Monday, October 01, 2007

Scotland on course to open legal services market before England ?

Some in the legal profession seem to think so, even a few of them who call themselves journalists too ... but the Law Society is still in the game to kill off any idea the legal services market should be opened to all ...

The Scotsman reports :

Scots may get Tesco law before English


SCOTTISH firms could steal a march on their English competitors if they embrace alternative business structures before the Clementi reforms take effect south of the Border, the justice secretary has signalled.

Kenny MacAskill said Scotland would "not blindly follow" the English model, but urged solicitors to quickly grasp the opportunity to develop new ways of working to open up the legal services market.

MacAskill, who delivered the keynote speech at the Law Society of Scotland's conference in Edinburgh on Friday, suggested Scotland could preempt the implementation of proposals in the Legal Services Bill, currently before the UK Parliament.

"I am determined not to see our major Scottish law firms at a competitive disadvantage," he said. "Indeed, if we act quickly, I believe we can get ahead of the game. England is legislating now, but it may be 2011 before new business structures emerge. Rather than spending five years building up to a big bang, it would be perfectly possible for us to test out some new models before the English have completed their wholesale reforms."

The justice secretary said any proposals for new business structures would have to take account of the different needs of the Scottish marketplace and consumers, but stressed the status quo was not an option. "In today's world, we cannot maintain our competitive position by standing still," he said.

And, while he conceded there would be "hard decisions" ahead, MacAskill gave a thinly-veiled warning that an urgent response was now required from the profession. "You do not have the luxury of endless time to decide," he said.

The political willingness not only to introduce but also to accelerate reforms of the Scottish legal services marketplace will now increase pressure on the regulatory bodies, the Law Society of Scotland and the Faculty of Advocates, to come up with a blueprint.

Yet Friday's conference - held in the wake of the Office of Fair Trading's (OFT) recent recommendations following the Which? super-complaint - highlighted the polarisation of views as to whether alternative business structures, such as multi-disciplinary partnerships or third party entry into the market, would benefit or harm consumers.

Much of the debate centred on whether a distinction could or even should be drawn between the individual consumer interest and the wider public interest. Jonathan Goldsmith, of the Conseil des barreaux europeens (CCBE), the European bar association, said the proposals for alternative business structures in England had not reconciled pressure for a free market with the public interest.

"The question is how the legal profession sustains its core values - independence, confidentiality, absence of conflict of interest - with a purely economic argument," he said. "We believe there are over-riding non-economic arguments that clearly speak against alternative business structures."

But Sean Williams, the OFT's executive director for markets and projects, said removing market restrictions could improve consumer choice, drive down costs and even help smaller firms to survive.

And while he stressed the OFT did not want a single regulatory model for the whole of the UK, he warned Scottish firms could be left behind if they failed to adapt to changing market forces.

"We would not want a situation in which there was a competitive disadvantage here," he said. "Hopefully we can be fleet of foot and design solutions appropriate for the needs of this country."

He added: "When we are protecting the interests of the profession in the short term, we need to ensure we aren't sacrificing the interests of the profession in the longer term."

Yet repeated concerns were raised about the impact on the sustainability of smaller firms and access to justice - particularly for 'consumers' of legal services, such as criminal defence, that are publicly funded - and governance issues arising from shared ownership of firms with other professions.

At points in the discussions, more questions appeared to be raised than answered about the practicalities of opening up the market, with many delegates voicing dissatisfaction at responses from panel members representing the consumer lobby.

Janet Hood, who chairs the Law Society of Scotland's in-house lawyers group, asked Julia Clark, principal public affairs officer of Which?, to explain how they would address a potential conflict of interest if banks were to start offering legal services to customers.

"It is not a matter for now, these are matters we can address as we go forward," Ms Clark said.

Valerie Stacey, QC, vice dean of the Faculty of Advocates, cautioned against proceeding with reforms that might adversely affect consumer choice and access to justice without an evidence base.

"We can't tinker with the system," she said. "Once the genie is out of the bottle, we can't get it back. I would rather get into the devil in the detail. Let's be stimulated by people who say we need to change, but let's not do it unless we can say change is for the better."

Yet Douglas Connell, joint senior partner of Turcan Connell, who has already suggested a new model that would allow a third of partners in a firm to be non-solicitors, was frustrated by the slow pace of change.

"The present restrictions are anti-competitive," he said. "The Law Society has had years to think about this. I believe we need to get on with it [and] give the profession flexibility in terms of alternative business structures."

All the views put forward will be taken on board by the council of the Law Society of Scotland, which is drafting a "green paper" style set of options due for publication by the end of October. It is planned that a more detailed set of proposals will go out for public consultation early next year.

Richard Henderson, the new president of the Law Society of Scotland, told delegates the conference had been "immensely useful". He added: "It gives the society considerable material to assess and consider. All the views are valuable and will be greatly appreciated..

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