Here's lookin' at you

The Irish Competition Authority is studying various professions, and by the end of 2002, it is expected to have published its overdue report. Solicitors and barristers are among the professions being studied. So will it result in a shake-up of the Irish legal profession?
The background to the study is that the Organisation for Economic Cooperation and Development (OECD) published a report on regulation and competition in Ireland last year. The report found that Ireland was generally competitive and efficient but that there were some deficiencies, mainly in the state sector.
Some observers see it as curious that, in response to these criticisms, the Competition Authority has commenced a study into the professions but failed to address the wider criticisms levelled at the state.
Even more curiously, the study looks at only some professions and does not include, for example, accountants and others who provide services that compete directly with legal practitioners. Indeed, the legal profession probably feels hard done by because the profession had already been assessed in Ireland in 1991. There is a report about the size of the London Telephone Directory to prove it.
However, this new study has an interesting methodology, with a survey of more than 70 questions being sent to various professional bodies seeking very detailed information and incisive views. Irrespective of the outcome of the study, should the replies be published, they will make interesting reading. Some observers have commented on the broad similarities between the methodology used in the Irish study and that used in the UK by the Office of Fair Trading (OFT) in its own assessment of the profession.
Whatever the merits of the Irish Study, it is not clear what it can achieve. The Irish Competition Authority does not have the same legal powers as the UK's OFT or some other bodies internationally. The Irish authority may only study anticompetitive arrangements and abuse of dominance. It may not engage in the wider type of study typical of the OFT. So were the authority to try to emulate the OFT, some of its findings would be easily capable of legal challenge and would therefore conceivably be quashed by the courts.
It would also be extraordinary were the Irish authority to endorse multidisciplinary practices, given the recent Enron controversy and the European Court of Justice's (ECJ) recent ruling the in the Nova case. In the case, the ECJ ruled that the Netherlands – and by precedent other member states – has the right to prevent lawyers from entering into multidisciplinary partnerships (MDPs) with accountants, even though the court admitted that this may restrict competition in legal services. Should the Irish authority endorse them, it would run counter to the growing concern about MDPs internationally.
The Irish authority will probably find that the solicitors profession in Ireland is a very open one. There are no quotas for entry. The number of new entrants has increased by more than 350 per cent over the last five years. Equally, the authority will probably find that clients are very well protected in Ireland because of the involvement of the High Court, which can and does strike solicitors off the roll. There is also a compensation fund that all solicitors pay in to, which compensates clients who suffer from the fraud of a tiny number of solicitors.
However, the authority will probably be struck by the fact that 48 per cent of solicitors' practices in Ireland are sole practitioners and 90 per cent of practices have four or fewer solicitors.
The authority may also find that Irish regulation is out of step with international trends, in that there are no limited liability partnerships for solicitors in Ireland, leaving partners personally liable.
Nevertheless, it may be that the Irish Bar will come in for the most comment, because there are no chambers and relatively few entrants each year compared with the solicitors profession. The outcome will be fascinating.
Vincent Power is a competition partner at A&L Goodbody in Dublin