CMA market study and the pressure for regulatory change

The Competition & Markets Authority (CMA) published the final report of its market study into legal services in December 2016.  At 285 pages (and a further 233 pages of appendices), it is not a light read!  Nevertheless, it is worthwhile – though for those with less time or stamina, the executive summary on pages 4-19 will give a flavour of the review’s scope, conclusions and recommendations.  It should also be emphasised that the scope of the study was intentionally limited to the experiences of individual consumers and small businesses, and that criminal legal services were excluded.  The study is not therefore a review of the whole legal services sector.

The headline conclusion from the review is that the legal services sector is not working well for individual consumers and small businesses, largely because those consumers lack the experience and information they need to understand their needs, to make informed choices, and to engage confidently with providers of legal services.  The CMA also concluded that these challenges are likely to increase over time and make the current regulatory framework unsustainable in the long run (especially since, in the CMA’s judgement, that framework also does not meet the principle of targeted regulation).

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Democracy is a strange thing …

Much has been said and written about democracy and democratic will recently.  In the past two years in the UK, we have had a General Election and an EU Referendum.  Both were, in different ways and for different purposes, an expression of ‘the will of the people’.  Or were they?  Democracy is a strange thing; and a Parliamentary democracy is stranger still.

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In-house lawyers and their moral compass: true north or magnetic interference?

The long-known tensions faced by in-house lawyers between serving their employer and staying true to their professional obligations receive some tough probing in research published today – with fascinating insights.  To what extent is the ethical imperative or ‘moral compass’ of in-house lawyers affected by their personal characteristics and by the overt, subliminal or cultural influences within their client-employer organisation?  The short answer is that it is affected, by many influences, contexts and drivers, and to varying extents.  As the lead author, Professor Richard Moorhead, says, the research report provides “as rich a picture of what it means to be an ethical in-house lawyer as has ever been attempted”.  A summary is available, and the full report can be downloaded here.

Evidence of the tension in in-house legal practice is perhaps most acute in the finding that almost 50% of respondents agreed that actions were sometimes taken in their organisations that were against their advice on legally important matters.  More than a third also agreed that loopholes in the law should be identified that benefit their employers.  These and other findings raise interesting and important questions about the extent to which lawyers’ professional codes are being diligently applied by in-house lawyers.  It might also perhaps prompt one to wonder ‘where were the lawyers?’ when various corporate scandals were being perpetrated….

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