Review of the year 2003: Regulating the legal profession

This was the year when Mario Monti got tough. The European Competition Commissioner had already announced plans to radically reform European Community (EC) merger control at the end of 2002, and the new EC Merger Regulation rules were introduced a year later. In October 2003, however, The Lawyer senior reporter Naomi Rovnick revealed that Monti was also planning an inquiry into anticompetitiveness in law firms. This followed a controversial report by the Institute for Advanced Studies in Vienna, which attempted to measure the level of regulation among Europe’s professions.

Monti was setting out to determine whether the rules insisted upon by some of Europe’s regulators, including those on price regulation and advertising restrictions, were anticompetitive. His plan included an examination of the rules across most of Europe which ban multidisciplinary partnerships.

Rovnick revealed that the concern in Brussels was that price regulation in certain countries “could be forcing law firms to function as cartels, even though they are not price-fixing in a covert manner”. Those countries include Germany, where lawyers are theoretically required to charge uniform fees on cases and
transactions, dependant on the size of the job.

The relatively open and unrestricted Law Society of England and Wales “probably doesn’t have much to be concerned about”, commented Herbert Smith Brussels managing partner and competition expert Stephen Kinsella. However, The Lawyer contributing editor Jon Robins, writing on 20 October, pointed his finger at those countries that had good reason to be alarmed. Reporting on the Vienna report, which aimed to measure the degree of regulation to, as Robins put it, “the nearest decimal point”, Greece emerged as the most over-regulated legal profession on the Continent and Finland the least. The article also highlighted the “serious problems” the Council of Bars and Law Societies of the European Union (CCBE) had with the Vienna research. “Our own conclusion was that it is not a study on which to found serious policy decisions,” claimed CCBE secretary-general Jonathan Goldsmith.