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:
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.”