23 February 2009: Regulation of City Lawyers Needs Urgent Shake-Up
The regulatory structure for corporate law firms in England and Wales needs an overhaul to provide confidence in the sector and to put an end to the current system of piecemeal rules, The College of Law’s Legal Services Policy Institute argues today.
In an effort to stimulate debate, the Institute has published a paper that considers options for the regulation of those law firms that provide services to corporate and commercial clients.
Three options are considered:
- Continuing regulation by the Solicitors Regulation Authority (SRA) with adjustments to rules to apply different regulatory approaches to different types of client
- Establishment of a parallel regulatory regime by the Law Society, either within the SRA or through a parallel regulatory body
- Establishment of an entirely new regulatory body as an approved regulator under the Legal Services Act.
The paper argues that recently enacted legislation creates an opportunity to develop a more flexible regulatory framework focusing on firms serving clients well able to look after themselves. It argues that a new regulatory framework would bring business benefits to law firms and their clients, would sharpen the competitive edge of corporate firms in the global market, and avoid the conflicts and compromises inherent in trying to squeeze very different types of practice, and very different client interests, into a single regulatory structure.
Institute Director, Professor Stephen Mayson commented: “The case for change is powerful. It rests on a recognition that different types of law firm operate in very different markets. Trying to regulate the high street practitioner and the global law firms under one regime produces unhappy compromises that will serve the interests of neither client group. The growth in global legal practice means that tensions are likely to increase rather than decrease. The Legal Services Act provides an opportunity to address those tensions through a new approach to regulation.”
The College has been studying regulatory issues in the profession for some time and publication of the Institute’s paper follows the Law Society’s appointment of Lord Hunt to review the regulation of law firms in general and the appointment of Nicholas Smedley to review the supervision of City practices.
Nigel Savage, Chief Executive of The College of Law, said: “Regulation has increasingly appeared on our radar in recent years and the Institute commissioned this work nearly a year ago as the basis for private discussion with College clients and other stakeholders. Consistent with the objectives of the Institute, the paper seeks to pull together the policy issues. There is too much of a piecemeal approach to regulation at the moment.”
Notes to Editors:
The report was principally researched and written by John Randall, Senior Research Fellow at the Institute, in the spring of 2008 and recently updated for general publication.
About the College
The College of Law is the leading provider of professional legal education and training in Europe with centres in London, Birmingham, Chester, Guildford and York. A new centre will be opening in Manchester in September 2009.
We are widely regarded as experts in legal training – all of our tutors and course designers have practice experience. We work closely with law firms and chambers of all sizes and exclusively deliver the Legal Practice Course (LPC) to trainees at many of the leading global law firms.
We support qualified lawyers throughout the profession with a comprehensive programme of professional development courses and in 2008 we launched our Master’s LL.M programme in professional legal practice.
We also provide the Graduate Diploma in Law (GDL) to give non-law graduates an entry route into the profession and the Bar Vocational Course (BVC) for prospective barristers.
In 2006 the College was the first independent institution to be granted degree awarding powers.
The LSPI was established by The College of Law in November 2006. Its principal objectives are to:
- seek a more efficient and competitive marketplace for legal services, which properly balances the interests of clients, providers and the public;
- contribute to the process of policy formation, and to influence the important policy issues, in the legal services sector and, in doing so, to serve the market and public interest rather than any particular party or sectional interest;
- alert government, regulators, professional bodies, practitioners and other providers, and the wider public, to the implications of these issues; and
- encourage and enable better-informed planning in legal services by law firms and other providers, government, regulators and representative bodies.
Further information from:
Lucy Wray
Press Officer
The College of Law
01483 216072
lucy.wray@lawcol.co.uk
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