The Journal of Things We Like (Lots)
Select Page
Nick Robinson, When Lawyers Don’t Get All the Profits: Non-Lawyer Ownership of Legal Services, Access, and Professionalism (Harv. Law Sch. Prog. Legal Prof., Research Paper No. 2014-20)available at SSRN.

To what extent lawyers should control their own profession, determine its rules, and be the arbiters of who should deliver legal services is a question that is increasingly subject to intense scrutiny. More jurisdictions are considering whether to follow the leads of Australia and England and Wales in liberalizing their legal professions. Canada, for example, is one of the most recent.

The American legal profession expresses significant concern about non-lawyer ownership of law firms. Both the American Bar Association and the New York State Bar Association have dealt with the issue and will probably continue so to do.

Although the two are quite separate non-lawyer ownership and unauthorized practice of law are related. Liberalization of legal services markets has led to more non-lawyers undertaking legal work, which in the US would not be permitted. This is contrary to legal practice in England and Wales where virtually all the tasks lawyers do are open to others. What accounts for the difference? It isn’t a matter of style: Gillian Hadfield has argued that over-regulation prevents US lawyers from innovating and expanding their markets.

Robinson alludes to different conceptions of professionalism that underlie the proper conduct of legal practice. ‘American professionalism’ signifies commitment to values of justice and the public interest whereas ‘English professionalism’ seems to be more aligned with business interests. This crude dichotomy is just that and neither conception truly reflects either sides’ interests. For example, in the early 20th century, Julius Henry Cohen, a New York lawyer, wrote a book titled, Law—Business or Profession? In the 1930s Karl Llewellyn was castigating the ‘law factory’ for attracting the best law graduates away from social justice. These arguments have never stopped, but merely resurfaced from time to time.

The 21st century, however, is bringing these arguments to a head as a number of countries have begun to alter their regulatory regimes to allow non-lawyers to own law firms. Robinson’s paper examines three jurisdictions to see if their modifications to regulatory frameworks are having any impacts on access to civil justice and professionalism. He takes England and Wales, Australia, and the US as his case studies. Using a mix of documentary sources and interviews, Robinson compares and contrasts and provides us with an interesting set of case studies.

Perhaps the main lesson drawn from the study is that context matters. The histories, constitutions, and professions are so different that intelligible comparison is difficult but not impossible. Despite this we can theorize about professionalism. To create another dichotomy the professional project can be perceived as a means of creating rent seeking monopolies or creating pools of expertise that contribute to the civilizing function of society. What is clear is that the state plays a key role in determining what forms of regulation professions will bear.

In England and Wales, according to Robinson, the initiative for legal services reform came from the competition authorities. Neo-liberal governments saw markets as ways of promoting competition which would improve consumer access to justice with the benefits of cutting legal aid funding. The Legal Services Act 2007 imposed external regulation on the profession and opened up non-lawyer ownership of law firms. Alternative Business Structures were vehicles that would facilitate different forms of delivery. Robinson notes that of the hundreds of ABS formed most deal with personal injury work and secondly with consumer affairs. He explains the prominence of personal injury work in two ways. First, the work is easily commoditized; it isn’t complex. Second, government outlawed referral fees between insurance companies and law firms and others. As a result consolidation between insurance and law firms took place. Robinson questions whether this gives rise to conflicts of interest. He discusses two companies: Quindell, a publicly traded holding company for personal injury work and Cooperative Legal Services, the legal arm of a supermarket conglomeration. Both are ABS and both have had troubling careers thus far.

Australia, with different regulations, has seen the emergence of the publicly owned law firm and other incorporated legal practices but not the ABS. The most well known is Slater & Gordon, a personal injury firm, which floated in 2007 and has since bought a number of law firms in Australia and the UK. Australia gave rise to the new approach to regulation by emphasising the entity rather than the individual lawyer as well as focusing on principles and outcomes instead of rules.

