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Back to college: can the Law Society reinvent itself and protect the solicitor brand?

Having a single legal regulator may be a pipedream but the debate is forcing stakeholders to consider how they need to adapt

10 December 2013

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Having a single legal regulator may be a pipedream but the debate is forcing stakeholders to consider how they need to adapt

The concept of a single legal regulator, first suggested by Legal Services Board chair David Edmonds in March, wasn't ever likely to get much support
from the organisations that would disappear as a result of his proposal.

Edmonds' idea has since been expanded in the LSB's blueprint for reforming legal regulation, published in September, which was his opportunity to suggest that representative bodies should become organisations akin to the royal colleges.

Three months on and a
fair amount of controversy
later, the LSB remains as determined to press for change despite growing opposition to the proposal.

Realistically, the chances of any legislation this side of an election are fairly low, concedes LSB chief executive Chris
Kenny. But "the case for a single legal regulator remains as strong as ever".

"The challenge is how on earth you get there from here," he says, reflecting on the lack of action following a report by former civil servant Nick Smedley four years ago suggesting that smaller regulators should consider merging. "In the absence of real political leadership and government support, this might well not happen.".

There is another reason, which goes back to the fate of the existing bodies under the proposal. "They've all got a real challenge. If the Law Society is not the approved regulator anymore, what's the value of its offering in the market, what value does it add as a trade body to firms and individuals which they would be prepared to pay for?" he asks.

One particular sticking point is the component of the practising certificate fee, which does not relate to regulation. "The oddity we highlighted in the blueprint is this compulsory campaigning surcharge which approved regulators can charge quite apart from the cost of regulation (see box out). I don't know of any other parts of the economy which do this. I wonder whether some of the nervousness about letting go of the regulatory title isn't really about guaranteeing their own position and ensuring the flow of cash, because they're not, deep down, sure about what their offering would be."

This being said, Kenny suggests there are no grounds for such nervousness, because "any solicitor worth his or her salt will want to belong to a top-flight professional body" and "engage with it on defining standards of excellence". But for a body like the Law Society, he continues, "it's one thing letting go of the compulsion principle and another to really trust yourself to devise that more flexible offer".

This raises another question: what would be the effect on shared best practice across the profession if various runaway groups became the 'legal
college' of choice for their part of the sector, such as the City of London Law Society for large commercial firms.

"The question is to what extent do you really have a unified profession anyway," Kenny replies. "The LSB's blueprint itself envisages looser regulation for large commercial firms on the basis that their clients do not require the same level of protection as smaller firms'. Beyond very basic public interest and ethical standards you don't necessarily need to impose the same regime on all firms or a single voice," he says, suggesting that other industry sectors have organisations
as umbrella bodies with
different spokespeople on different topics.

"There are lots of incentives for the City of London Law Society and the Law Society to work together, but to assume that they will always necessarily have the same views on the same issues might lead you to a world where actually neither side are really satisfied and you end up with a lowest common denominator comment."

One major concern - yet not satisfactorily addressed - is what would happen to the solicitor brand if regulation becomes primarily based on activity rather than title. The ever-increasing number of law graduates seeking to qualify as solicitors suggests that the brand is far from dead, but will it retain its appeal as alternative qualifications come on stream and new entrants get established in the market?

"You might think that the brand of solicitor is more important; the trust it commands in the market is so great you'd want to have it to have that greater goodwill," Kenny says. But it would be a miscalculation, he adds, if firms thought it would help them "avoid the oil rush of competition from elsewhere, or changing expectations, or the fact that people will want more problems to be resolved first time around".

How the Law Society defines its role could also be critical to the future of the solicitor brand, Kenny suggests. "Initially, it would give you a bit of guidance on how to do things better, but the need for support now is very different, it's no longer about publishing a guide to the next version of the Code, and it's more about identifying what best practice is, or carrying out more original research to make our case to government or regulators, or give people commercial resources assistance with business plans. You could see it evolving."

At first, the idea of a single regulator didn't sound terribly relevant to the profession, particularly at a time where most firms are more concerned about issues such as financial stability. But the debate is gathering momentum, in part because of the government's own review of legal services regulation.

As Kenny admits, a single legal regulator may never see the light of day, but by forcing stakeholders to consider it, the LSB is challenging the whole profession to start thinking differently. That, in itself, would not be a bad achievement.

VERBATIM CLOSED-SHOP LEVY



“What we’ve said in the blueprint is that there is something odd about a world where professional bodies can levy not just for regulation but for other things as well,” Chris Kenny says.

“Those things are laudable concerns about the rule of law and other ‘permitted purposes’ in section 51 of the Act – but nevertheless, it’s a compulsory levy, and it seems to me the burden of proof ought to be on them to say why this is justified when you don’t find anybody elsewhere with the ability to do that.

“You could caricature ‘permitted purposes’ as a closed shop levy. It’s not because the purposes you can use it for are far more constrained, but the professional bodies don’t do themselves any favours by making it look like a closed shop levy, which it does if you can’t opt out of it.

“Within a profession people are very likely to want to opt in to support these goals, but they are actually likely to opt in and support them significantly more strongly if they feel there’s an element of choice and they can engage a bit more and shape them, and see rather more what the professional body does to deliver them, rather than seeing this as just another £500 on top of the practising certificate fee.”

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