The evolution of lawyer regulation

The thing about change is that once it gets rolling, it’s almost impossible to control and can go in directions you neither anticipated nor like very much. That thought occurred to me while reading a report issued last week by the Legal Services Policy Institute, the think-tank division of UK legal training company The College of LawTowards a New Regulatory Structure for Corporate and Commercial Legal Services: Options for Change is just 23 pages long, half of which is a lengthy appendix. But what the report recommends looks to me like an entirely new system of lawyer regulation, one I’m not sure I’m crazy about.

A little background: if you’ve been following the course of events flowing from the Clementi Report and the 2007 Legal Services Act, you’ll know that the UK legal profession is in the midst of redefining itself. On this side of the pond, we mostly hear about the LSA’s provisions to allow alternative business structures and non-lawyer ownership of law firms. But a major element of the reforms involved splitting the Law Society’s previously dual functions of solicitor regulation and representation, on the grounds that the same body could not both govern professionals in the public interest while also advocating for the interests of those professionals.

Regulation of the legal profession in England & Wales is to be the overall province of the newly created Legal Services Board, which launched on Jan. 1 and aims to assume all the powers assigned to it under the LSA by the end of this year. The Board will oversee all the various regulatory bodies for lawyers, such as the Bar Council, the Institute of Legal Executives and the Council for Licensed Conveyancers. Until the Board becomes fully functional, the Law Society technically remains the approved frontline regulator of solicitors, through the Solicitors Regulation Authority, which was partly spun off from the Law Society for this purpose. The SRA remains officially part of the Law Society, but is independent from it. Relations between the two are not always warm, and have just taken a marked turn for the frosty.

This is kind of an interim period in the regulatory overhaul process: the Legal Services Board is active but not yet fully on stream. That’s why some people were taken by surprise last fall when, with one day’s notice to the SRA, the Law Society commissioned a report to review the lawyer regulation process. That report’s author in turn commissioned a sub-report on whether current regulation of law firms serving corporate clients is satisfactory. It’s in the context of this mishmash of reports and political jostling that the Legal Services Policy Institute report was issued and needs to be understood.

The report’s premise, as I read it, is that a single regulatory framework can no longer properly govern the extreme range of solicitors’ practices in England & Wales. More specifically, the traditional framework, geared towards sole and small-firm practice in smaller communities, simply doesn’t work for the major corporate/commercial firms of London and their clients. In areas ranging from defalcations and conflicts of interest to client sophistication and lawyer transfers from other jurisdictions, rules meant for a smaller profession serving private clients constrain and damage global firms serving massive corporate and institutional clients.

The report’s recommended solutions are radical. While nodding towards a midway approach — merely modifying the current SRA regulations for large commercial firms — the report’s clear preference is to create a brand new regulatory regime for these large firms and the lawyers who work within them. This new regulator would create and administer new qualifying criteria and would even bestow a new title for these firms’ lawyers to use (the report refers to these, in uncomfortably Orwellian terms, as “NewReg,” “NewQual” and “NewTitle”). Here’s how the Institute summarizes its case for a new regulatory regime: Continue Reading

Podcast on conflicts of interest

Law21 was quiet for a week while I worked the Canadian Bar Association’s Canadian Legal Conference in Quebec City. Among the highlights for me was moderating a podcast on the CBA’s just-released Final Report of its Task Force on Conflicts of Interest. You can access the podcast by clicking the third link in the right-hand column on the CBA’s Conflicts Home Page.

The podcast, which runs less than 25 minutes, featured three members of the task force: Chair Scott Jolliffe, managing partner of Gowling Lafleur Henderson LLP, and members Gord Currie, EVP and General Counsel of George Weston Ltd., and Simon Chester, a partner with Heenan Blaikie LLP and fellow Slawyer. We talked about the report’s principal recommendations, the valuable Toolkit that accompanied it, and why conflicts matters so much to both lawyers and clients. Hope you find the program interesting and the report useful, no matter where you practise.