The third comparator is the United States, which although it has nothing equivalent to the UK or Australia, has other forms that could approximate their experience. Robinson refers to LegalZoom, the online legal services company, which provides company documents and wills amongst others and has established an ABS in England. Interestingly, despite restrictive UPL laws, investment in legal technology startups in the US far exceeds that of anywhere else. His second example is troubling as it concerns companies that represent Social Security Disability claimants, a seemingly vulnerable group. They appear rife with conflicts.

From each country Robinson attempts to discern if the changes have improved access to justice. In each he is disappointed. For him the potential for conflicts and prioritizing profits over social justice are ever present in these new forms of legal enterprise. Yet these are still to be tested. While this is a critical question in the light of declining legal aid budgets, it is also nothing new. Research from 40 years ago in the UK showed that law firms were mostly situated near middle class shopping centres not close to poor housing estates. Access to justice and legal needs have always been contentious. Indeed when legal aid was introduced in the UK at the time of the National Health Service and free education, lawyers opposed it until they realised its commercial potential. The welfare state was not considered an automatic good. Maybe it is too early to say if access to justice will be improved by these new legal business ventures. At present they augment rather than replace conventional lawyers. And their style and approach to legal practice is conservative and narrow. None of the truly multidisciplinary practice has yet come to the fore. The regulatory objective of improving consumer access to law is a continuing process rather than a destination, but it is embedded in the neoliberal economy.

Turning to professionalism Robinson sees challenges. Will commercialism, i.e. the merchandising of law as a commodity as opposed to a public service, and conflicts undermine public trust? Potentially they could, but public trust was already fragile. Besides competition pressures towards opening up legal services, the other pressure was a deep public malaise against lawyers reflected in the high numbers of complaints about their ‘unprofessional’ behaviour. Protectionism and monopoly looked ugly to consumers who wanted a more responsive profession. Perhaps more transparent and accountable legal services providers can achieve this. There is no reason to believe that non-lawyer investors and owners will be less ethical than lawyers. (See Jordan Furlong’s critique of this view.) The reporting and financial accounting processes that companies have to undergo are considerably more transparent than most law firms’ procedures.

There is certainly the possibility of conflicts of interest, as Robinson indicates with Capita, which runs both migrant removal services and legal aid entitlement phone lines, and is buying a law firm. In the US companies that represent social security disability claimants are taking on contracts for the Social Security Administration thereby blurring the lines between advocacy and captive provider. But as the sociologists Terry Johnson and Julia Evetts show, professionalism is not static. It changes according to those who occupy the category and to the environment in which they work. Autonomous professionals are a highly contested category in law firms and other professions. The recent work of, for example, Faulconbridge and Muzio on globalizing law firms and that by Dinovitzer, Gunz and Gunz on corporate lawyers and clients suggest that bureaucracy and managerialism are weakening autonomy and affecting professional values. The arguments are open on this trend but there is a body of work that argues professionals organizations, outside the sphere of the alternative business structure, have mutated away from traditional collegiate partnerships towards more managed professional businesses (P2 to MPB as described by Cooper et al.) We can add Regan’s arguments about the necessity for trusted organizational cultures to inculcate ethics throughout law firms, but even this can be mutated by a firm’s specific approach to practice. Furthermore, the relationship between professional and client is increasingly mediated by third parties—insurance companies, HMOs, the state—which raises many questions about alliances and commitment that we have yet to tackle. But still legal regulators often cling to these outdated modes of professionalism.

Download PDF
Cite as: John Flood, The Relevance of Professionalism in a Post-Legal Services Act World, JOTWELL (December 18, 2014) (reviewing Nick Robinson, When Lawyers Don’t Get All the Profits: Non-Lawyer Ownership of Legal Services, Access, and Professionalism (Harv. Law Sch. Prog. Legal Prof., Research Paper No. 2014-20)available at SSRN), https://legalpro.jotwell.com/the-relevance-of-professionalism-in-a-post-legal-services-act-world/.