Assessing How Lawyers Keep Their Own Houses Clean: Baseline Report on Outcomes-Focused Regulation

A fundamental tenet of lawyer regulation is that professionals should keep their own houses clean. The enactment of the Legal Services Act of 2007 (LSA) in the United Kingdom (UK) marked a significant shift in the approach to regulation of lawyer conduct. In addition to creating a new mechanism for handling consumer complaints, the LSA adopted a new regulatory regime that represented a radical departure from the traditional approach in which regulators prosecute complaints based on alleged rule violations. With the adoption of the LSA, lawyer regulation shifted to outcomes-focused regulation (OFR). OFR focuses on high level principles and outcomes that drive the provision of legal services.1 OFR requires an articulation of indicators to determine whether outcomes have been achieved.

In an effort to evaluate the new regulatory regime and how its effectiveness is being monitored, the Legal Services Board (LSB) in the UK conducted a comprehensive study of the legal services industry and regulation in England and Wales. The results of that study are set forth in a recent publication, Market Impacts of the Legal Services Act of 2007—Baseline Report (Final) 2012, (“Baseline Report”).2

To appreciate the significance and approach to the Baseline Report, one should understand its genesis. The LSB first issued an Interim Report in April 2012. The Interim Report included an Evaluation Framework highlighting seventeen outcomes that the LSB sought to evidence with a series of indicators. Following “robust” feedback, the LSB finalized the report, issued in October 2012. Originally, the outcomes and indicators were to be analyzed considering different “stakeholders.” In the Baseline Report, the LSB abandoned the term “stakeholders,” opting to evaluate outcomes from the following five different “perspectives”:  the sector (profession), the consumer, the public, the market, and the investor. (Baseline Report, Paragraph 1.13, at page 12). With respect to each perspective, the Baseline Report analyzes indicators, using data from various sources, to determine how the legal services market in England and Wales has changed since the adoption of the LSA.  For example, to measure the actual level of quality within the market, the Baseline Report uses proxy indicators of consumer levels of satisfaction and trends in the volume and nature of complaints.  (Baseline Report, Paragraph A.26).  On a go-forward basis, the indicators set forth in the Baseline Report are intended to enable the LSB and the regulatory community “to track how the market changes over time, against the outcomes envisaged by the regulatory objectives in the LSA.” (Baseline Report, Paragraph 1.2, at page 9).

The Baseline Report represents an ambitious examination of the state of legal services in the UK. The discussion is thought-provoking, regardless of whether the reader agrees with the analytical framework, questions posed, and conclusions reached. This review discusses the reasons why the report should be studied.

First, the Baseline Report is an exemplar of how regulators can systematically examine a regulatory regime.  It invites stakeholders to dissect the results and offer suggestions. In this sense, the Baseline Report appeared to be shaped by feedback received from persons outside the LSB. This model of collaboration is one that other regulators should seek to emulate. Such consultation results transparency, buy-in by interested parties, and a better work-product.

Second, the Baseline Report provides a window for learning about various studies and data sets. The report includes 92 Figures (Charts) that distill a great deal of information related to current market conditions and the delivery of legal services. The report is a virtual treasure trove, drawing on numerous studies relating to legal services. The wide range of studies suggests that decision-makers in the UK recognize the importance of using data to inform how they implement initiatives.

Third, the attempt to measure outcomes required serious consideration of indicators to gauge developments in various spheres, including concepts that are somewhat abstract, such as “access to justice” and “independence.” The process of struggling with concepts in an effort to develop indicators for different outcomes created opportunities to flesh out the meanings of concepts and principles.

Fourth, the Baseline Report identifies issues that the legal profession should address, such as diversity of legal service providers. Whether a jurisdiction uses outcomes-focused regulation or a more traditional approach, the Baseline Report underscores the fact that “how we keep score” impacts conduct.

For the reasons described above, the Baseline Report should interest anyone connected to the legal services profession. Most obviously, regulators and legislators around the world should consider the report. The Baseline Report represents a collaborative and informed approach to analyzing the impact of legislative and regulatory changes.

The report should also appeal to practitioners. Data woven into the report should help practitioners better understand the dynamics of law practice, consumer attitudes, and professional choices that they make. For example, the report concisely provides findings of studies dealing with consumer attitudes and decisions to hire lawyers. In developing marketing budgets, practitioners should consult findings referred to in the Baseline Report related to the effectiveness of client development efforts.3

This study, as well as others referred to in the report, should also be read by professors and practitioners who teach classes related to legal ethics and the legal profession. As I was studying the Baseline Report, I noted various study findings that I will integrate into my own teaching. For example, I intend to use a “Response Path” chart drawn from the 2012 Legal Services Benchmarking Survey.4

Finally, the Baseline Report provides valuable insights for scholars and researchers. In particular, empirical researchers can learn from the studies referred to in the Baseline Report. In addition, the report identifies holes in the research and evidence base, suggesting areas that may be explored in a range of empirical projects. Researchers should seriously consider designing projects to help develop the evidence base. Such information will serve to better inform and guide those committed to improving the delivery of legal services. In short, regardless of your position, you will likely find the Baseline Report a great source of information and inspiration.



  1. Solicitors Regulation Authority, Outcomes-Focused Regulation, at http://www.sra.org.uk/freedominpractice/. For an explanation of how OFR is different for the traditional regulatory approach, see SRA: Outcomes-focused regulation at a glance, at  http://www.sra.org.uk/solicitors/freedom-in-practice/OFR/ofr-quick-guide.page#ofr-3 []
  2. https://research.legalservicesboard.org.uk/wp-content/media/Impacts-of-the-LSA-2012-Final-baseline-report.pdf. []
  3. See e.g. Baseline Report, Figure 78 (outlining the proportion of clients that solicitors’ firms obtain from different sources). []
  4. See Baseline Report, Figure 45 (tracking responses to over 9,000 different legal problems). []
 
 
Discussion

3 comments
  1. 1

    Grat post, Susan. Does the report examine how the ‘loser pays approach’ affects access to legal representation?

     
    • 1.1
      On February 17, 2013 at 3:47 am, Richard Moorhead said:

      The report does not cover that. I wrote a review of evidence on costs rules with Peter Hurst which looks at this. It’s on SSRN or I can email it….

       
  2. 2

    The most significant feature of the baseline report is the involvement of the stakeholders in the form of their valuable suggestions. Certainly, feedback from people outside the LSB will make it more genuine as well as a worthy work-product.