In decades to come, Sir David Clementi may not be a name that is easily remembered, but the report he published in December 2004 marks the beginning of what will be an irreversible shift in the legal profession in England and Wales, with potentially worldwide consequences for lawyers in other jurisdictions too.
In my judgement it is impossible to exaggerate the opportunity that is now ours to shape and deliver, or indeed the threat if we do not.
Until now, law firms have all been owned by lawyers. Capital has been raised from lawyer partners and each firm has remained steadfastly independent of other law firms and the wider business community. The profession’s flirtation with accountancy-led practices was, for the majority of lawyers in law firms, an uneasy development, and the relative demise of those entities (post Enron) has been left unmourned.
At the same time the rise of the in-house lawyer has been inexorable with now perhaps one in five lawyers in the UK working in-house. Businesses both domestic and international know the significant added value derived from their teams of lawyers – And, in my judgement, it is this gradual shift that has prepared the way for the mindset necessary to contemplate even greater change.
So now in 2005, we contemplate the ramifications of Clementi’s work.
The key conclusions (aside from issues relating to the governance and regulation of the profession) relate to the creation of Legal Disciplinary Practices or “LDPs”.
LDPs are law businesses that can be part owned by non-lawyers and can be managed by non-lawyers. Stated blandly in this way it hardly sounds revolutionary, but a moment’s thought confirms the potential enormity of the change.
For literally hundreds of years, the traditional practice model in England and Wales has been for lawyers to work in partnership, wholly owning their businesses. In future we will now have to come to terms with law firms owned by third parties (at least in part) and appointing professional managers of equal status to the lawyers to manage the business effectively.
For those of you still wondering why this is such a big deal, consider the following hypothetical situations.
- What if a major City of London law firm could attract one hundred million pounds sterling to invest in I.T. and infrastructure to create the pre-eminent global business able to undercut all competitors through the innovative use of technology to support all major corporate transactions.
- Suppose fifty small to medium size law firms from around the UK are bought up by a legal franchising corporation. The so called ?Law Express? retail outlets are now given national I.T. and marketing support services, a television and press advertising campaign and outsourced back-office administration.
- Consider a major supermarket chain setting up its own-brand legal services product range, promising that its customers will never again have to worry that they were not getting value for money. The service is provided by five thousand newly appointed in-house lawyers, working from dedicated call centres across the country and with the latest communication links to provide a commoditised service delivered to the customer?s own front door.
- Imagine if a sole practitioner network was formed linking hundreds of sole practitioners to a referral database akin to the ?interflora? florist network. A monthly subscription charge pays for the upkeep of the database and pays for the network to employ a chief executive and sales director to give strategic business guidance to each member of the network.
- Or contemplate a mid-sized London practice accepting a cash injection of twenty million pounds sterling from a major satellite broadcaster to provide content for the new ?law channel? broadcasting live courtroom dramas and legal solutions across interactive TV technology. ?Press your red button now for a new Will form.?
In this brave new world traditional definitions will become less relevant but one thing is certain, this is change on a scale that has the potential for revolutionary consequences.
In this era, it is clear to see that nothing will be left unchallenged, nothing could be taken for granted and nothing but the best leadership and planning will ensure success.
I also consider four further consequences are likely:
- That the market for legal services will expand and grow exponentially;
- That millions more people will have access to legal services through new and more powerful delivery channels;
- That perhaps the majority of lawyers will be employed ?in-house? in one way or another; and
- That the traditional law firm model is under threat like never before.
None of this is imminent if measured in a time span of three years or less but all of it is feasible within ten years. Now ask yourself this question?
Are you ready to contemplate any of this?
If you are, then you are about to consider the greatest opportunity the legal profession has ever had to enhance the well-being of the people and businesses of this country, to provide a genuine service of quality and value while ensuring access to justice and economic and commercial success.
If not, then how the hell do you think you will survive?
It won’t be easy of course – but the Law Society has accepted the in-principle thrust of Clementi?s recommendations and if the professional body is not opposed to the government on this fundamental point, one can only assume that opposition will be to points of timing and detail.
I am presently uncertain as to whether this is a good thing or not? The greater part of me sees these seismic changes in the way the profession works as a once in a lifetime chance to take the best of what lawyers do and to make it as accessible and affordable as possible for everyone.A part of me, however, worries that if the profession does not seize the initiative and lead the change, the ground it concedes will be taken up by entrepreneurs motivated more by profit than access to justice.
The challenge we face is to seize our day and deliver a spectacular legacy for generations of lawyers to come.
The profession is dead – long live the profession.