Restoring a future for law

I was privileged earlier this month to be invited to deliver the keynote address at the 2013 Futures Conference organised by the College of Law Practice Management and held at the Chicago-Kent College of Law.  My theme was the future of law.  The speech is available as a video (starting about 15 minutes in and with microphone on at around 16:30 minutes!).  However, I also thought it would be worth writing it up as a paper (which is not a direct transcript).  It’s available here.

In summary, the paper addresses three themes: (1) What is Law for?  (2) What are lawyers for?  (3) The Future.  The first two questions to my mind provide necessary answers to the fundamental question, What next for Law?  For each theme, I suggest a proposition.  The substance of the argument is that both law and lawyers have lost sight of their true purpose and that reconnecting with both is essential to enabling a meaningful and worthwhile future for law.

My approach to answering the question, What is Law for? (or alternatively, What is Law’s Purpose?) is to address it as an aspect of the public interest – that is, maintaining the fabric of society itself and enabling the legitimate participation of citizens in society.  My first proposition is that governments and lawyers have lost sight of what Law is for.

Working from the proposition that Law’s Purpose is to maintain and protect the public interest, then the core purpose of lawyers is to advise and represent citizens and institutions in the working out of Law’s Purpose.  But lawyers have created an artificial market for their services.  In all, this false market amounts to a departure from Law’s Purpose.  This leads to my second proposition that governments, regulators and lawyers have lost sight of what lawyers are for.

If we have lost sight of what Law and lawyers are for, a new approach is needed to ensure a decent, meaningful and sustainable future for Law, lawyers and legal services.  However, there are two significant obstacles to this new future: a broken business model of legal practice; and the closely connected issue of inappropriate regulation of legal services and the practice of law.

The business model of the future must focus on creating value for clients, and then resource the firm with the appropriate facilities and technology, people (lawyers and others), and organisational elements of structure, processes, culture, and market profile to do so.  It must also be open to more options for finance, ownership and structure.  Also, the current model of law practice pays out too much money, too quickly, as income, to the wrong people, for doing the wrong things: it is a short-term income extraction model that benefits a select few people disproportionately and inappropriately.  The business model of the future will take a broader view of who should be rewarded for what, and when and how they should be rewarded.

The second obstacle to the future is regulation.  I have come to the conclusion that all legal services that are provided for reward should be regulated – though this still leaves open the questions of how and by whom.  There are four forms of regulation for legal services: the market; accreditation; redress and discipline; and standards.  This can result in a framework for legal services regulation which is a particular and healthy mix of rules, values, and markets.

Accepting (as I do) that law is a business, the market has a role in regulating legal services.  But law is not just a business.  We cannot rely entirely on the market to regulate legal services.  Formal regulation can provide both before-the-event assurance (to stop things going wrong, or at least to reduce the risk) and after-the-event ‘insurance’ (to put things right if they do go wrong).  The deliberate creation of barriers and costs should lead us to question carefully whether before-the-event regulation is justified.

My view is that these barriers should only be erected for two purposes.  The first is to secure public good benefits, such as the maintenance of an effective justice system.  The second purpose is where after-the-event redress or compensation are inadequate, such as when a citizen’s life or liberty is at stake.  In my view, the English notion of reserved legal activities provides too narrow a basis for determining the need for before-the-event assurance, while the US notion of the unauthorised practice of law is too broad.

After-the-event regulation in legal services is usually targeted at a formal complaints process that dissatisfied clients can use, combined with remedies for redress, compensation and disciplinary processes.  In light of the asymmetry between legal adviser and client, giving rise to a general need to protect clients from incompetence and exploitation, I would be in favour of all providers of legal advice and representation (at least where they do so for reward) being subject to after-the-event regulation, irrespective of whether or not they are otherwise regulated.

Finally, we should not overlook the powerful effects of culture and socialisation in ‘regulating’ the behaviour of practitioners.  A set of professional standards and ethics that is followed or enforced offers a strong underpinning to legal practice.  However, these standards should be applied to all those who provide legal services for reward and not just those who happen to be legally qualified.

The thrust of this paper, therefore, is that the best future for law requires us to re-establish sight of some fundamentals because, as a society, we are in danger of forgetting what Law is for and what lawyers are for.  We need to reconnect with Laws Purpose, and properly pursue the public interest.  We need to reconnect with providing value to clients, and properly pursue the client interest within the context of the public interest.  We need to reconnect with a set of values, and properly pursue the professional interest within the context of the public interest and the client interest.  In other words, we need to recalibrate the public interest, the client interest, and the professional interest and the relationships among them.

So my conclusion and third proposition is that the future of law depends on finding a new and proportionate balance of the public interest, the client interest, and the professional interest.

What I am driving at here is the achievement of Law’s Purpose in a business context and with professional integrity – it could be expressed as profitable ethics and ethical profits.  As someone who is passionate about the independent, cost-effective and ethical realisation of Law’s Purpose, I would encourage all those involved – government, regulators and practitioners – to work towards this new balance.

ABS two years on: cautiously optimistic

We are just at the second anniversary of licences being issued for alternative business structures (ABSs).  In the first year, about 40 licences were issued, and progress seemed slow. A year later, there are still only two licensing authorities, but there have been roughly another 200 new licences. The licences we expected for Abbey Protection, AIM-listed Quindell, Knights (backed by James Caan), and BT Law have all emerged.  Conveyancing Direct (connected to Connells estate agency and Skipton Building Society) and Jordans (the publisher) have gained licences, as has DAS Law (Bristol law firm acquired by the legal expenses insurer, itself part of insurance giant Munich Re).

The rate of ABS adoption is hotting up.  Or is it?

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ABS one year on: rushing headlong, slowly

Here we are, then, one year into alternative business structures (ABSs). For those who were expecting a revolution, the start to ABSs has been, well, muted. But was revolution ever a reasonable expectation? The statutory timetable envisages a licensing process that could take up to nine months. The SRA has also ensured that the timetable doesn’t start to run with the submission of a stage 1 application, so its nine-month timeline hasn’t been reached yet. The question is: does 36 ABS licences (ignoring the multiple licences issued to Irwin Mitchell) in the first year represent a good outcome, slow take-up by the market, or slow processing by the regulators? Has the whole thing – as many opponents of ABS would like us to believe – been a damp squib, an unnecessary and expensive addition to the regulatory terrain?

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