Martin Partington: Spotlight on the Justice System

Keeping the English Legal System under review

Posts Tagged ‘solicitors’

‘Looking to the future’ – proposals for regulatory changes from the Solicitors’ Regulation Authority

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In June 2018, the Solicitors Regulation Authority published its Looking to the Future reforms which include a range of changes to how it regulates solicitors. In outline, they are

Shorter, simpler rules and standards

  • A shorter, more accessible Handbook – focussing on the behaviours and principles that support high professional standards.
  • A separate Code of conduct for solicitors and one for firms.

Greater flexibility for solicitors and firms

  • Opportunities for solicitors to provide ‘reserved legal activities’ on a freelance basis, in certain circumstances. They will need to have at least three years’ experience, appropriate indemnity insurance, and will not be able to hold client money.
  • Opportunities for solicitors to do non-reserved legal work in a business not regulated by us or another legal services regulator. They will be bound by our solicitors’ Code.
  • In both instances, solicitors will need to be clear with prospective clients about the protections they bring.
  • Our new, simpler rules will also give firms greater flexibility to make decisions about how they work, helping to make doing business easier.

Simpler Accounts Rules more focused on keeping client money safe

  • Less prescriptive Accounts Rules which focus less on technicalities, and more on issues directly linked to keeping client money safe.
  • Providing a definition of ‘client money’ which maximises the need to protect the public while not placing unnecessary burdens on firms.

Improving clarity on when we take action

  • Our new enforcement strategy will provide greater clarity for the public and profession about when and how we would – or would not – take action against a solicitor or law firm.
  • It will also help us focus on the most serious matters.

Better information on price

  • All regulated firms will need to publish price information for the public and small businesses for seven types of legal services.
  • This includes conveyancing, employment tribunals and probate.

Better information about protections

  • SRA-regulated firms will be expected to display an SRA digital badge on their websites, which will provide a direct link to information on the protections their regulated status gives customers.
  • A modern digital register that will help people more easily find core information about who we regulate.

The proposals are currently with the Legal Services Board. The SRA hopes that the proposals on the publication of price information will come into effect in the autumn of 2018; the rest during 2019. They are at least in part a response to the Competition and Markets Authority Report on competition in legal services published at the end of 2016.

One of the most interesting proposals is that solicitors should be able to work in contexts other than solicitors’ offices, which may create opportunities for the development of new types of legal service work.

For further information see https://www.sra.org.uk/sra/policy/future/looking-future-reforms-summary.page from which this entry has been adapted.

 

 

 

 

 

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Written by lwtmp

October 14, 2018 at 2:47 pm

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How diverse are law firms?

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One of the challenges facing the legal profession is trying to ensure that it offers opportunity to all. For the last four years, the Solicitors’ Regulation Authority has conducted surveys which seek to measure diversity in law firms. The most recent report was published in February 2018. While data for any one survey year may not reveal very much, the creation of comparable datasets over a period of years can reveal trends.

The survey looks at a number of characteristics to assess the extent to which law firms offer diversity in employment. This note reproduces and highlights some of the primary factors identified in the survey.

  1. Gender

Women make up 48% of all lawyers in law firms compared with 47% on the overall UK workforce.

Looking at seniority, in 2017 women make up 59% of non-partner solicitors compared to just 33% of partners (though this is up from 31% in 2014).

In the largest firms (50 plus partners) 29% of partners are female. The proportion of female partners has risen steadily from 25% in 2014 to 29% in 2017.

There is a greater proportion of female lawyers in mid-size firms – women make up 54% of all lawyers in firms with six to nine partners and those with 10 to 50 partners. The highest proportion of female solicitors is in firms which have six to nine partners. In these firms, two thirds (66%) of solicitors are female and this has grown over the past four years (from 60% in 2014). Over a third of the partners in these mid-size firms are female (37%) and this has also grown from 31% in 2014.

There are variations by the type of legal work undertaken by firms. While overall women make up 48% of all lawyers, 52% of lawyers in firms mainly doing private client work are female, whereas 40% of lawyer in firms mainly doing criminal work are female.

