Legal Services Board releases options on ongoing competence

The Legal Services Board (LSB) has published anew report on ongoing competence in the legal services sector. Confirming that it plans to develop this thinking further and consult on how competence can be assured over the course of a lawyer’s career. In the report the LSB points out that whilst legal regulators have comprehensive measures on entry into the profession, however there are few checks to ensure that competence is maintained.

The report was produced following the call for evidence that was carried out in 2020. It has been compiled using extensive discussions with stakeholders across and outside the legal services sector. It also considers approaches taken in other sectors such as financial services, aviation, healthcare, engineering and teaching, which generally have more systematic ongoing competence checks.

From its research, the LSB has concluded that most consumers mistakenly assume that lawyers are subject to regular formal checks. It has suggested that this leads to a misalignment between the current practice and what the public expects. This is why the decision has been made that ensuring legal professionals’ ongoing competence is vital to ensuring consumers’ trust and confidence in the sector. The LSB’s view is that this would also help consumers avoid harm from poor quality legal services.

In its role as the oversight regulator, the LSB has a statutory duty to assist in developing regulatory standards in the legal sector. In the report, the LSB explains that it will proceed to develop and consult on new expectations for regulators, noting that these proposals are likely to encompass high-level expectations that legal regulators should:

  • set out the standards of competence that legal professionals should meet at the point of entry and throughout their careers; and
  • have mechanisms in place to:
    • identify legal professionals who are failing to meet those standards;
    • identify areas of increased risk to consumers;
    • respond when legal professionals fall short of the standards of competence;
    • provide appropriate protection when there is an increased risk of harm to consumers.

Helen Phillips, Chair of the Legal Services Sector, said:

‘Public trust and confidence are integral to the credibility of the legal services sector, and consumers need to know that their lawyers have the necessary, up-to-date skills, knowledge and attributes to help them with their legal problems. Many people assume that legal professionals are subject to ongoing formal reviews of their competence, but there are, in fact, very few routine checks once a lawyer has qualified. Legal regulators typically do not have systems or processes in place to identify or respond to concerns about competence. This is unusual and out of step with other professions which routinely adopt tools to ensure ongoing competence to promote public trust and confidence, and protect consumers from harm. We need to reshape legal services to better meet the needs of society, which includes ensuring lawyers remain competent throughout their careers. This will help increase trust in legal services, raise standards and improve access to justice.’

Read the full report here, or the LSBs comments here.

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UK Competition and Markets Authority review of legal services market

The UK Competition and Markets Authority has released an updated report based on its initial findings on the legal services market published in 2016. The report recognises the improvements that have been made in increasing the transparency of the price, service and quality of legal services, but said there was more to do to increase “the intensity of competition between providers”, calling for reforms particularly in the currently unregulated sector of the market.

The unregulated sector has grown significantly over the past few years, largely due to the rising use of legal technology products. The report raises concerns over the current regulatory framework and the focus on professional titles and reserved activities, as opposed to the risk profile of activities. Which it suggests could restrict competition, create unnecessary costs and leave a regulatory gap.

The CMA has recommended three actions within the existing regime which would help “deliver reform in stages”.

  • First was creating a mandatory public register of unauthorised providers for certain legal services and mandating that they offer redress options to consumers.
  • Second was that the Legal Services Board (LSB) should carry out a review of the reserved activities.
  • Third was the independence of regulation from professional representation. The CMA noted that “significant improvements” have been made as a result of revised internal governance rules imposed on bodies like the Law Society and Bar Council by the LSB.

Andrea Coscelli, the CMA’s chief executive, said: “This is an incredibly important sector that people often turn to at a time of great need, which is why the CMA made recommendations to improve consumer outcomes, including through increasing transparency, as well as to address concerns about the way in which the sector is regulated. It is positive to see changes that have already been made, but more progress is needed. We encourage the Ministry of Justice, the Legal Services Board and other legal services regulators to continue to work towards reform and to make sure the sector works well for consumers long into the future.”

Read the full review here or the LSB’s response here.

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Netherlands and Denmark both considering changes to non-lawyer ownership rules

Both the Netherlands and Denmark have made announcements signalling a move towards implementing non-lawyer ownership.

The Netherlands Bar Association (NOvA) has announced a 5-year experiment, which would allow lawyers in the non-lawyer run SRK legal aid organisation to deliver non-legal services. NOvA has said that the move is coming as part of a broader investigation into a possible ‘new system of regulations regarding permitted corporate structures for lawyers’. The sandbox-style experiment is capped at 5 years per organisation, with NOvA saying that other organisations are welcome to apply.

The move does not come out of the blue. The Dutch competition authority (ACM) had been putting pressure on NOvA to amend rules in order to improve market conditions.

In related news the Danish Competition Council has released a report analyzing competition in the legal profession. The report has found that the industry had a turnover of NOK 14.7 billion in 2018 and just over 1,800 firms. It also discovered that almost 70% of the turnover in the industry was generated by corporate clients, with only 11% being consumer work.

