Category Archives: Regulation

CPD: compliance, competence or development?

Posted on by

I attended the Bar Standards Board’s Clementi Debate on 26 May.  The subject was whether the education and training of lawyers in England & Wales is fit for purpose.  The content and debate, however, were more narrowly focussed on the fitness for purpose of continuing professional development (CPD) for barristers.  It seems to me, though, that the issues are of broader application and importance.

I don’t need to rehearse here the content of the presentations.  Thankfully, not all speakers started from an assumption that the present approach was fit for purpose.  What disturbed me was my own growing sense of unease through the evening – for reasons I couldn’t initially pinpoint.

All present seemed to agree that CPD was ‘a good thing’, with its implicit consequence that lawyers who undertook sufficient and relevant CPD would be (and were) better practitioners.  I would not dissent from that proposition – even if we might (and the panellists did) differ on the meanings of ‘sufficient’, ‘relevant’ and ‘better’.

What the Debate did not address, despite some suggestions that it should, was the public interest in regulatory intervention in CPD.  It is a regulator’s function to determine whether or not a practitioner is competent to practise.  It might even be their function to require CPD to be undertaken.  But how prescriptive should that requirement be?  And in whose interests is the intervention made?

The current approach is to require a certain number of hours to be undertaken (the proposal for the Bar is that from January 2013 this should rise to 24 hours a year).  My sense of the meeting was that all agreed that a ‘one size fits all’ approach was not sensible, because the nature of practice changes over time, as do personal development needs.  I must be missing the point, though, because it seems to me that a universal requirement for 24 hours a year is a one-size-fits-all requirement.  So the ‘sufficiency’ proposition appears to be on shaky foundations if framed in terms of an input (hours) rather than an outcome (competence).  But at least a minimum number of hours makes compliance easy to assess (for the regulator and the regulated) … even if it actually fails to assure continuing competence.  That might explain part of my unease.

There is clear evidence from CPD providers – and it has changed little during this country’s 25-year experience of professional CPD – that, as the CPD year-end approaches, lawyers will attend (in body, though rarely in mind or spirit) any CPD event that will get them over the hours threshold.  The content can be entirely irrelevant (to competence); and the behaviour (in making the choice and in not being truly ‘present’) is not what one might expect from a professional.

Some maintain, against this background, that CPD is fit for purpose.  That begs a fundamental question about what the purpose is.  The reality in the circumstances I’m describing is that the CPD obligation has achieved compliance, but not competence or development.  Compliance without competence or development strikes me as a rather sterile objective. (It might be true that education is never wasted – if, in the circumstances I assume here, there has been any; but that is still not necessarily the same as competence or development.)  The relevance requirement therefore also lies on some shaky foundations.  My unease mounts.

I confess to admiration for the New Zealand approach (thanks to panellist and BSB board member Matthew Nicklin for this): a requirement in the code of practice that a practitioner “must undertake the continuing education and professional development necessary to ensure an adequate level of knowledge and competence in his or her fields of practice”.  What a refreshing approach: treating practitioners as responsible professionals, able to make their own judgement about sufficiency and relevance – and being willing to be judged and held accountable after the event (on the basis of competence demonstrated, or not) rather than being told before it to satisfy some arbitrary input proxy (hours spent).

So, does this sometimes insufficient and irrelevant process nevertheless produce ‘better’ lawyers?  Of course it might.  But I’m not sure that this should be the objective for a regulator (as opposed to a representative body).  Surely, regulators, through regulation, should confine themselves to securing minimum levels of competence (which might nevertheless be set at high levels) rather than pursuing aspirations based on relative competence beyond that minimum level?  After all, regulation is an intervention in otherwise private activity, and such intervention should in my view be justified in the public interest.  What, then, is the public interest here?  My conclusion would have to be that it is to protect clients from incompetent practitioners, and to achieve a broader confidence of the public in the competence of those authorised to provide legal services through maintaining standards for authorisation and removing those practitioners who fall below them.

My contention, therefore, is that the regulator should assure competence.  This is in part an issue of the qualification and entry requirements sufficient for becoming an authorised person under the Legal Services Act.  CPD has nothing to do with this.  The regulators must then over time be satisfied that a practitioner is suitable to remain an authorised person.  Is CPD relevant to this?  Yes of course; but only, I think, in a sense more limited than current CPD requirements assume.

