The times they are a-changin'
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College of Law Chief Executive Nigel Savage discusses the future of the legal services market in the wake of the Legal Services Act and questions the impact it will have on careers in the profession.
Any student aspiring to join the legal profession - or as I prefer to call it, the legal services sector - may be profoundly depressed by a glance at the legal press. It's largely doom and gloom, some of it well founded. Recessions have a way of exposing underlying weaknesses in any marketplace and flaws in the operating model. The problem with lawyers is that when they are confronted with a problem, their training and instincts tell them to look for a precedent from the past rather than to confront and embrace new ideas and thinking. To borrow a quote from Henry Ford that Richard Susskind recently used in a report for the College: “If I asked my customers what they wanted, they would have said faster horses!”
The real truth is that clients and society want and need repackaged legal services in a repackaged business model - one that suits their needs rather than those of the lawyers. For the legal services market, the major threat is not just the recession, but the convergence of several factors impacting at the same time:
- A drive to push service delivery further down the delivery chain is happening in many of the professions, including medicine, veterinary science, financial services, accountancy, surveying and architecture. It means that we may need fewer fully qualified generalist lawyers, but many more support lawyers qualified to practise in specific fields.
- The commoditisation of legal services (which is hastening the pace of the above) is reducing legal work to a process which in turn is being fuelled by the impact of technology.
- Legal service providers are attempting to drive down costs at the instigation of clients by embracing the above. This may mean outsourcing some work that has previously been carried out by lawyers - in much the same way as banks and insurance companies operate under business models that challenge the orthodox partnership model.
It is worth remembering that the only areas that are specifically reserved to solicitors are the right to conduct litigation, the right to an audience, probate activities and aspects of real estate. This means that it is not necessary to be a qualified solicitor to conduct vast swathes of the essentially transactional work undertaken in corporate and commercial practices. There may, of course, be good reasons to engage a solicitor to carry out that work - not least his or her high-level expertise, ethical standards and independence.
Against this background we have the Legal Services Act and the creation of the 'super regulator', the Legal Services Board (LSB). The LSB will have the unenviable task of forcing/coaxing the Bar and the solicitors' profession to look forwards rather than backwards. The act regulates only reserved activity and in the next 18 months it will create a framework that enables those delivering legal services to operate under different business models, permit external investment in law firms and create multi-disciplinary practices.
The changes will be as radical as those introduced many years ago when the opticians deregulated. There was a time when you could not get your eyes tested or buy a pair of glasses at the weekend or after 5:00pm. Now that the opticians have commoditised delivery of service, they are open at times convenient to their customers and you can pick up a pair of glasses within an hour of an eye test. In one store you can get your eyes, hearing and heart tested, obtain a flu or cervical cancer vaccination and receive hair-retention advice.
By and large, the general public is better served, in terms of both prevention and cure; and so it might also be when we can buy legal services in the same way. Some providers of legal services are already embracing this culture by responding to the demands of clients. The shape of the market is changing almost irrespective of what the professional bodies say or do. The danger is that requirements in terms of education, training and qualification are falling behind patterns of recruitment and the shape of the legal services market.
So what of the education and training of lawyers? These have remained largely unchanged in the last 50 years, apart from the introduction of the BVC (now known as the BPTC) and the LPC. The system that has emerged is based on undertaking three stages: academic, professional and 'apprenticeship'. The focus of attention from the professional regulators has been almost exclusively on the professional stage, which is a bit like concentrating on the walls of a building without addressing the foundations. The BVC and LPC have been a source of innovation and a catalyst for change, but the other two elements of training have remained largely the same. The result is that undergraduate law schools are almost entirely divorced from the profession, and because of changing patterns of higher-education funding the requirement to obtain a degree has become an impediment to access.
More and more students are drawn to undergraduate law schools: there they are taught by individuals who have never practised law, in a learning environment that has changed little since 1948, when an Oxford professor described the law degree as “education in the law and not education for the law.”
Undergraduate law schools have also been popular with university managers. As one distinguished commentator put it: “They seem the cheapest departments to run…and they are easy targets for cutting costs. It is politically possible to get away with a minimalist philosophy to legal education and its funding”. It is no wonder that the 'for-profit' private sector is eagerly contemplating the removal of the fee cap on undergraduate degrees in what is an almost entirely unregulated environment. To add insult to injury, the Solicitors Regulation Authority (SRA) has now dropped the system of monitoring visits and quality assurance that provided published quality indicators and gave real independent insight into the quality of LPC providers. This has been replaced with an enhanced external examiners system, which the universities have traditionally relied upon, recently described by a House of Commons select committee as "discredited".
After completion of the second stage of training, Bar students are admitted but cannot practise until they have completed a pupillage. However, they do enjoy a professional legitimacy and the qualification pervades the private and public sectors - although it has to be said that the professional body has never rationalised that status within a strategic context. The SRA continues to require students to complete a two-year apprenticeship before admission. This has its origins in the 19th century, when apprenticeship as an articled clerk constituted the training and there was no formal legal education. In today's world it has become an impediment to access, and it is the LPC (in its various forms) that provides the main gateway to the profession and the point at which it is most likely that the incompetent will be filtered out. To make matters worse, the number of training contracts has diminished in real terms and the emerging legal services market, as described above, is embarking on structural change that may see the training contract in certain sectors of the profession further marginalised.
Where does this leave us? The emerging legal services market is an exciting prospect. However, there is work to do matching the educational structure with the shape of the market for legal services and underpinning it with real quality assurance and student consumer protection. The key is meeting the needs of clients. Decisions of individuals and organisations to purchase legal services create demand that drives the provision of those legal services. That client demand in turn shapes the recruitment practices of firms. As such, the main driver of the education, training and qualification process should be the needs of the employment market, and in particular those parts of it that the greatest numbers of young lawyers will want to enter. The purpose of the system is to prepare people for professional practice as it now exists. A system that ignores this will fail.
The professional bodies, particularly the SRA, need to think strategically about what is meant by the professional qualification. Is it a generic professional qualification (like that of the accountant) that embraces everything from cashier to finance director? Or is it limited to specific high-level activities, with the rest of the work carried out by paralegals?
There is much to be optimistic about in the new landscape in terms of career opportunities. Let us hope that the changes pervade education. Lawyers do have a habit of surviving; as Dickens said in Bleak House: “The one great principle of English law is to make business for itself. There is no other principle distinctly, certainly and consistently maintained through all its narrow turnings. Viewed by this light it becomes a coherent scheme and not the monstrous maze the laity are apt to think it”.
Nigel Savage is chief executive of The College of Law.