Transforming the practising bar

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If you’d like a glimpse of the legal profession of the near-to-mid-future, look to London. Yesterday, the UK’s Bar Standards Board launched a consultation paper concerning the effect on barristers of the new Legal Services Act, which received Royal Assent last October. (The Solicitors Regulation Authority addressed the LSA’s impact earlier.) Here’s LegalWeek and The Lawyer on the announcement.

The BSB’s 50-page consultation document asks for submissions on how the Board should respond to the LSA, specifically regarding Legal Disciplinary Partnerships (different types of lawyers and a minority of non-lawyers practising together) and Alternative Business Structures (firms that offer both legal and non-legal professional services and that could be owned by non-lawyers, from shareholders to supermarkets). LDPs might not seem like a big deal to North American lawyers accustomed to our fused profession, but we should understand that it represents a whole new way of looking at the Bar in England and Wales, and it won’t be an easy road there.

But it’s the ABS regime that has people on this side of the pond talking, because it authorizes not just multi-disciplinary practices, which the Canadian and American bars wrestled with and ultimately rejected over the past decade, but also non-lawyer ownership of legal service provision, which is anathema to the vast majority of lawyers and their regulatory bodies. ABSs aren’t likely to appear in the UK before 2011 — it takes time to set up an entirely new governance structure for an ancient profession — but they will come. And when they do, it’s only a matter of time before they cross the pond.

There’s been a lot written about the future impact of the LSA on North American lawyers — Bruce MacEwen has been on top of this from the beginning — but it seems to me that if any member of the Magic Circle floats shares, merges with an accountancy, or otherwise takes advantage of the ABS options to greatly enhance its capital and strategic reach, then their New York-based competitors are going to want a level playing field on which to compete. And if that kind of regulatory change occurs in one US jurisdiction, dominoes will start falling all over various states and into Canada. In a globalized economy, any country that refuses to allow its lawyers to play by the same business rules as their foreign competitors will relegate those lawyers to a purely local purview. That’s not in anyone’s interests.

This is not happening overnight — probably we’ll see this whole situation play itself out around the middle of the next decade. But it’s not far away, either: by the time today’s first-year law students are into their third year of practice, this will be the reality on the ground. The challenge for law firms is to start thinking now about what kind of business structure makes the most sense for their practices and clients, because their options should expand dramatically in the near future. The challenge for governing bodies is how to prepare themselves and their members for an entirely new way of organizing the practising bar.

Here’s a parting thought from BSB Chair Ruth Evans, announcing the Board’s consultation paper: “We may not see barristers selling their services in the supermarket aisles quite yet, but we can expect changes in the way some organize their affairs and offer their services.” Emphasis added, and how.

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