  1. Ethnicity

There has been an increase in the proportion of black, Asian and minority ethnic (BAME) lawyers working in law firms, now one in five lawyers. This is up 6%, from 14% in 2014 to 21% in 2017.

This increase is largely due to the rise in Asian lawyers in the profession, up from 9% in 2014 to 14% in 2017. Asian lawyers make up two thirds of all BAME lawyers.

Black lawyers make up 3%, which has risen by 1% since 2014 and now reflects those in employment in the UK (3%).

Unlike the profile for women, there is very little difference by seniority among BAME lawyers, 21% of solicitors are BAME compared to 20% of partners.

However, differences become apparent when the breakdown of partners in firms by size is considered. The largest firms (50 plus partners) have the lowest proportion of BAME partners – only 8% which has risen by 1% since 2014. This contrasts with one partner firms, where just over a third (34%) of partners are from a BAME background.

There are differences in the proportion of BAME lawyers according to the type of legal work undertaken by firms. Firms mainly doing criminal work and those mainly doing private client work both have a higher proportion of BAME lawyers, 33 and 37% respectively. Firms doing a mixed range of work and firms doing mainly corporate work both have the lowest proportion of BAME lawyers, 12 and 19% respectively. 

  1. Social Mobility

The survey used attendance at a fee paying school and whether someone was the first in their generation to attend university, as a proxy for social mobility in this survey.

  • Attendance at fee paying schools

There is a significant gap between lawyers and the general population. 22% of all lawyers attended fee paying schools, compared with 7% in the general population. There has been no change since 2015, though the proportion of lawyers attending fee paying school fell by 4% between 2014 and 2015.

There is a difference between partners (24%) and solicitors (20%) who went to fee paying schools. The proportion of partners from fee paying schools in the largest firms (with 50 plus partners) has fallen from 43% to 36% since 2014

The firms which mainly do corporate law have the lowest proportion of state educated solicitors at 56%. Three quarters of solicitors in firms doing mainly criminal and litigation work are state educated (77 and 76% respectively) compared to just over half in corporate firms (56%).

  •  First generation in the family to attend university

In contrast, there is a higher proportion of partners who were the first generation in their family to attend university (59%), compared to 49% of solicitors.

The proportion of partners who were the first generation to attend university is highest within the smallest firms and this decreases with size of firm. This ranges from 63% of partners in one partner firms, to 52% in firms with 50 plus partners.

Only 5% of lawyers did not attend university at all. This has fallen since 2014, when 7% did not attend university.

The principal conclusion to be drawn from these data is that while some increase in diversity can be seen, the legal profession can and should still do more.

Full details of the survey and its findings are at https://www.sra.org.uk/sra/equality-diversity/key-findings/law-firms-2017.page#

Written by lwtmp

March 3, 2018 at 12:41 pm

Posted in Chapter 9

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Competition and Market Authority Interim Report

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On 24 January 2016 I noted here that the Competition and Market Authority was going to undertake a new survey of the Legal Services Market to see whether it was working as effectively as it should to deliver innovative, quality and cost-effective services, especially to individuals and small businesses. They promised an interim report on July 2016.

Well, the CMA has been as good as its word and an initial, interim report has just been published. This triggers a further period of consultation with a final report merging early in 2017.

The ‘nuclear option’ for the CMA is what is known as a full-scale investigation into the market under review. This can take a lot of time and be very disruptive for the industries affected. The Legal Services Market so far seems to have avoided this outcome – which I suspect comes as a considerable relief to practitioners and their representative bodies – the Bar and the Law Society.

But it is far from the case that the CMA has given the Legal Services Market a clean bill of health. On the contrary, it is very critical of the ways in which many legal services are delivered, which have failed to keep pace with developments in other service sectors.