Here come the orderlies

This Law Times article, about changes made in 2006 to Ontario’s Law Society Act that have suddenly galvanized lawyers in the province, makes for an interesting read. Those amendments brought paralegals (non-lawyers providing limited legal services) under the regulatory authority of the law society, which now refers to both lawyers and paralegals as its “licensees” and administers a modified (some say less stringent) form of the barrister’s oath to both sets of legal service providers.

Last week, these changes prompted a motion before the law society’s annual general meeting. It urged that the law society’s bylaws be amended to once again refer to lawyers as “lawyers” and “members” rather than “licensees,” to restore the traditional barrister’s oath and not administer it to paralegals, and to never do something like this again without full-scale consultation with lawyers. Students of Canadian history might appreciate the fact that the motion passed by a vote of 54-40.

I’m not taking a position one way or another on the motion’s merits, because I’m far more interested in the language used by the lawyers to describe their concerns. What’s at play here is more significant than semantics — it’s an illustration of the visceral reactions provoked when members of a group long accustomed to exclusivity and privilege suddenly find those characteristics slipping away.

From the motion: “[I]t is demeaning to lawyers to be treated as a class of licensee.”

From the article: [The lawyer who brought the motion] was disturbed by the “watering down” of access to justice aspects of the barristers’ oath, and that “it’s now a licensees’ oath.” She says other professions would not permit similar changes to their own oaths. “Neither engineers nor doctors would dream of changing the language so that technicians and orderlies and the like could swear the same thing.”

From the article: A lawyer who identified herself as a provincial offences prosecutor said she’s been disturbed by a recent trend of justices of the peace referring to paralegals as “officers of the court” or “friends of the court.” “We are no longer a profession,” she said. “I think it’s a mistake.”

The distinction being drawn here between professionals on the one hand, and “technicians and orderlies and the like” on the other, couldn’t be any clearer. Status matters — a lot — to lawyers, and for some, the normalization of relations with non-lawyer service providers threatens to diminish that status. As non-lawyers continue to pour into lawyers’ traditional marketplace in the years to come, we’re going to see vivid illustrations of the lengths lawyers will go to in order to preserve that status. And we’re going to finally see, forced out into the open, a debate about what it really, actually means to be a lawyer.

A law society bencher, lamenting what she viewed as a failure to communicate to lawyers the effect of paralegals’ integration into the law society, said: “Nobody seems to clearly understand what we are and what we aren’t.” Indeed.

Micro law schools

Two interesting articles by Alex Dimson at Law Is Cool today have me thinking about a possible next step in the evolution of law schools. Two Ontario universities have applied to set up law schools: Lakehead University in Thunder Bay and Wilfrid Laurier University in Waterloo. Alex reports that Lakehead’s application, although on shakier ground with both the Law Society of Upper Canada and other law deans, seems to have political momentum, while Laurier’s isn’t so fortunate. I personally think there should be no new law schools until Ontario fixes its training and licencing regime, but that’s a story for another day.

What interests me more is how the universities are pitching the proposed law schools. Lakehead suggests a class size of just 50 students, while Laurier envisions no more than 75, and each is described as specializing for particular regions and practice areas. According to Law Times, the Lakehead school “would focus on aboriginal law, access to justice in northern and rural communities, decreased access to the profession for students from northern Ontario, and the decline of participation in sole and small firms in the area.” In the LIC story, University President Fred Gilbert added natural resources to the list. Thunder Bay is in small-town Ontario, deep in mining country and close to several aboriginal populations, so the program sounds like it would be very much tailored to the community.

Laurier, meanwhile, is in Canada’s new high-tech heartland of Waterloo, home of BlackBerry maker Research In Motion and other innovative companies. Laurier President Fred Blouw framed the issue this way in another Law Times story: “With respect to the Kitchener-Waterloo area as a hub of intellectual property development around the technology sector, [there is] a tremendous need for specialized legal training, legal knowledge, and a need for more bodies.” The story adds that “the school also draws many students from rural centres, where lawyers often practice in a small firm or sole practitioner setting.”

