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Foreign Law
Firms
10.1 Definition
The FDIC
occasionally requires the retention of a law firm located and
operating in a country other than the United States of America
(“US”). For purposes of this Deskbook, a “foreign law firm” shall
be defined as any law firm retained by the FDIC that meets both of
the following criteria:
1. The
law firm does not operate any office location within the US; and
2. The law firm is not
governed by or subject to the US Internal Revenue
Service,
requiring issuance of a Federal taxpayer identification number for
tax purposes.
10.2 Deskbook
Compliance
A foreign law
firm is required to adhere to many of the same requirements of this Deskbook as US firms; however, the FDIC recognizes that some Deskbook provisions, such as laws and regulations that are
unique to the US, will not apply to a foreign law firm. Therefore,
the specific requirements applicable to a foreign law firm are set
out in this chapter, including references to other applicable
portions of the Deskbook. It is important that the principle
members of a foreign law firm, including the accounting department,
understand and comply with all applicable policies, procedures and
forms as specified herein.
10.3
Application Requirements
FDIC requires
all correspondence from a foreign law firm to be in English. Prior
to entering into a Legal Services Agreement, the FDIC requires the
foreign law firm to submit the following items:
1. A firm brochure or a
narrative statement about the firm, including information regarding
the areas of law in which the firm practices and highlighting areas
of expertise.
2. A statement acknowledging
the requirements of FDIC’s policies and procedures governing outside
counsel conflicts of interest and completion of the related
Representations and Certifications form
- Word.
10.4 Legal
Services Agreement
A foreign Legal
Services Agreement - Word 52k
(Word
Help)
(LSA) is an agreement between a foreign firm and
the FDIC that contains terms and conditions applicable to legal
referrals and is incorporated in all referral letters. The LSA and
any referral letter incorporate applicable parts of the Deskbook,
as it may be amended from time to time.
Incorporated in
and attached to the LSA is an
hourly rate schedule - Word
52k
(Word
Help) listing each
attorney and paraprofessional assigned to work on FDIC matters
(approved billable individual).
A foreign law
firm is required to complete the following information on the Hourly
Rate Schedule form for each approved billable individual:
- Full name
- Position or
title within the firm
- Years in
practice
- Standard
hourly rate (in US currency)
- Percent (%)
discount
- Proposed
FDIC hourly rate (in US currency)
The following
fields of the Hourly Rate Schedule form are not required for
foreign law firms:
- Federal Tax
Identification Number
- State
licenses column
- Minority
status column
The LSA and
completed Hourly Rate Schedule form must be signed by an authorized
representative of the foreign law firm.
An LSA is
effective once both the LSA and the Hourly Rate Schedule have been
signed by FDIC delegated authority. The LSA is effective on the
date specified in the LSA and the term is two years from the
effective date unless the Legal Division elects to terminate or
extend it prior to its expiration. FDIC reserves the right to
terminate the LSA without cause or advance notice. Absent
compelling reasons, no increase in hourly rates incorporated in the
LSA will be permitted during its term.
If, at the end
of the LSA term, the foreign law firm is working on a legal referral
and the LSA is not renewed, the LSA will continue for the sole
purpose of completing existing work under the same terms and
conditions until the earliest of:
- All work on
outstanding legal referrals is complete;
- A new LSA is
executed; or
- FDIC
exercises its right to terminate the LSA.
Continuation of
the LSA is not the same as renewal of the LSA. Continuation does
not permit a foreign law firm to receive any new referrals.
10.5 Electronic
Funds Transfer Payments
The FDIC, in
compliance with US regulations, makes payments to vendors, including
any foreign law firm that has an account with a US financial
institution, by means of electronic funds transfer
(EFT). Payments
via EFT allow faster access to funds and payment information, but
can only be used with a US bank account. If a foreign law firm
has an account with a US financial institution, the Legal Division
requests completion and submission of the
Payee Information for
Automatic Deposit of Payment form - Word 47k
(Word
Help).
Otherwise, payments to a foreign law firm will be made via mailed
check.
10.6 LSA
Amendment
An amendment to
the LSA may be necessary when there has been a change in the
information originally submitted in the application package. It is
the responsibility of the foreign law firm to inform the FDIC of any
new or changed information. If the LSA information is not current,
a foreign law firm may not be able to perform legal services for the
FDIC. Additionally, payment of invoices may be delayed if
information is not up-to-date. This information includes, but is
not limited to, structural changes of the firm, as well as adding or
removing billable individuals.
The following fields of the
LSA Amendment form are not required for foreign law firms:
-
Federal Tax
Identification Number
- State
licenses column
- Minority
status column
The completed
LSA Amendment form must include the effective date of the amendment
and be signed by an authorized representative of the foreign law
firm. The original LSA Amendment form should be submitted to the
FDIC office or section that issued the LSA. Once a request to
amend the LSA has been approved, a copy of the LSA Amendment form,
approved and signed by FDIC delegated authority, will be sent to the
foreign law firm. A foreign law firm may not bill the FDIC for
services of any individual unless and until the individual has been
approved and included on the Hourly Rate Schedule form or the LSA
Amendment form.
10.7 Legal
Referral
When the Legal
Division retains a foreign law firm to provide services for a
particular case or matter, a legal referral will be made. A legal
referral may encompass one or more “legal matters”. For example, a
legal referral may encompass litigation of a particular case,
assistance with a subsequent appeal and/or a related bankruptcy
case.
When a legal
referral is made, a referral letter will be sent to the foreign law
firm. The referral letter will identify the specific services
requested and the terms and conditions of the legal referral. The
referral letter incorporates several documents, including the LSA,
applicable portions of the Deskbook, and the case plan and
budget(s), which are required to be submitted by the foreign law
firm and approved by the Legal Division. The referral letter, as
well as the incorporated documents, may subsequently be amended or
modified by the Legal Division.
At the time a
legal referral is made, a foreign law firm must confirm that no
material changes have occurred that affect representations and
conflicts certifications contained in the application package
originally submitted to the Legal Division by the foreign law firm.
10.8 Invoice
Package
The Legal
Division has specific policies and procedures relating to
submission, processing and payment of legal invoices. A foreign law
firm is required to adhere to the requirements for completing an
invoice package and submitting it to the FDIC as set out in Chapter
7 of the Deskbook. In addition to the requirements identified in
Chapter 7, any invoices submitted by a foreign law firm must be in
English and U.S. dollars, calculated at the exchange rate at the
time the services are rendered.
It is important
that the principal members of a foreign law firm, particularly the
accounting department, understand and adhere to the required
policies, procedures and forms relating to submission of an invoice
package.
10.9 Other
Applicable Deskbook Chapters
In addition to
the information specified in this chapter, the following Deskbook
chapters are also applicable to a foreign law firm:
Chapter 1 –
Representing the FDIC
Chapter 2 –
Conflicts of Interest
Chapter 5 –
Case Management
Chapter 6 –
Case Plan and Budget
Chapter 7 –
Invoice Package
Chapter 8 –
Legal Matter Closeout
Chapter 9 –
Post-Representation Responsibilities
10.10 Value Added
Tax (VAT)
For issues related to the Value
Added Tax (VAT) please contact the Legal
Services Group (LSG) at 1-877-275-3342.
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