Tuesday, September 13, 2011

Is Competition in Law Taking Off?

Ken Clarke, the British Justice secretary, is giving a speech that praises Tesco Law and external investment in law firms according to the Financial Times. Increased competition will improve services for consumers. Around 30% of the top 100 law firms in the UK are considering taking external investment or going for an IPO.

Not everything is going to plan. Stephen Mayson pointed out that the road towards the Solicitors Regulation Authority permitting alternative business structures (ABS) on October 6 has been chaotic and won't be happening until "early next year", which is a little vague and will upset many investment plans.

Still, these changes put the UK and Australia in the vanguard of regulatory liberalization in the world today. It was interesting therefore to see a recent report by the Canadian Competition Bureau assessing Canada's steps towards professional services liberalization. One can perhaps, tentatively, generously, call them baby steps. Or maybe that should be crawl.

In 2007 Canada issued a review "Self-regulated professions: balancing competition and regulation". Out of the 53 recommendations covering five professions, it recommended lawyers justify how long it took to become a lawyer, increase mobility between provinces as well as international mobility, free up advertising, abolish tariffs, and allow multidisciplinary partnerships or ABS.

In four years there is some increased inter-provincial mobility, some advertising and marketing and...er...that's it. The Federation of [Canadian] Law Societies said "We've done as much as can be done." Oh dear. How can they be so parochial?

Adam Dodek, of Ottawa University, claims the report has skipped over the most salient issues and that the legal profession is hoping all this horrible ABS stuff will go away, which of course it won't. This where the forces of globalization will come into play and compel the Canadian professions to face a grim reality--adapt or die. There are plenty of examples of both choices.


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