Regulation and Theory: What Does Reality Have to Do With It?

Christine Parker & Lyn Aitken, The Queensland “Workplace Culture Check”: Learning from Reflection on Ethics Inside Law Firms, 24 Georgetown J. Legal Ethics 399 (2011).

Australia is the home to some of the world’s most interesting and provocative legal profession developments.  For example, Australian jurisdictions were among the first jurisdictions to permit nonlawyer ownership of law firms.  Not long thereafter, the Australian regulatory scheme was amended to permit outside investment in law firms.  As a result, Australia became the site of the world’s first publicly traded law firm.  Australia has been on the forefront of other lawyer regulation developments such as the proactive use of ex ante systems of regulation.

As commentators and jurisdictions elsewhere discuss and debate the proper scope of lawyer regulation, many look to Australia’s experiences in the hopes that they will provide valuable information and lessons.  Those actively following the Australian developments include the American Bar Association (ABA), the UK Legal Services Board, and the Solicitors Regulation Authority (SRA), which is the front-line regulator for solicitors in England and Wales.

Given the path-breaking nature of lawyer regulation in Australia and the global interest in these developments, Professor Christine Parker’s scholarship is particularly important.  Professor Parker’s prior work includes collaborations with academics from other countries and from other fields and with Australian government officials.  For example, one of her most influential lawyer regulation articles was jointly written with Steve Mark and Tahlia Gordon, who are regulators in the New South Wales, Australia Office of the Legal Services Commissioner: Regulating Law Firm Ethics Management: An Empirical Assessment of the Regulation of Incorporated Legal Practices in NSW, 37 J.L. & Soc’y 466 (2010).  This article has been influential because it noted an approximate one-third decrease in the rate of complaints against New South Wales practitioners who practiced in an incorporated legal practices structure and were subject to the New South Wales self-assessment regime for encouraging firms to actually put into practice “appropriate management systems.”

While a number of academics, included U.S. academics Ted Schneyer, David Wilkins, and Elizabeth Chambliss, previously have written about the expected benefits of implementing systems requirements and ethical infrastructure requirements – i.e., systems, – the Parker-Gordon-Mark article was useful because it included empirical research that indicated that proactive ex ante management systems can – in fact and not just in theory – reduce client complaints against lawyers.

Given the synergies that emerged from Professor Parker’s prior collaboration with Australian regulators, I looked forward to reading the Queensland Workplace Culture Check article, which was jointly written by Professor Parker and Lyn Aitken, who is the Policy and Research Coordinator for the Legal Services Commission in Queensland.  I was not disappointed by their collaboration.

In recent years, there has been a significant amount of scholarship that focuses on what has been called the “ethical infrastructure” of law firms.  Scholars have discussed and debated the recommended structure and potential impact of such systems on lawyer and law firm behavior, but there has been limited empirical data.  This article is situated within this broader theoretical debate, but provides a significant contribution to the literature by collecting and analyzing data that considers the operation – in practice – of various firms’ ethical systems.

The article begins by explaining the origins and methodology of the 2009 Workplace Culture Check Survey which the Queensland Legal Services Commissioner asked fifteen law firms to complete.  The article continues by explaining why the survey data allows one to draw reliable inferences about ethical infrastructure issues despite the fact that the survey was designed with a different purpose in mind.  One of the most striking aspects of the data that Aiken and Parker present – or perhaps not so striking to those who have been in law firm environments – was the very different ways in which junior and senior lawyers viewed the ethical infrastructure systems.  For example, there were significant differences in the level of awareness of formal ethical supports and significant differences in their perceptions about whether anyone had been disciplined for unethical conduct within the past five years.  Professor Parker and Ms. Aiken discuss the implications of this data and suggest concrete changes that might support ethical compliance within law firms, such as greater use of instruments such as the Workplace Culture Check to ensure that more junior lawyers are socialized into firms cultures that encourage ethical discussion and action and as a tool for regulators to decide where they might most effectively focus their attention.  Parker and Aiken also used this study and the results that emerged to identify avenues for additional research.

This article is important in several respects.  First, for those interested in lawyer regulation in general and the ethical infrastructure issues in particular, this article provides not only theoretical grounding, but useful empirical data combined with rigorous analysis of that data.  Second, for those who have not traditionally been interested in lawyer regulation issues, this may be the right time to develop such an interest.  Although Australia was the first jurisdiction to have publicly traded law firms and pioneered the use of “appropriate management systems” to create ethical firm infrastructures, it will not be the last such jurisdiction.  Given the number of law firms that have both London and New York offices and U.S. lawyer imputation rules, these English developments are likely to have an even broader impact than the Australian developments.  Indeed, some claim that the 2007 U.K. Legal Services Act and the pending launch of ABS-firms will have the same magnitude of impact as did the UK financial markets’ Big Bang.  Although the Solicitors Regulation Authority had not yet issued any alternative business structure (ABS) licenses at the time this review was written, such licenses are imminent.  Moreover, even the SRA has noted its surprise at the large number of ABS applications it had received.  Blogs and news sources report interest in, or applications from, entities that include a private equity fund, a financial services firm, an insurance company, and the claims handling division of Telecoms giant BT, along with an application from Australia’s leading publicly-traded firm and an application from an affiliate of DLA Piper.  In my view, the UK and Australian developments have fundamentally and permanently changed at least the outward shape of the practice of law. Global developments have a habit of seeping beyond national borders. Thus, in the future, it will be increasingly important for all lawyers and scholars to understand not only the theory but the practice of how one can go about creating an effective ethical infrastructure for lawyers and law firms.

The final lesson to be learned from this article is a reminder of the useful collaboration that can take place between academics and regulators.  In both New South Wales and in Queensland, Professor Parker has persuaded the regulators to collect and share data with the academic community.  The resulting cooperative relationship benefits scholars, regulators, and the public.  It contributes to a better understanding of how regulation works in both theory and practice.  In this respect, the Queensland Workplace Culture Check article is worthy of emulation.


Section Editors’ Note: Regarding emulation, the UK Legal Services Board has instituted an initial study that might lead to similar kinds of intra-firm ethical monitoring and evaluation.

 
 
Discussion

1 comment
  1. 1

    The most striking finding from Parker & Aitken’s analysis is the difference between junior and senior lawyers’ perceptions of ethics supports within firms and perceptions of their own capacity to raise ethical issues (p. 1). Among junior lawyers, only 44% said that they are always “able to raise ethical issues in confidence,” compared to 75% percent of senior lawyers (p. 25). Junior lawyers were also less likely to know where to turn for ethical advice, and to report that their ethical concerns are given consideration in the firm. Among junior lawyers, less than 40% said that their ethical concerns are always given consideration, compared to nearly 80% of senior lawyers (p. 25). Parker & Aitken consider a number of possible explanations for such differences, including the general tendency of lower-level employees to view their organizations less positively than upper-level employees and managers (p. 26). Such differences, however, are nevertheless important for law firm managers to understand. Thus, as part of the survey, the Legal Services Commission debriefed the 15 participating law firms, in an effort to “encourage critical ethical reflection and discussion” (p. 33). Such collaboration promises to significantly improve both law firm regulation and scholarship on profession.