Anti-lock braking system on the ABS juggernaut?

The Law Society council has at last decided to approve the SRA applying to become a licensing authority for ABSs (see http://www.legalfutures.co.uk/latest-news/law-society-council-gives-green-light-to-sra-regulating-abss).  But we might still see moves to derail the application – the Sole Practitioners Group or others could yet press for a special general meeting (see http://www.legalfutures.co.uk/latest-news/anti-abs-group-could-decide-as-soon-as-tomorrow-on-calling-law-society-sgm).  So let me get a few things off my chest…

I am broadly supportive of ABSs, though not uncritically so.  We have had more than six years since Sir David Clementi first proposed them.  They are not a new idea; and it’s not as if no-one has spent any time thinking about both the principles and the detail since then.  It’s therefore disturbing to hear a suggestion that a special general meeting vote would ensure that “those members of the profession who up to now have little knowledge of ABS will be made aware of its implications”.

Where have these members been for the past six years?  Do they not read the national and legal press?  What message does such a claim send to the public and clients about the regulatory and commercial awareness of their advisers if supposedly well-informed and up-to-date professionals have missed (or not yet started thinking seriously about) something so fundamental to their businesses?

Such gaps in knowledge or appreciation do not, of course, make the policy behind the introduction of ABSs inherently right.  There are certainly risks with ABSs: the Legal Services Act and the licensing rules recognise and address them.  ABSs will not be an unalloyed blessing for consumers, either.  But that does not make them inherently wrong.  The Legal Services Act was not party political legislation, so trying to persuade the new Government or MPs to stop the introduction of ABSs might not garner much political support.  It’s also difficult to see votes or further savings to the public purse from such a move.  Personally, I don’t think we’ll hear the screech of tyres as the juggernaut is brought to a halt.

Generally, protestations by lawyers trying to stop developments that would encourage or force them to act differently are met with (at best) wry smiles.  Too few people outside the rarefied atmosphere of legal practice believe that only lawyers can be trusted with legal issues.  Lawyers might be right in suggesting that their input would be better for the client.  But that argument is far from being taken for granted by anyone else.

It also flies somewhat in the face of other evidence that lawyers are not as good or as accessible as they think they are – such as the volume of unresolved legal needs of clients who are not aware they have a legal problem, or who are but choose not to take it to a lawyer; the number of complaints against a supposedly high-quality and ethical profession; and the views of professional indemnity insurers.  Each of these suggests that competition has a role to play in improving the accessibility, efficiency and value (and even, dare I say it, the quality) of legal services for the ordinary consumer.

It is not the job of regulation or regulators to protect providers from competition.  It is their job to provide an effective regulatory framework that supports fair competition.  Parliament has decided that ABSs are to be part of this regulatory and competitive landscape.

So it’s unlikely that the juggernaut can be stopped.  Could it be slowed down?  I’m all for having a better system than a rushed one.  But, to repeat, the ABS framework has been worked on for six years.  Spending more time and more resource will not make it perfect – that’s an ideal that will never be attained, as we know from every other regulatory system.  Nor will any framework, however robust, prevent unethical, inefficient or anti-competitive behaviour.  Not all solicitors are ethical and high quality; not all owners or managers of ABSs will be unethical and poor quality.  So, yes, it could be slowed down; but it shouldn’t be.

Subject the necessary Parliamentary timetable to complete the process for licensing ABSs, it’s now difficult to see great benefit in seeking to delay their introduction.  Indeed, many would-be entrants (and even, to be fair, a good number of lawyers who relish the opportunity to be in business in a different way) could argue that they have already waited long enough.  Everyone has had enough time to prepare.  Some have taken advantage of the six-years’ notice; others have not.  If that time was wasted, it’s hardly appealing to ask politicians to intervene or regulators to think again.

With the Law Society’s decision to allow the SRA to seek licensing approval for ABSs, the momentum is likely to gather pace.  Now is not the time for the drivers to hit the brakes … or the detractors to lie in the road.

5 thoughts on “Anti-lock braking system on the ABS juggernaut?

  1. Pingback: The Hitch-Hiker's Guide to the Legal Services Act

  2. Quite so, but surely only when the question of what reserved activities should be relaxed or tightened, or do feel that is also now fully debated and the juggernaut or tanker is not for turning

    • The issue of the reserved activities is crucial – they are the fulcrum around which the Legal Services Act spins, and therefore of central importance to ABSs. But the ABS ‘juggernaut’ will not be held back until the issue of what ought to be reserved in the modern world has been debated and resolved. It seems increasingly likely to me that more, rather than fewer, legal activities will be reserved in the future. This will bring more within the regulatory net and therefore possibly increase the number of new entrants operating within the ABS framework than outside it. Even more reason for those currently operating within the regulatory net to ‘get with it’ and sharpen up their offering.

  3. Good post Stephen.

    I am no expert on the intricacies of ABS and tend to plug in to a network of experts who keep me informed on a ‘need to know’ basis.

    I think where we are similar in mind set is around the whole issue of change.

    I keep coming back to two points,

    1. Change is happening not because lawyers offer a modern uber efficient model but the fact that they offer the opposite and
    2. It is lawyers who have created and allowed this to happen.

    This is a shame because in my experience lawyers tend to do the lawyering bit really well.

    My advice, to continue your driving analogy…

    ..when learning to drive and then after passing your driving test you have to eventually go on the road on your own no matter how much theorising and simulation. This can be scary but it can also be liberating because it opens up a whole world of opportunity.

    Launch and learn I say because it will never be right until you start to implement.

    Jon
    @legaltwo
    ps apologies for any typos…on a train.

    • Thanks Jon. I agree with you about lawyers doing the lawyering well (if we’re talking about the technical component). Still a way to go on the client service and business management sides! Nevertheless, some lawyers and firms have shwon themselves very good at these, too, so it can be done!

      I also share your view about seizing the opportunity and getting on with things. As you say, it might be scary and liberating (in equal, or even unequal, measure); but it will at least start the much-needed journey to a new destination.

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