This makes me wonder if, following the lead of microbreweries and microlenders, we might someday soon see the debut of the micro law school: a boutique institution with intentionally small class sizes that aims to produce graduates specialized for certain types of private-practice careers. Continue Reading

Transforming the practising bar

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.

Articling abolition? A groundbreaking LSUC report

It arrived quietly and without fanfare. I’ve seen no reports of it in the mainstream media or the legal press. In fact, the young-lawyer-focused law blogs Precedent and Law Is Cool are the only places I’ve seen talk about it so far. But the Law Society of Upper Canada’s Licensing and Accreditation Task Force Interim Report To Convocation, delivered last week in Toronto, is set to completely overhaul the process of admission to the practice of law in Ontario and, eventually, the rest of Canada. If you’re a law student, a lawyer who intends to hire new lawyers someday, or interested at all in the present and future direction of lawyer training in Canada, this report is an absolute must-read.

The main interim report is 44 pages long, followed by an additional 152 pages spread out over 10 appendices. I doubt there’s ever been a more comprehensive report on the bar admission process (nor will any other province likely try to duplicate the task force’s efforts or findings), and I can only imagine what the final report will look like. For what it’s worth, I think the report’s findings are accurate, timely and sorely needed.

I don’t have time here to break down the report in detail — I’ll be writing a more comprehensive commentary that will appear at SLAW in a few days’ time and will be cross-posted here. But this is what you need to know:

1. The Task Force recommends the abolition of the current Skills and Professional Responsibility Program from the bar admission process in Ontario. Of all the reasons the task force gave for this recommendation, perhaps none is more suprising than its assertion that right now, law schools are doing a better job of teaching students skills and professional responsibility than the law society is.

2. The Task Force offers three alternatives to the current articling process by which lawyers ostensibly receive sufficient practical training to enter the practice of law. These are:

(a) make it extremely clear to all current and prospective law students that the law society does not guarantee articling placements, and accordingly cannot guarantee that a law graduate can become a practising lawyer (laissez-faire).

(b) set up or certify a parallel Practical Legal Training Course that provides law graduates who could not obtain articles the chance to earn an equivalent certification in practical legal skills training (Australian model).

(c) Abolish articling outright (the U.S. model).

The Task Force makes no recommendation concerning these three options — it offers pros and cons of each — but it makes quite clear that the status quo is not sustainable, not least because the Ontario bar admission process is facing a tsunami of rising applications over the next few years, culminating in an expected 2009 application class no less than 38.7% larger than in 2001.

The report is groundbreaking, if for no other reason than that it squarely lays out the numerous shortcomings of Ontario’s present bar admission process and demands that the profession act, now, to change. Go read it.

Divided profession, collective governance

For your consideration: here’s a list of all the governing and/or regulatory bodies for health-care professionals in the province of Ontario:

College of Audiologists and Speech-Language Pathologists
College of Chiropodists
College of Chiropractors
College of Dental Hygienists
Royal College of Dental Surgeons
College of Dental Technologists
College of Dietitians
College of Massage Therapists
College of Medical Laboratory Technologists
College of Medical Radiation Technologists
College of Nurses
College of Occupational Therapists
College of Opticians
College of Optometrists
College of Pharmacists
College of Physicians and Surgeons
College of Physiotherapists
College of Psychologists
College of Respiratory Therapists
College of Denturists
College of Midwives

I’m sure other provinces and states have similar lists of regulatory bodies, many of them statutorily created or empowered. Now here’s a list of all the governing and/or regulatory bodies for legal services providers in Ontario:

Law Society of Upper Canada

If you were a member of the public, mightn’t you conclude from this comparison that while health-care services are diverse and specialized, legal services are one big amorphous blob? Dentists don’t govern psychologists and pharmacists don’t decide who’s fit to provide massage therapy, but apparently, a lawyer is a lawyer is a lawyer. Continue Reading