Jakarta outposts accused of illegality by local firms

The Jakarta offices of five major US law firms have been accused by a group of prominent Indonesian lawyers of operating illegally in the city.

White & Case, Baker & McKenzie, Coudert Brothers, Morgan Lewis & Bockius and Deacons Graham & James have all been reported to the ministry of justice and the ministry of manpower by the lawyers, who claim they are not complying with local rules on foreign lawyers.

Adnan Buyong Nasution, a leading Jakarta lawyer who is acting as the spokesman for the group, said that “some expatriate lawyers are not operating under existing legal procedures”.

The law requires foreigners to associate with local law firms with the approval of the ministry of justice and the ministry of manpower.

But Nasution claimed that some firms circumvented this, by setting up business consultancies licensed by the department of trade or by flying in lawyers, usually from Singapore, who operate without an official base in the Indonesian capital.

He declined to identify any specific firms, but said that he was keen on entering into dialogue with the firms concerned: “We do not want to deport [any lawyers] or send them away. But they should correct themselves and practise together with Indonesian lawyers.”

It is not yet clear what attitude the government, which is under pressure from the International Monetary Fund to open up the economy, is taking.

However, the complaint coincides with the questioning of several foreign lawyers by police at the start of April.

Nasution said that the police action was not related to his group's complaint but arose from a separate action between a leading local firm, Makarim & Taira, and US lawyer Michael Hooton, over the circumstances surrounding his departure to join Morgan Lewis & Bockius.

The combination of an official complaint and police action suggests a hardening position by the Indonesians, as international law firms have piled into the country following clients involved in large-scale corporate transactions.

White & Case, Baker & McKenzie, Coudert Brothers and Morgan Lewis & Bockius were not available for comment at the time of going to press.

A spokesman for Deacons Graham & James in Jakarta would not comment, but stressed that none of its lawyers had been questioned by the police.

The situation could increase international pressure on Indonesia to relax its strict regime on foreign lawyers.

The New York-based American-Indonesian Chamber of Commerce has sent a letter of protest to the Indonesian government over the police questioning.

A separate agency, the American Chamber of Commerce in Jakarta, has been notified of the problem and is discussing what action needs to be taken.