WAS THE METHODOLOGY FLAWED?
26 March 2001
19 April 2013
17 November 2013
22 July 2013
18 April 2013
10 January 2014
In much of the press coverage surrounding the Office of Fair Trading (OFT) investigation, the report itself was often presented as the opening salvo in an attack on the fat cats that, in the words of a Government source, inhabit the "cosy, insulated world" of the professions.
So if this is war, what do the lawyers have to fear? "I don't think there's anything [to fear]," replies Jonathan Tatten, a partner at Denton Wilde Sapte. He believes that the assault is mainly aimed "rather unfairly" at a small number of high-earning QCs and the "alleged" high earnings of the magic circle firms. "Firms such as ours can only benefit from more competition because we don't make any money out of any closed shop areas," Tatten says. "The more competition the better."
His main concern is the relaxation of the rules on multidisciplinary partnerships (MDPs), but he believes that even the OFT endorsement is hardly likely to precipitate a revolution in the world of law. "I don't think if you open the door a foot there's going to be a stampede," he says. "There are so many other issues other than regulatory ones that will make MDPs a slow process."
Tatten believes that other recommendations, such as the relaxation of legal professional privilege and scrapping fee guidance, are of marginal interest. "Otherwise, the report is really attacking the bar," he says. "And the more the bar is attacked the happier I feel." Certainly, the comfort with which solicitors have greeted the recommendations contrast with the anger felt at the bar.
In an article for The Lawyer, the Bar Council furiously denounced the OFT's work as "glib". So what exactly is wrong with the watchdog's work? According to a Bar Council spokesman, the report adds up to little more than "a house built on sand". He says that while some of the work might be interesting, the foundations are not there.
The Bar Council believes that the methodology of consultants LECG, whose research forms the basis of the OFT's conclusions, was far from rigorous. The spokesman says: "Overall, they themselves concede that the basis of the research is not in-depth, and crucially they haven't examined the public interest." Among the Bar Council's concerns are the fact that only 23 interviewees were listed in the report, that no "primary research" was conducted and that the professional bodies were only given one week to respond. He believes that if this report is to sweep away 700 years of professional rules in a year, as one press report suggested, a week to comment "seems a little hasty at best".
Andrew Walker, senior partner at City firm Lovells, also has doubts about the quality of analysis. "You only have to read it to see that you aren't steamrollered by the weight of the evidence," he says. Walker is an MDP sceptic and hopes that all views are considered before the ban is lifted. Only one City law firm, CMS Cameron McKenna, is named in the annex detailing the interviewees, and the report claims that many were speaking in a personal capacity. Walker believes that the pro-MDP argument made by the OFT is really just an assertion that the current restrictions inhibit competition. In the end, he believes that the watchdog hedges its own argument by concluding that professional rules, relating to privilege and conflict of interest, must be addressed without actually considering the rules. "I'm not sure this report takes the debate any further," he says.
However, Tatten argues that these are issues that have been debated so many times in the past that there was no reason for the OFT to repeat the exercise. His view is that the report is "indicative of a policy statement" rather than an analysis of the facts. "I don't think it's glib, but that's possibly because I personally welcome it," he says. "In any case, lawyers always have a tendency to micro-analyse themselves. If they're being attacked anything will be glib."
Walker defends the substantial salaries that any lawyers receive. "Every night of the week you'll find people working right through the night. It's not surprising that to persuade people to work that way the rewards have to be at a reasonably high level." He says that the legal market is fiercely competitive and that there is nothing to force a client to instruct any particular firm.
Tatten agrees, saying that there has been nothing "cosy" about the legal profession for at least a decade and that the market has become progressively liberalised and increasingly competitive during that period. "I still think the clients call the tune and, certainly in the commercial world, we dance to that tune," he says. "And that's why I don't think that the OFT report will ultimately make a huge difference."