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28 November 2013
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Herbert Smith Freehills has selected Aderant Expert as the optimal solution for the newly merged global firm
7 November 2013
At the Law Society Annual Conference in Manchester on Saturday 28 September, this issue was the subject of one of the plenary sessions: 'The Liberalisation of Legal Services - a Profession in Transition.'
It was pleasing to note that the majority of those in attendance were in favour of change. However, there was a vociferous minority against. Their reasoning? Why should the current restrictive practices stay in place? The arguments were well rehearsed and very familiar. They boil down to issues of confidentiality, regulation, conflict of interest with bottom line performance and professional standards.
These arguments do not stand up to examination. The RAC has made its position very clear on how it thinks the profession should be structured. It is interested in reforms to the rules relating to employed solicitors and fee-sharing, but the RAC believes that it is the Solicitors' Incorporated Practice Rules 1988 that need changing. These rules only allow the establishment of an incorporated practice where all the shareholders and directors are solicitors and outlaw the use of brand names.
Relaxing these rules will allow the development of legal services in a manner that satisfies customers' demands. It is widely accepted that at the coalface of private practice the reputation of the profession is at a low ebb. Donns managing partner Hilary Meredith made the point very forcibly in Manchester. It is a "profession in trouble" with a "terrible image". This truth was confirmed by Law Society chief executive Janet Paraskeva in an open letter to the profession on 10 September 2002. She wrote: "During the first six months of 2002, the number of complaints received at the Office for the Supervision of Solicitors increased significantly more than anticipated. I know that you will agree with me that it is essential for the reputation of the profession that the number of complaints about solicitors is brought under control speedily."
The RAC believes consumers would readily turn to a solicitor at a reputable company with which they already had a longstanding relationship. This might be a motoring organisation, a trade union or a building society - whichever, they will know that the incorporated practice structure is much more likely to deliver more choice, better value and a much higher standard of customer service than is available at present.
So what of the objections?
Confidentiality: Solicitors are not the only ones who have to keep information confidential. It is standard practice throughout the customer service industry. The RAC, like every other organisation, is bound by the Data Protection Act. Furthermore, with an incorporated practice, which is a separate legal entity, any professional rules can be easily applied and regulated.
Regulation: This has been the foremost objection. How can the Law Society regulate and, if necessary, shut down an organisation such as the RAC? With an incorporated practice as a separate legal entity the problem disappears. The entire legal entity will be regulated by the Law Society.
Professionalism: The RAC is not, and never has been, in favour of providing legal services through unqualified staff. The professional training and skills that exist within the profession are its strongest asset. It wants to harness that skill base within a different career structure.
Conflict of interest with the bottom line: I am always amazed that an accusation is made against organisations such as the RAC that it is unfit to provide legal services because it wants to run a profitable business. I have yet to be introduced to a partner in private practice who showed no interest in the financial performance of their business or in the stake they would receive at the end of the year. This is an absolute nonsense.
There is no good reason why the anticompetitive restrictions contained in the professional rules should not be lifted. The profession must grasp with both hands the opportunity that the current consultation presents. It is the opportunity to modernise the profession, provide a more secure and rewarding career path and structure, generate investment, rebuild esteem and standing in the public eye, and most importantly provide clients with the standard of service they expect.