The Law Society and Solicitors Regulation Authority (SRA) yesterday drew the battle lines that will define the argument over independent regulation of the legal profession.
The question was not whether the regulatory arms of bodies such as the Law Society, Bar Council and Chartered Institute of Legal Executives should be independent – which the government said last year they should be – but what functions they would have under a new settlement.
In an article in the society’s journal entitled The end of our profession?, chief executive Catherine Dixon outlined Chancery Lane’s belief that it should set professional standards, and award the title of ‘solicitor’, so as to ensure that the profession had “ownership” of them.
She also called for the title of ‘lawyer’ to be legally protected as part of levelling the playing field with unregulated legal services providers.
An independent SRA, she continued, should form part of a single regulator combining all the other legal regulatory bodies so as to avoid having 11 separate organisations. This single regulator “could set the minimum regulatory standards (but not professional standards) for all legal services, so that consumers are protected, competition is fair and market confidence is assured”.
Ms Dixon said: “This is not about protectionism but rather consistent, better and simple regulation; fair competition; consumer protection; and protection of the solicitor brand and of England and Wales as the jurisdiction of choice.”
SRA chief executive Paul Philip hit back, saying that “independent regulation also means setting the high professional standards of competence and conduct that are so fundamental to public protection. Setting standards, training and entry are a key part of modern professional regulation in the public interest, supporting trust in the profession itself and ensuring that the public and business – at home and internationally – are well served by a credible, growing and innovative legal market”.
Mr Philip said it was “disappointing that the Law Society seem to want to unpick the Clementi settlement, rewind the clock, and go back to the old-fashioned self-regulation that existed in the legal sector until 10 years ago.
“And yet surely bringing the legal sector in line with other high stakes professions is long overdue? For example, looking at the health sector, the British Medical Association, a highly effective representative body, has been around since 1832 and the General Medical Council since 1858.”
The society suggested that the SRA’s form of independence would make it a “state-controlled body” accountable to the Lord Chancellor to the detriment on the reputation of the profession worldwide.
Ms Dixon wrote: “Much of the damage arising from the diminution of our brand will become apparent when fewer foreign students seek to qualify here. If fewer foreign lawyers obtain a second internationally recognised qualification in the UK, that would result in fewer cross-border contracts being drawn under the law of England and Wales and in our law being less frequently chosen for cross-border dispute resolution.
“We are not aware of any mature jurisdiction in the world where both the legal profession is regulated by, and legal professional title is granted by, either the state or by a state-controlled body.
“Such an arrangement would also make it less likely that foreign bars would recognise the solicitor qualification internationally, placing us at competitive disadvantage. It is entirely possible, perhaps even likely, that cross border firms would downsize their activities in London and move resources overseas, which would in turn damage the economy and reduce employment in the sector.”
Mr Philip said that “no one is advocating state regulation”. He added: “I am clear that independent regulation means independent from both the profession and from government. Our view is that accountability should be to Parliament, ideally through a select committee.”
Prior to the Legal Services Act 2007 and creation of the SRA, any changes the Law Society wanted to make to professional rules and training standards had to be approved by the Lord Chancellor.
As reported separately on Legal Futures, Ms Dixon also rowed back on the society’s prior support for non-degree routes to qualification, such as apprenticeships, accusing the SRA of a change which had the potential to damage both the profession and the country’s reputations.
Mr Philip responded: “Let’s be clear – an open, competitive market is very much in the public interest. It is perhaps both inevitable and understandable that some existing solicitors, firms and the representative body find that worrying.
“The long-term future of our legal sector and the professionals that work within it, in what is now a global legal economy, depends on looking forward, on change, on innovation, on quality and on healthy competition. Trying to close down the market by trying to constrain entry and title and revert to long-gone ‘good old days’ is not realistic. It does not serve the UK economy, the public or the long-term future of solicitors’ firms in this country.
“Public confidence, public protection and opening up the market in the wider public interest are my priorities, and that is why we are focusing on independence. There is a separate future discussion to be had on how the regulators are configured in what is a dynamic and fast-changing sector.
“The Competition and Markets Authority is undertaking a review of the legal market. They are due to report at the end of the year and their insight into an increasingly complex market will be very timely. Any debate about a single regulator is really about efficiencies, rather than public protection, and the right time and place to look at that is after the CMA work is completed. Drawing that discussion forward is a distraction which muddies the independence discussion.”
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