Shaping the future

Janet Paraskeva sets out the main issues affecting the profession which will preoccupy the Law Society council during the next 12 months

Even before the start of the next Law Society Council year the Society's main board has indicated some of the key themes for debate.

They are all of central importance to the profession: the future of regulation, the long-term future of the client account, the future vitality of high-street practice and possibly also the arrangements for indemnity insurance.

The long-awaited consultation paper on the Office of Fair Trading (OFT) report emerged from the Lord Chancellor's Department (LCD) last week, and it too raises questions pertinent to these themes and to other significant work in which the Society is already involved.

At a recent forum hosted by the council, a range of views on the future of legal services was presented.

City firms outlined the ways in which they are changing to meet growing expectations of a more computer literate and value conscious client base, and corporate business outlined its plans to diversify into legal services provision direct to the public.

One question left unanswered at the forum was the impact of such change on high- street practices and particularly on the small general practitioner - a question which will be addressed by the council next year in one of its major debates.

The employed branch of the profession is growing significantly with one in five solicitors now working in this sector rather than in private practice.

Many young solicitors argue that it offers them a more secure future than private practice.

Certainly entering the profession with student debt to repay makes employment with a guaranteed income, regular working hours and a pension, an attractive proposition when compared with the vulnerabilities of partnership - at least for some.

Some may ask, why a debate on the client account? Money laundering and bank instrument fraud suddenly shot to the top of the regulatory agenda after the terrorist attacks of 11 September.

The Society's compliance board has raised questions about the future of the client account given its capacity for abuse by a small but significant number of dishonest solicitors who steal millions of pounds of clients' money every year.

Are there ways in which the Society could reduce the risks to the public and the cost to the profession in terms of money and loss of reputation?

One of the main issues confronting the profession must be the future of regulation.

The Legal Services Ombudsman in her annual report 2001-2002 suggested that the existence of a multiplicity of agencies involved in the regulation of legal services is no longer operating in the public interest.

The ombudsman argues that the answer is an overarching regulatory strategy, with presumably a single dispute resolution mechanism for handling all complaints.

The LCD too has its finger on this pulse as it responds to the OFT report on 'Competition in the Profession' with its consultation document just published ahead of a review of the regulatory framework for legal services.

We need to examine whether the so-called regulatory maze is a real problem and, if so, whether the mechanisms to solve it could be consistent with self-regulation - a vital role for a Society which currently balances its role as regulator with that of a representative body.

The future of self-regulation in all professions has been questioned worldwide, and the involvement of the consumer in the governing bodies of regulatory authorities is an important development in securing a more open and transparent process.

The Society itself now involves lay people on both its standards board and its compliance board - 25% and 50% respectively.

The governing council also now includes lay people.The Society has also appointed an independent commissioner to oversee the quality of its new consumer redress scheme.

There are some who consider that the Society could be a highly effective standard setter and monitor of compliance without being directly responsible for complaints handling.

However, the handling of complaints directly from consumers is not only an important source of intelligence and information about firms that require extra scrutiny, it is also an important indicator of areas where regulation needs tightening.

It is an integral tool for regulation.

Finally comes the issue of indemnity insurance.

The profession moved away from a mutual fund to the open insurance market in September 2000 and solicitors' firms can now choose to buy their compulsory cover from a range of approved insurers.

What happened was that most solicitors recognised that there was no place in the profession for the serially negligent.

Those with good records and good procedures no longer wanted to subsidise those who fell short.

But two years on, the market is hardening for everyone.

What if even some of the competent firms begin to find it difficult to secure cover, as has happened in other sectors? Is the time right to review how the arrangements are working in practice?

The council has important work ahead in leading the debate in the profession on these four critical themes.

Let your council member know your views.

l A list of contact details of members can be obtained from Elizabeth Kwok, tel: 020 7320 5736, or by e-mailing elizabeth.kwok@lawsociety.org.uk.

A copy of the consultation document can be found on the LCD Web site - www.lcd.gov.uk.Janet Paraskeva is Chief Executive of the Law Society