If a practitioner is the subject of a serious complaint about competence or service, or is found to have been professionally negligent, there must be questions to be asked about their competence and the public interest in them remaining able to practise.  I would regard it as an entirely relevant question then to ask whether or not they had undertaken any CPD to maintain the currency and relevance of their competence, and to explore in detail exactly what CPD they had done and when.  That should legitimately inform a regulator’s judgement about the extent of culpability in relation to the professional lapses complained of and the assessment of continuing fitness to practise.  But that judgement will be exercised in the specific circumstances of a particular complaint, at a certain point in time, and in the context of the practitioner’s performance at that time and in the period leading up to it.

I’m led to the conclusion that the true value and utility of CPD as a regulatory obligation can only be judged in retrospect, and that to seek to prescribe in advance (especially by something so crude as an input measure of time spent) misses the point.  The public interest requires an assurance of competence at the point of authorisation, and action to remove from practice those who subsequently fall short.  It is not well served by universal and broad-brush requirements that ensure compliance rather than competence.

In the end, therefore, I’m drawn to the New Zealand approach.  Every lawyer should be under a regulatory obligation to maintain their competence and fitness to practise.  The New Zealand approach requires that.  Of course, CPD should be encouraged: development beyond the minimum required to practise should be a lifelong quest for any self-respecting professional.  Personal aspiration and motivation will drive this, supported by the professional representative bodies.  I question, however, whether the regulator should be focusing on professional development beyond the minimum competence required for practice.

The regulator should certainly remove from practice those who have been demonstrated not to be up to the required standard of competence.  That is a specific judgement required after the event in light of a range of circumstances, including whether ‘sufficient’ and ‘relevant’ CPD had taken place.  Disciplinary proceedings against those who have not undertaken enough CPD hours (failure to comply) does not actually assure their continuing knowledge and ability (failure of competence) – and probably costs the professions something in practising certificate fees to no great avail.

My unease therefore relates to:

  • the confusion of compliance with competence and development; and
  • regulators’ focus on achieving some abstract and relative notion of ‘better’ when their attention should be directed to removing the incompetent and unethical from practice.

Consequently, CPD should relate to competence; it is not secured by compliance with an hours threshold, and development beyond the required minimum level of competence is a personal and relative matter.  Whether someone has fallen below that minimum level cannot be assured by CPD, and can only be judged confidently in retrospect.

My conclusion is that the scope for prescription of CPD requirements is therefore more limited than current approaches appear to acknowledge, with the result that regulatory intervention relating to CPD goes further than the public interest requires.

Anti-lock braking system on the ABS juggernaut?

Posted on by

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.

Sole practitioners and regulation

Posted on by

I was interested in a piece in this week’s Law Society Gazette (see http://www.lawgazette.co.uk/news/compliance-rules-may-hit-sole-practitioners).  The Sole Practitioners Group has warned that treating sole practitioner firms (SPFs) in the same way as other firms could lead to many of them no longer practising.

The SRA wants to simplify the regulatory framework, and therefore SPFs would have to appoint a compliance officer for legal practice (CoLP) and a compliance officer for finance and administration (CoFA) – in the same way that other firms and ABSs will be required to do.  The SRA recognises that the same person might be appointed to both roles (although the CoLP must be legally qualified).  But the SPG claims that individuals within SPFs would not have the time to perform both roles effectively.

Now, I have a good deal of sympathy for sole practitioners having to cope with an ever-increasing compliance burden.  It is much the same for many small businesses.  But I have to say that, if a sole practitioner wants the privilege of providing legal services protected by statute (the reserved activities), surely they can’t complain if they are required to be accountable to the regulator for those services through an individual who carries the responsibility?

It is undoubtedly relatively more burdensome for one individual in a sole practice or small firm to discharge compliance functions.  However, it seems to me that clients and the public have a legitimate expectation that those who are regulated will be properly supervised by the regulator.  If SPFs and other small firms cannot do this effectively (apparently on their own admission – or, at least, the SPG’s), this does rather support the argument that they are too small to be economically viable and present too great a risk to the public and the reputation of the profession.

Was that the conclusion the SPG intended us to draw?  Does the Law Society agree?  Does the SRA know?  Are the professional indemnity insurers watching?