The Clementi proposals for regulation of the legal profession have caused uproar among barristers Elliot Lane explains why.
Sir David Clementi's recently-published proposals for the future regulation of the legal profession puts forward three regulatory models:
- Model A suggests a legal services regulator similar in form to the FSA
- Model B sees the regulatory function as part of the daily workings of the profession overseen by the industry's representative bodies
- Model B+ proposes keeping both the regulatory function and the representative function completely separate.
Naturally Clementi's ideas have caused controversy. Some lawyers have backed the radical B+ approach - trying to keep the representative bodies independent of the regulatory function. Others have embraced model B saying separation can lead only to more bureaucracy and confusion.
However, the most vociferous attack, led by the Bar Council, has been levied against Clementi's first proposal.
Reports in the legal press suggest the Bar has become increasingly isolated over its stand against multi-disciplinary partnerships and in particular the idea that high street retailers, associations and insurers can offer legal services.
The Bar argues that this will inevitably lead to the 'Enronisation' of the legal profession. The Bar does not want to be "lumped together" with other lawyers.
Bar Council chair Stephen Irwin told The Lawyer magazine in January that if solicitors were to lose their self-regulatory powers because of their own bad complaints-handling record, it did not necessarily follow that the Bar had to lose its powers "for other people's mistakes".
By contrast the Law Society has welcomed the idea of lifting the ban on solicitors and barristers working with non-lawyers.
Speculation is that the government may mention the move to multi-disciplinary practices in its manifesto for the next general election. Clementi will publish his final report just before Christmas.
Companies such as RAC Legal Services, Capita Legal Services and Tesco Law expect to capture more of the market, but are keen to find a niche.
As Jonathan Gulliford of RAC Legal Services says: "The Bar does a very good job and I can't see how we can improve on its efficiency. There is enough work to go round for all of us."
Coming to the aid of the multi-disciplinary practice
"I want everyone to start thinking RAC Law, not Tesco Law," says RAC head of legal services Jonathan Gulliford. "We have been offering our services for much longer. We got there first."
Gulliford is "vociferously pleased" with Sir David Clementi's review and can only see the multi-disciplinary environment as healthy. He was actively involved in the review during its consultation period which came to a close last month.
"Both models A and B have pros and cons. But the Bar's strong objection, and I'm speaking as a member, is over the top. I don't know why it is wary of de-regulation. No one is taking its market away. Solicitors can represent clients in court but the Bar does it best."
RAC Legal Services began in 1908 to help, in Gulliford's words, "a group of privileged people who could afford car ownership if they needed legal advice".
It was not until the 1980s, however, when the legal services and legal expenses products were sold through brokers. Then in 1996 Guardian Royal Exchange (GRE) bought RAC Insurance Services.
But after the AXA Insurance takeover of GRE in 1999, RAC was acquired outright by Lex. As such, RAC still has strong ties with AXA and overall underwrites nearly two million legal expenses policies, handling 90,000 claims a year.
"What we want to achieve is real added value for the customer. The ethos is to find an offering that is irresistible. I don't see the 'Enronisation' of the legal profession, because if a group of barristers wants to run a solicitor's practice as a wholly-owned subsidiary, then it can."
He does agree that retailers such as Sainsbury's and Tesco "could commoditise" the legal profession. But says the notion of a high street solicitor is not true.
"People do not walk off the street and look for a solicitor. It is word of mouth or referral that brings new customers. Also behind the high street brand is a warehouse of solicitors or paralegals who work for giant law firms such as Owen Mitchell," he says.
RAC Legal Services has panel of 24 law firms both national and regional.
Gulliford says that though the in-house team of 150 is being strengthened, he has no plans to cut the panel.
"It is always good to have that support system," he added.
Gulliford says the overall battle will be branding and believes a white-labelling model could work for the RAC.
"Customers will go to a brand they trust. Tesco has a problem, if it were to say, take on divorce cases. What if the husband and wife are both Tesco customers? Do you want to alienate one party?
"On motor accident and personal injury cases, we can process claims very quickly and because of our brand name on the road, we can win the trust of the customer."
