Lawyers bridle at regulators telling them how to run their businesses. So they will have been more than usually perplexed by the Legal Services Board’s latest pronouncement. The super-regulator does not believe there is enough competition in the legal sector (in fact, there is copious evidence to the contrary).
Its most recent research also found that external capital is not yet deployed in the legal services sector as extensively as some had expected.
Investors are apparently deterred by protectionist lawyers not giving access to their firms and stifling the market.
Chief executive Neil Buckley said the challenges were ‘cultural’, with lawyers ‘reluctant to cede control of their businesses, preferring instead to rely on profits and reserves, or bank lending’.
Yet the same research shows there are no significant regulatory barriers to investment – and that the cost of regulation does not seem to be a barrier either.
That suggests that the market is working fine. How solicitors choose to run their businesses ought not to be any of the board’s concern, as long as they are compliant. That is the prerogative of any business. And if solicitors do not want to hand over the family silver to speculators then that is up to them.
Does the LSB believe in a free market or a market engineered by the state in the person of a quango? We are not altogether clear.