a perfect storm? regulationfunding and education in the english legal services market
TRANSCRIPT
A perfect storm? Regulationfunding and education in the English legal services market
Julian Webb
University of Derby
3 February 2015
• Increasingly complex interplay between regulation, funding and the market
• Forces us to re-visit the relationship between access to justice, access to lawyers (and courts) and ‘LSET’
• Steps:– Changes to regulation– Changes to funding– The market– Implications – for LSET and broader legal
system design
Thesis
• Draws in part on original data gathered in the research phase of the Legal Education and Training Review 2011-13
• Mixed methods research– Interviews and focus groups (307
participants)– Online survey (1200+ legal service
providers)– Secondary analysis of LSB consumer
survey data (4,000+ participants)
Research context
• Legal Services Act 2007 (see eg Webb, 2008; Boon, 2010)– Market liberalisation measure – not deregulation per se – Creates regulatory objectives – including enhancing access
to justice. • A function of regulation is thus to ‘facilitate a market that improves
access to justice’ (LSB, 2012)
– Separation of regulatory and representative functions– Oversight regulator (Legal Services Board)– Seven main frontline regulators (professionalisation of
regulation and of para-professions); – New forms of licensed entity/relaxation of ownership rules
(‘ABS’) – Emergence of competition between regulators (eg over
existing ABSs; legal exec law firms, barrister-led entities)
Regulation
• Reserved activities only account for about 20% of activity in the sector
• Regulated entities undertake both regulated and unregulated work – growing sophistication in workforce deployment strategies
• Largest (regulated) firms undertake minimal reserved work
• Growing ‘unregulated’ sector?
Regulated vs ‘unregulated’ services
Use of ‘unregulated’ providers
Mental health
Homelessness
Planning application
Disputes with neighbours
Consumer problem
Domestic violence
Discrimination
Welfare benefits, tax benefits
Debt/money problems
Children
Road traffic accident
Re-mortgaged
Injured at work
Problems with a landlord
Problem with employer
Tenant/squatters
Other problems with property I own
Other personal injury
Home repossessed/faced eviction
Relationship breakdown
Been treated badly by the police
Made a will
Immigration
Clinical negligence
Dealt with estate
Been Arrested
Bought/sold a house
Divorce
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Regulated Unregulated
• Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO)– Further cuts to civil and criminal legal aid rates– Reduction in coverage– Forcing market concentration - fewer contracts– Impact on NfP sector in particular (Byrom, 2013)
• Continuing changes to contingent and conditional fee arrangements
• Proposed increases in court costs• Attempts to limit judicial review
Changes to access/funding
• Increasingly segmented (or differentiated) market• Rapidly and consistently growing regulated
sector until 2010….• IER projections for LETR suggested significant
levels of growth unlikely to be re-established before 2015-2018
• High concentration of legal aid work making firms/chambers more vulnerable
• Uncertainty about scale and scope of paralegal work, but seems to be growing faster than for regulated occupations
Impact on the market
• …there are only certain sets with a particular ideological view that are actually willing to say we’ll take the hit and just do publicly funded work. It’s also a threat to the independence of the bar because sets are increasingly doing anything to get sort of lucrative work.
Barrister
• …there’s certainly going to be fewer trainees in the legal aid subjects …
they will use paralegals where they can which means that in ten, twenty years time the qualified solicitors are not going to be there to do that sort of work.
Solicitor
• The cuts in legal aid will impact particularly in relation to family law costs. I
would guess that is the bread and butter – put potentially a hundred [costs lawyers] who will be in serious difficulty as a result, it may be that they still get work but of less income. They may decide there’s no longer any benefit of me being a costs lawyer …
Costs lawyer
Perceptions of impact
• increased use of legal process outsourcing to reduce back office and some front office costs, including direct labour costs, and to increase efficiency and flexibility of response;
• developing flexible project delivery models, often utilising a mix of in-house and external human resources – eg, where virtual law firms contract-in lawyers purely on a project-based footing rather than as permanent salaried staff;
• decomposing and commoditising legal transactions so that more of the work may be undertaken by non-qualified, paralegal or other professional staff;
• bundling legal services with other complementary services in a multi-disciplinary practice or ‘one-stop-shop’;
• leveraging the opportunities created by multi-professional teams to add value to the offering;
• using technology to enhance communication, information access, data management, and workflow, particularly in conjunction with outsourcing and commoditised practices
• Respondents discussed the competitive advantages of being able to draw on a range of expertise both for the business, and as a ‘one stop shop’ for the client.
Changing structures and processes
• SRA and CLC currently licensed to authorise and regulate ABSs;
• 300+ ABSs authorised so far
• Diversity: no typical ABS
• But some potential game changers
The ‘ABS’ phenomenon (or not?)
• ‘Concerns about new practices often ignore the benefits that new service providers could bring. These benefits are not only that they can bring about lower costs... they may be able to offer consumers better access to other types of legal services’
Clementi Report (2004)
• 0ver 48% of LETR survey respondents saw ABSs as a threat to maintaining professional competence
• Idea of ABSs inextricably linked to commoditisation:
Most of my work now involves people instructing me who have no legal training whatsoever. Large firms of lawyers with up to 300 people in them with two or three lawyers. They are not governed by the standards I am expected to be judged by. The staggering incompetence of many hard working and decent young people entrusted with the public’s legal problems is breathtaking. They are under so much pressure and have no support. It is not their fault.
Barrister (online survey)
ABS: opportunity or threat?
‘the next two decades will see more change than the past two centuries in the way in which lawyers and the courts function’
Richard Susskind (2012:41)
The future...
• Solicitors and barristers as minority providers of consumer legal services
• Private consumers losing out in the competition for access to (professional) legal resources (cf Hadfield, 2000)
• Increased self-representation
Access apocalypse?
Implications for LSET
• Power of commercial sector has distorted the market for training
• Quality and training issues in respect of unregulated providers
• Flexibility of pathways• Skills gaps – ethics, commercial/social awareness,
mgt training, • Preparation for new roles, eg
– ‘Triage’ and CRM– Legal process engineers and project managers– Legal knowledge engineering/AI
• Will change force us to re-visit the relationship between access to justice and access to lawyers (and courts)?
• Designing ‘rule of law systems’, not just legal systems – Need for joined-up policy-making (and scholarship)
• Education and training• Legal services funding• Substantive law reform• Procedural reform• Diversion from courts
• Academic role? – Understanding the “levers of legal design” (Hadfield, 2008)– ‘Jurist’ function as defenders of the rule of law (cp Pue,
2005; Cotterrell, 2013)
Some preliminary challenges
Questions for LSET
• How (far) does a law school design a curriculum for roles that are changing/difficult to predict?
• What are the particular threats posed by new work environments to professional competence and integrity?
• Should we be actively planning for deprofessionalisation and more activity-based authorisation?
• What steps will improve A2J?