Based on this the Competition Council has presented 16 recommendations that can strengthen competition in legal services, providing improved access to justice. Amongst these recommendations is the inclusion of new business models, in the legal sector.

Read more about the Dutch changes here, or the Danish changes here. 

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California Closing the Justice Gap Working Group holds first public meeting

A California State Bar working group established to study access to justice innovations held its first public meeting on the 14th January 2021. The State Bar’s Closing the Justice Gap Working Group, created by the Board of Trustees to carry on with important recommendations from the State Bar’s Task Force on Access Through Innovation of Legal Services (ATILS), has been established with the objective of:

  • Investigating the development of a regulatory sandbox to foster experimentation with innovative systems for delivery of legal services
  • Exploring amendments to the Rules of Professional Conduct regarding the ability of lawyers to share fees with nonlawyers
  • Examining the addition of rule 5.7 to the Rules of Professional Conduct addressing the delivery of nonlegal services by lawyers and businesses owned or affiliated with lawyers
  • Considering amendments to the Certified Lawyer Referral Service statutes and Rules of the State Bar to enhance efforts to expand access to legal services.

The task force chair Justice Alison M. Tucher, Associate Justice of the California Court of Appeal, First Appellate District, Division 4, in San Francisco has said “The immense challenges of the past year have only heightened the needs that this group’s work is intended to address. Fortunately, meeting virtually enables us to bring together a truly remarkable working group, all of whom are volunteering their expertise to help California move forward. We are honored and excited to get started.”

The working group is made up of 20 state, national, and international experts an is expected to submit recommendations to the Board of Trustees no later than September 2022. Each recommendation is expected to balance the dual goals of public protection and increased access to justice.

Read more about the meeting here. 

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Entity Regulation, Litigation Rights and the Changing Meaning of Professionalism at the Bar of England and Wales

Abstract

Entity Regulation, Litigation Rights and the Changing Meaning of Professionalism at the Bar of England and Wales The Legal Services Act 2007 provided a framework for a liberalised marketplace for legal services. The most significant responses to this by the Bar appear in the Bar Standards Board Handbook, which was first released in January 2014. This included changes allowing for barristers to engage in litigation and enabling the Bar Standards Board to regulate entities rather than just individual barristers. This article places these changes within the existing theoretical understanding of the legal professions and professionalism, and argues that they open the door for a significant shift in the way that the discourse of professionalism is used in relation to the Bar.

Mason, Marc, Entity Regulation, Litigation Rights and the Changing Meaning of Professionalism at the Bar of England and Wales (2020). Legal Ethics, Forthcoming,

Read the full article on SSRN. 

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Irish Legal Services Regulatory Authority to take over regulation of legal advertising

On the 18th December 2020 the Irish Legal Services Regulatory Authority (LSRA) took over the role or regulating advertising by legal practitioners, a role previously held by the Law Society (for solicitors). The rule change comes about under the Legal Services Regulation Act 2015 (Advertising) Regulations 2020, which applies to print, audio, visual and online advertising.

The regulations apply to solicitors, firms of solicitors and barristers as well as limited liability partnerships (LLPs) who advertise their legal services, and to groups of legal practitioners, who share a facility, premises or cost of practice, who advertise themselves as a group.

The regulations, which allow the advertisement of legal services, currently largely reinforce prohibitions that were already in place, as well as creating new content restrictions.

Prohibitions include:

  • Using phrases such as ‘no win no fee’ in advertisements which refer to personal injury work.
  • Advertisements which include possible damages for personal injury claims that are not based on the Book of Quantum produced by the Personal Injuries Assessment Board or guidelines by another statutory body.
  • Advertising in inappropriate locations.
  • Advertising referring to a practitioners ‘success rate’.

Advertisements must also make clear who they are published by.

Consumers will be free to notify the LSRA of any breach of the regulations. The LSRA may then carry out investigations based on this, or carry out investigations of their own volition.

  • The LSRA may decide that a particular advertisement contravenes the regulations or the Legal Services Regulation Act 2015.
    If so, the LSRA will give the legal practitioner time to restrict the publication of the advertisement or take other steps it directs.
    The LSRA can apply to the High Court for an order prohibiting a legal practitioner from contravening the regulations.

Read the LSRA’s press release on the changes here, or the updated statutory instruments here.

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Regulatory developments in Ireland

On the 19th November, The Legal Services Regulatory Authority (LSRA) published two separate reports with recommendations to the Minister for Justice.

The first report is entitled, “Setting Standards: Legal Practitioner Education and Training“. The report is focused on examining the competence and standards required to practise as either a Solicitor or a Barrister in Ireland. The report contains two central recommendations:
1. A clear definition of the competence and standards required to practise as a solicitor or barrister should be developed;
2. The introduction of a statutory framework to establish a new and independent Legal Practitioner Education and Training Committee, which would be statutorily required and empowered to set the competency framework for legal practitioner education and training; develop a common set of competencies and standards for admission to professional legal training, and ensure that existing providers of legal education and training adhere to the standards required by the competency framework on an ongoing basis.

