ways that are permitted under the rules of the other professions, but not under the rules for bailiffs?
The second sticking point will be the question of independence. The ordinance requires that an SPE’s bylaws establish a means to protect the independence of each kind of professional practicing with the company, and it is likely the future decree will also address this topic. What if an SPE composed mainly of accountants has just one bailiff? What do the bylaws need to provide in order to assure the necessary professional independence of the bailiff?
These are questions that are being debated now.
Not surprisingly, not everyone is in favor of allowing for SPEs. For example, the Conseil supérieur du notariat (CSN), which represents the notarial profession in France, has filed an objection before the Council of State. The President of the CSN argued that SPEs cannot be allowed because of “the risks for our clients with respect to independence, conflicts of interest and professional secrecy.”
Perhaps also not surprisingly, one response to that objection has been offered by a representative of Open Law (one of two organizations that were the driving force behind the Charter of Ethics for legaltech companies discussed in this post). That representative, Dan Kohn, stated that there is no obligation to create such an SPE, and that those who do are “free to prepare an ‘inter-professional charter of ethics’ to organize their cohabitation.”
In fact, with Dan Kohn’s leadership, Open Law has already gathered a group of persons representing the professions concerned in order to reflect upon the ethical and other issues raised by SPEs, and to propose draft bylaws and charters, as well as other documents and ideas, to address them.
It is highly unlikely that the objections raised by the CSN or others will operate to prevent the entry into effect of the new rules. The Macron Law reflects a strong will on the part of the French government to reduce what are seen as unnecessary barriers to competition and economic growth.
And when the new rules do enter into effect, France will be one step closer to the adoption of alternative structures.
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Links to the other seven posts in this series:
- There’s Something About France
- A Big Happy (French) Family
- A Little More Liberté
- France’s Haeri Report on the Future of the Legal Profession: Intro
- France’s Haeri Report and Alternative Structures (1 of 2): Je t’taime un peu
- France’s Haeri Report and Alternative Structures (2 of 2): Je t’aime, moi non plus
- France and Alternative Structures: Putting the Pieces Together
- Alternative Structures: Why is France Succeeding While the US Continues to Fail?
All eight posts, regrouped, can be viewed at this link: Regroup of posts on France