Wednesday 14 May 2008

A survival manual for law asscociates

Research shows that in many law firms, associates are the most vulnerable to lay-offs. More often than not, their production capacity is already well-known by the partners and the decision to retain or not is therefore not hard to make as is with pupils. They are also expected to justify their salary contributing to the firm's bottom line.

What does it take to survive when your next law-firm's layoff? What is an associate (or even a pupil) to do to ensure that s/he does not fail on performance in estimation of the firm decision makers? Here are dos and don'ts that I deem the essence of associate life.

Cater to the boss: Partners (and senior associates) can be eccentric, but it's the associate's job to adapt. Assimilate the habits, likes and dislike and even particularities of the people with whom you're going to be working. Such things as simple as how they like [work] presented, the font of legal briefs, whether they like stuff oral or writing, and what detail they would in your work are a must-know. Also get familiar with your bosses work schedules; know whether you're working with people who start early or stay late. For instance, my boss is an early riser and so we have to make it to office before 7 am.

Stick your neck out: In today's practice, being pro-active is not just a matter you have to lie about during interviews. It is a plus if you are the kind of lawyer who will take initiative on matters that mean business for the law firm. Associates who tend to launge in their office and wait for the office memo or buzzer to tell them what next should mind their skin. In contrast, the future belongs to those who go out and try to be more proactive in the types of assignments they're getting. For some of us, that's a natural; for others, that means getting out of your comfort zone. Here is the point, with so many things going on in a law firm, stick your neck out and look for experiences that you might feel you don't have any relevant background in. Ultimately, people are going to specialize. But early on, get whatever experience you can.

Whether you want to make partner or not, feign you do! Today's associates tend to focus on what they're doing — today – and where that's leading them. Many associates no longer hold to the idea of working hard for the firm to make partner. If that was so, the motto would be: 'Do whatever the firm requires in order to become a partner. Associates don't necessarily join firms anymore with the goal of becoming partner. This owes to the fact that the expectation of today's generation of lawyers is that they are going to hold many jobs in their lifetime. There is no problem with that notion until an associate starts taking the current job casually as a result. It is important to know that law firms want associates who are looking long term. Long term does not necessarily have to be lifetime, It could be five years or even less. But importantly, the associate's enthusiasm in what the firm does must be seen by the law firm management as that of someone in the firm for the long haul. Do it like you want to make partner tomorrow!

L-K'ers: What is your take on this article? Email your opinion now to: pmusyimi@gmail.com

A landmark in Kenyan tax law jurisprudence: Keroche Industries Case

Citation: Keroche Industries Limited versus Kenya Revenue Authority & 5 others [2007] eKLR

This case involved an application for judicial review by the applicant company, a manufacturer of wines, against various orders and decisions of the KRA.

Facts of the case

The facts were that the applicant and its predecessors applied for a license to the customs department to manufacture wines on or about 1996 and 1997 and a license was granted which classified the applicant's product under Tariff Heading 22.04. According to the applicant, they paid duty under Tariff Heading 22.04 from 1997 to 2006. That is, until a decision to change the tariff was communicated to it vide a letter dated 29th November 2006. The decision communicated was that the Applicant's fortified wine products were wrongly classified under tariff 22.04 but should have been classified under Tariff Heading 22.06. The latter Tariff, namely 22.06 attracts a higher rate of duty than tariff 22.04 in that it attracts 60% instead of 45%.

By the same letter, the Respondents issued a tax assessment based on the new tariff 22.06 from the year 2002 to 2005. Consequently, the letter demanded from the applicants the payment of approximately Kshs. 1.1 Billion with 14 days of November 2006. This amount was without the usual penalties and therefore the actual amount due was certainly higher than the figure stipulated. Although the figure quoted included amounts in the rest of the various tax regimes, namely; Custom Excise Duty, VAT, Withholding tax and Income ax, only one global demand was sent to the applicant.

Key issues for determination

There are two key issues relevant that the court tackled ably as to deserve revisiting. One is jurisdictional competence of the court to intervene in matters where the applicant has failed to exhaust other tribunals with jurisdiction on the matter. On this point, it was submitted for the Respondents that the court ought not to have intervened in the matter because various tax tribunals could have sorted out the matter. The court however did not agree. It was the court's view that the issue should be considered from the standpoint of the rule of law. It held that while judicial review could be a collateral attack, the right of assess to court is a fundamental principle and cannot be taken away except in exceptional cases.  The present case, in the courts view, fell within the bounds of the exception. The court did not however lay down the criteria for determining when the right to access court for judicial review should or should not be denied in Kenya.

Retrospective application of tax tariff similar to ex-post facto law

The other issue worthy revisiting is whether retrospective application of Tariff is similar to ex-post facto laws. The court held that retrospective application is a Wednesbury unreasonable, irrational, oppressive, biased, discriminating, mala fides, unfair, arbitrary, and procedurally improper and abuse of power. The court, in so holding, upheld the legitimate expectation of the applicant, that it would not abruptly and unilaterally be transplanted from Tariff 22.04 which had been the basis of its business and its business plans and projections over the nine years. In particular, the court found the respondent's decision to have threatened or threatens to thwart the above legitimate expectations and the court reasoned that it must come to the defense of legitimate expectations because fair bargains ought not to be thwarted-this being a principle of fairness.

Excepts from judgment on topical issues

The court stated in conclusion:


"It seems apt to state that public authorities must constantly be reminded that ours is a limited government- that is a government limited by law-this in turn is the meaning of constitutionalism. Certainty of law is a major requirement to business and investors. Imposition of a different tariff, to that an investor contemplated when setting up an industry is reckless, irrational and unreasonable and it violates the principle of certainty and the rule of law. Such a style of decision making cannot offer a conducive business and investment climate. The courts have a role in keeping public authorities within certainty of law. To enable them to do this, the frontiers of judicial review have to expand. For now, let it suffice to state and hold that the actions and decisions of public authorities must be questioned, directed and shaped by the law and, if not, the courts must intervene. This is the essence of the decision."

 The court added on certainty of law:

"I think it is significant to stress on the ground of certainty of law as an ingredient of the rule of law because it is very easy for public authorities and bodies to overlook it in their decision making processes as has happened in this case."

The judgment is not complete without the courts statement on rule of law. It stated:

"The rule of law is the cog upon which all provisions of the constitution turn. For example, the intended tariff change has clearly been shown to have been discriminatory in its effects contrary to section 82 of the constitution. I hold that the public bodies decisions and activities should always turn on this cog as well, failing which the courts are entitled to intervene where this is overlooked, as I have done in this case."

Conclusion

The court's finding that retrospective applications of tax legislations are unenforceable as they are similar to ex-post facto laws is a relief to business and businessmen. The case stands out as an authority in that respect and promises to boost Kenya's standing as an ideal investment destination no small deal.