The headline findings are:

  1. the Competition and Markets Authority (CMA) has provisionally found that competition in legal services for individual and small business consumers is not working as well as it might. While there have been some positive developments, such as an increased use of fixed fees for more commoditised services, the CMA has found that upfront information on price and quality is often not available to consumers in order to allow them to compare offers and choose the one that most suits their needs.This is because few service providers (17%) publish their prices online.
  2. It is also difficult for providers to signal quality in this sector and there are a lack of digital comparison tools to make comparisons easier for consumers.As a result only a minority of individual consumers (22% according to our survey) compare providers before choosing one.
  3. This may reduce the incentives for providers of legal services to compete. This lack of competition may mean some providers are able to charge higher prices when substantially cheaper prices are available for comparable services.
  4. The CMA has also considered whether legal services regulation has an adverse effect on competition. Its provisional view is that this regulation does not create significant barriers to entry or distort competition between regulated and unregulated providers of legal services.
  5. However, the CMA thinks that the current regulatory regime does impose significant costs on providers that in some cases may be excessive relative to the benefits in consumer protection. While the CMA welcomes the liberalising steps that have already been taken by regulators to address these issues within the current regulatory framework, the CMA is open to more fundamental change of the regime. However, at this stage it believes that there is a risk that such change might lead to increased regulation and might involve significant transitional costs as well as regulatory uncertainty.
  6. It has noted the complexity of the current regulatory framework with its multiplicity of regulators and questions around regulatory independence. In this context, the CMA notes that the government intends to examine the issue of regulatory independence.

The services covered by the market study include areas such as commercial law, employment law, family law, conveyancing, immigration, wills and probate and personal injury and represent an estimated annual turnover of around £11 to £12 billion. In carrying out its market study so far, the CMA has surveyed individual and small business customers, analysed existing data and research and heard from a wide range of interested parties.

What is clear is that pressures on legal service providers to adopt different and more transparent working practices are still very much in evidence and that failure to take heed of these recommendations could ultimately result in more draconian measures being adopted by regulators.

Further detail about the report can be found at https://www.gov.uk/government/news/cma-seeks-views-on-ways-to-help-legal-services-customers

 

 

 

Written by lwtmp

July 12, 2016 at 2:37 pm

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The Future of the Legal profession – a view from the Law Society

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I argue in my book that change is the key to understanding what is currently happening to the English legal system, and within that the legal profession.

In January 2016 the Law Society published its own challenge to the legal profession, looking at current trends and how they may have developed by 2020.

The press release accompanying publication of The Future of Legal Services states:

Changes to legal services will have an inevitable impact on the solicitor profession. We have identified the key drivers for change in the current landscape of legal services, and attempted to predict how solicitors’ and lawyers’ interests may change in the future, where they will face competition and what opportunities may present themselves in a changing market.

This report presents findings drawn from a range of sources: a literature review, round table discussions and interviews with a range of practitioners across different practice types, firm visit reports, and the outcomes from a series of three futures panels.

The key drivers of change in the legal services market can be clustered into five groups:

  • global and national economic business environments
  • how clients buy legal services (including in-house lawyer buyers, as well as small and medium-sized businesses and the public)
  • technological and process innovation
  • new entrants and types of competition
  • wider political agendas around funding, regulation and the principles of access to justice

It seems inevitable that solicitors and lawyers face a future of change on a varied scale, depending on area of practice and client types. Business as usual is not an option for many, indeed for any, traditional legal service providers. Innovation in services and service delivery will become a key differentiating factor.

Two particular points stood out to me from an initial reading of what the Law Society has to say:

  1. They clearly take the view that the current model for the small ‘high-street’ practice has little future, particular as current practitioners retire. It is not a sustainable model for the future.
  2. The Law Society notes that 25% of practitioners now work as in-house counsel, so the amount of reliance of the corporate sector on firms of solicitors in private practice would seem to be reducing.

At the same time, the Law Society is convinced that imaginative and innovative lawyers will be able to develop new forms of legal service which will both offer them a living and provide a needed service to the public.

The report reinforces the view that students coming new to the study of law will have a lot to keep up with if they are to understand the professional world they may hope to enter in just 5 – 6 years’ time.

To see the report, go to http://www.lawsociety.org.uk/news/stories/future-of-legal-services/

Written by lwtmp

February 2, 2016 at 6:25 pm

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