The legal landscape for law firms in Turkey operates under unique regulations that often surprise foreign clients who may be accustomed to seeing law firms structured as corporate entities.
In countries such as the United States and some European nations, law firms can adopt corporate forms, which makes fee collection more straightforward through corporate accounts.
However, Turkish legislation places strict limitations on the structure of legal practices, prohibiting law firms from functioning as corporate companies.
This restriction can seem unusual to foreign clients, particularly when they see that legal service fees are directed to an individual attorney’s account rather than to a corporate entity.
Here, we’ll explore why this is the case, and how Turkish regulations shape the nature of legal services in the country.
Regulatory Framework: The Code of Attorneyship in Turkey
The Turkish legal profession is governed primarily by the Attorneyship Code No. 1136, which mandates that law firms in Turkey cannot be established as corporate entities or companies.
Instead, Turkish attorneys are obligated to operate as individual practitioners or as partners in what is termed a law partnership, which is not the same as a corporate company.
This partnership model comes with its own set of limitations, largely because law is regarded as a profession that must operate under strict ethical guidelines, with personal accountability and integrity at its core.
According to the Attorneyship Code, Turkish lawyers are required to maintain their professional independence and avoid any commercial or corporate structure that could compromise this principle. Here’s a look at some of the key provisions in the Attorneyship Code that reinforce this requirement:
- Professional Independence and Integrity: Turkish attorneys are obligated to provide independent legal advice, free from external commercial influence. Forming a law firm as a corporate entity could compromise this independence, especially if corporate shareholders or stakeholders become involved, thereby influencing the decision-making process.
- Strict Ethical Standards: Turkish law places attorneys under a rigorous ethical framework that emphasizes personal responsibility. The Attorneyship Code mandates that lawyers must have full personal accountability for their professional conduct. This is a safeguard for clients, as it ensures that legal services are performed under a direct, personal commitment from the attorney, rather than as part of a corporate obligation.
- Ban on Corporate or Limited Liability Law Firms: Under Article 44 of the Attorneyship Code, Turkish lawyers cannot establish limited liability companies or joint-stock companies, which are common corporate structures in other industries. Law firms may only be organized as attorney partnerships, which are based solely on the personal liability and professional standing of the attorneys involved. This effectively prohibits law firms from becoming entities with separate legal personalities, as is typical in corporate business models.
Why Legal Service Payments Go to Personal Accounts
Because of these strict regulations, Turkish attorneys do not operate through corporate bank accounts. Instead, legal fees are typically paid to personal accounts designated by individual attorneys or their law partnerships.
For foreign clients, who are often used to paying legal fees to corporate accounts in other jurisdictions, this requirement can seem unusual or even concerning.
However, this practice is a legal necessity in Turkey, ensuring that payments are directly associated with the attorney’s personal responsibility for the services provided.
In addition, the Turkish Attorneyship Code does not permit attorneys to solicit or advertise their services in the same way a corporate entity might in other industries.
The law prohibits any actions that could be perceived as commercializing the profession, emphasizing that legal work is not a commercial service but rather a public duty provided within a strict ethical framework.
Comparison to Other Jurisdictions
In many countries, including the United States, the UK, and some EU countries, law firms can establish themselves as corporate entities. In these jurisdictions, law firms can incorporate, allowing them to manage finances, offer shareholder positions, and separate their business assets from personal liabilities. This model is designed to allow greater flexibility in scaling the business, diversifying ownership, and managing risk.
In contrast, the Turkish model emphasizes individual accountability. The Attorneyship Code specifies that lawyers must personally bear responsibility for their work, and by requiring payments to go directly to attorneys, the system reinforces this accountability.
This framework aims to protect clients by ensuring that their legal representation is provided by attorneys who are personally responsible for each aspect of their work, rather than by an impersonal corporate entity.
The Importance of Transparency with Foreign Clients
At Bayraktar Attorneys, we understand that these regulations may seem unconventional to clients from other countries. However, we believe transparency is essential in clarifying how Turkish legal regulations ensure the integrity of legal services in Turkey.
The requirement to operate as individual practitioners or partners in a law partnership and to receive fees in a personal account is intended to maintain professional accountability and uphold high ethical standards.
For our foreign clients, this system offers several advantages:
- Personalized Legal Service: Clients can trust that their legal services are provided directly by the attorney, whose personal accountability is legally mandated.
- High Ethical Standards: Since Turkish attorneys cannot operate through corporate entities, clients can rest assured that the legal representation they receive is free from any external or commercial influence.
- Confidence in Regulatory Compliance: By directing payments to personal or partnership accounts, Turkish attorneys comply with domestic regulations, ensuring that their legal services align with Turkish law.
Conclusion
In Turkey, law firms cannot function as corporate companies due to the strict regulatory framework established by the Attorneyship Code.
While this structure may differ from what many foreign clients are accustomed to, it upholds the professional integrity, independence, and ethical responsibility of Turkish attorneys.
At Bayraktar Attorneys, we are committed to maintaining transparency with our clients and helping them navigate the nuances of Turkish legal practice. By adhering to these regulations, we ensure that our clients receive legal services that are both trustworthy and compliant with Turkish law.