The second report is entitled, “Greater than the Sum of Its Parts? Consideration of Unification of the Solicitors’ Profession and Barristers’ Profession“. The report examines the case for the unification of the profession in Ireland, putting the question out for comment to the public. However, the Authority has concluded that at this stage in its regulatory timeline it would be premature to recommend that the two branches of the profession be unified. The Authority undertakes in the report to return to the matter within five years when it anticipates that the landscape for legal services providers will have evolved sufficiently for it to reconsider the question of unification as posed in the Act. This is due to upcoming changes including the introduction of relaxed rules around legal partnerships between barristers and other barristers or solicitors, as well as further consideration around multi-disciplinary practices.

These reports fulfil the LSRA’s statutory mandate to ensure the maintenance and improvement of standards in the provision of legal services by legal practitioners. Both reports have been submitted to the Minister, as required under section 34 of the Legal Services Regulation Act 2015.

The LSRA’s press release on the two reports is available here. (PDF)

 

 

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Law Society of British Columbia to Widen Access to Legal Services

On September the 10th the Law Society of British Columbia elected to make changes suggested by a task force on modernisation established this January.

The task force cited ongoing changes in the legal market, which have been accelerated by the ongoing COVID-19 pandemic, as well as the pace of change in other jurisdictions, as to why change was needed.

Recommendations include:

  • evaluate how existing and emerging technologies can better support legal services and address regulatory impediments that exist in permitting their use
  • move to amend regulatory structures to allow for innovation in legal service delivery and alternative business structures while protecting the public
  • re-evaluate current regulations and restrictions on law firm ownership and investment, as well as multi-disciplinary practice and partnership structures to ensure they are not inhibiting innovation
  • advance its initiative on the regulation of licensed paralegals to improve access to legal services
  • regularly reach out to and develop resources to support in-house counsel and government lawyers
  • continue work on Indigenous legal services by understanding where more support is needed and listen to and work with Indigenous peoples to address that need
  • re-consider the accreditation process for lawyers in British Columbia, with special consideration given to how to incorporate more skills-based training into that process

The task force was set up with the following mandate: “Recognizing that significant change in the legal profession and the delivery of legal services is expected over the next five to 10 years, the Futures Task Force will identify the anticipated changes, consider and evaluate the factors and forces driving those changes, assess the impact on the delivery of legal services to the public, by the profession and on the future regulation of the legal profession in British Columbia, and make recommendations to the Benchers on the implications of the anticipated changes and how the Law Society and the profession might respond to the anticipated changes.”

And began the recommendations by saying: “Change is constant in all aspects of our lives, and this is true in the practice of law as well. Client expectations, competition among lawyers and with other professionals, technology, generational expectations, and societal norms all affect what lawyers do and how they carry out their practice in important ways. Society’s expectations of what lawyers do and how they should do it also change. How lawyers keep up with these changes is very important for the availability of efficient and affordable legal services and for the confidence that the public has in the legal profession as a whole, and equally important for the sustainability of their practices and their personal well-being. A legal profession that is incapable of achieving outcomes that resonate with what society expects is one in which the public will eventually lose confidence. ”

Read the full recommendations here (PDF). 

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Law Society of Saskatchewan Makes COVID-19 Rule Changes Permanent

The Law Society of Saskatechewan has announced that the Government of Saskatchewan has repealed emergency regulations surrounding remote execution and witnessing of documents electronically and replaced them with permanent rule changes, which will extend beyond the period of public emergency. The rule changes come about in the light of the increased efficiency and lower cost created by emergency regulations and the use of video witnessing, with the society saying that they are “a significant development in terms of enhancing access to justice in Saskatchewan and will serve to greatly increase the efficiency of many legal processes for lawyers and clients alike.”

The rule changes relate to the remote witnessing of Land Titles, Powers of Attorney and Wills, as well as various other documents.

Read the Law Soceity’s description of the changes, and view the new regulations.

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Arizona to Allow Non-Lawyer Ownership

The Arizona Supreme Court has approved rule changes allowing for non-lawyer ownership of law firms in the state. The rule change comes in the wake of the two-year sandbox announced in Utah, however, the Arizona courts went one step further, opting to make the changes permanent.

The recommendations for the rule change were first proposed by the court’s Task Force on the Delivery of Legal Services, have focused around improving public access to affordable legal services and promoting legal innovation. The changes in state’s rules are set to become effective as of January 1st 2021. The changes include the removal of ER 5.4 the rule barring nonlawyers from fee sharing and barring nonlawyers from having an economic interest in a law firm. As well as this the changes also allowed for the licensing of legal paraprofessionals, as well as changes to lawyer advertising rules.

Arizona Supreme Court Chief Justice Robert Brutinel said of the development, “The Court’s goal is to improve access to justice and to encourage innovation in the delivery of legal services. The work of the task force adopted by the Court will make it possible for more people to access affordable legal services and for more individuals and families to get legal advice and help. These new rules will promote business innovation in providing legal services at affordable prices. I thank and commend the Task Force and its chair, Vice Chief Justice Timmer for their groundbreaking work.

Read the full report from the Arizona Supreme Court. 

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