Tuesday, November 29, 2011

The Troika Rampages Across Europe

The effect of the Troika's actions on the regulation of Irish legal services has been severe and radical. The combined might of the IMF, the EU, and the European Central Bank is considerable.

Ireland, however, is only one of its beneficiaries. Italy, Greece, and Portugal are also feeling the heat of change chasing them. As I said yesterday, there's nothing like a good crisis to compel change.

When the apparatchiks of the IMF visit they are very good at fossicking out illiberal tendencies in trade and professions. This means that lawyers can no longer hide behind their former privileges. In Ireland's case the Troika saw that the Competition Authority had reported on professional legal service change in 2006

With a hat tip to Jonathan Goldsmith the Troika isn't holding back. Its demands include the implementation of ABS, freedom of association among lawyers (and other professionals), external ownership and investment of law practices, all of which must shock average Continental (and perhaps civilian) lawyers.

Their historical collaboration with the state, as opposed to the legal profession-market relationships of Anglo-American lawyers, appeared to protect them against radical change since state and profession aims were identical. (See Dietrich Rueschemeyer on comparing professions.) No longer it seems. If the labour market is inefficient then it must opened.

The IMF sees these changes as streamlining the public sector as well as liberalizing markets. Effectively government must be reigned in, and state enterprises privatized, while the market (hopefully) flourishes.

For example, in Portugal the IMF proposes judicial reform along with a revision of the civil code of procedure to reduce case backlogs and increase judicial efficiency. It also says all limitations on practice to be eliminated unless justified or proportional (see page 94 of IMF report).

The IMF reports (linked) for Greece (one and two), Ireland, and Portugal are available. Italy is yet to be drawn up.

What has been viewed as an English peculiarity is now becoming the norm--external investment, ABS and more. Don't waste a crisis.....


Monday, November 28, 2011

Tesco (Ireland) Law?

Ireland is about to head towards Tesco Law. Turns out that Tesco is in Ireland also, so that helps. Last Friday (25 November) I spoke at a conference at University College Dublin on Regulating the Legal Profession.

Ireland has introduced its own Legal Services Regulation Bill (PDF of Bill here) which is based on a report by the Irish Competition Authority published in 2006. The first sentences of the executive summary are trenchant
The Competition Authority has concluded that the legal profession is in need of substantial reform. The profession is permeated with unnecessary and disproportionate restrictions on competition which should be removed so that consumers can benefit from greater competition in legal services.
That these changes are occurring is testament to the intensity of the financial crisis in Ireland. Among the many changes required by the IMF, the ECB, and the EU (the Troika) in exchange for a rescue package was 
To increase growth in the domestic services sector
Government will introduce legislative changes to remove restrictions to trade and competition in sheltered sectors including:
- the legal profession, establishing an independent regulator for the profession and implementing the recommendations of the Legal Costs Working Group and outstanding Competition Authority recommendations to reduce legal costs.
One journalist at the conference joked that "You should never waste a good crisis if you want to get something changed." The Irish government was given slightly less than a year to introduce these changes. The Irish legal profession had been successful before at fighting off change until now.

The conference, organized by Colin Scott, Dean of UCD Law School, attempted to bridge the divide between regulators and practitioners and academics so that a useful conversation might flow. Something flowed at least.

For Julian Webb (who spoke on the Legal Education and Training Review) and myself it was like looking back through a time tunnel to five years ago in the UK when the legal profession was so defensive about the changes being introduced by the Legal Services Act 2007.

The Irish bill essentially proposes the same things that the British have done--separate and external regulator, separating representative and regulatory elements of professional legal bodies, reformed legal training, more open and unrestricted access to lawyers' services either through firms or ABS, and external complaints procedures.

The practitioner speakers at the conference saw these proposals as threats to the integrity and independence of the legal profession. They desire to kill the bill. That isn't going to happen. If they want to pick a fight that they have some chance of coming out of alive then it will be in the negotiations over the details of regulation after the legislation is passed. They know this but still feel as if they must go through the motions. It's a waste of political capital.

I feel we've started a dialogue of sorts. This was helped by trying to put the Irish experience in a less parochial context. Lynn Mather of Buffalo gave a keynote speech on lawyers, the market and the state which theorized some the issues that legal professions face. I placed the regulatory push into its global context. And Colin Scott distinguished meta-regulation from mega-regulation which you can get an idea of from his inaugural lecture, Regulating Everything.

From both economics and sociological perspectives there is no doubt that these changes will occur. More conferences and workshops will be needed to develop the conversations.


Monday, November 21, 2011

What Should We Be Teaching in Law School?

(thanks to New Yorker

There is one thing wrong with the question in the title and that is whether in fact we should have or need to have law schools. The more I think about what the UK Legal Education and Training Review has to do, the more I feel for them. Probably since the days of 1870 at Harvard Law School has there been such an air of turmoil around legal education.

It's clear we don't know what we are doing or why. David Segal's article in Sunday's New York Times, "What They Don't Teach Law Students: Lawyering" speaks to an American dilemma but one that shortly will become an English one too.

The gist of his article is that law firms have to take on the task of training their associates to be "real" lawyers, not just pretend ones out of law school who don't know anything. Moreover, law faculty have no incentive to change this because their reward patterns aren't directly tied to their students getting jobs but to the articles they publish. Teaching also takes a junior role to scholarship.

In part this is because law schools appeared to be trade schools without any serious role in the academy except to bring in money. Now this has become institutionalized because the entire economic infrastructure of law schools is built on a state-guaranteed loan system. Some might say redolent of Fannie Mae and Freddie Mac. For Brian Tamanaha they're a drug.

Law firms are finding that clients refuse to pay the costs of training associates straight out of law school:
Last year, a survey by American Lawyer found that 47 percent of law firms had a client say, in effect, “We don’t want to see the names of first- or second-year associates on our bills.” Other clients are demanding that law firms charge flat fees.
Law jobs as a result are harder to get. Recently in New York a lawyer, who is an adjunct professor at one of the elite law schools there, told me how all adjunct faculty at the elite schools in the north east of the US are being asked to try and place their students. It seems not all are getting jobs.

Whether law schools should become trade schools again isn't the reason I'm writing. There is something wrong with law schools and legal education and they need fixing. Their curriculum follows a path that seems to lead nowhere. And this is true in the US and the UK.

Students are bored, overworked and frustrated. We ought to be able to design a curriculum that excites them and commits them intellectually and emotionally to law. Unfortunately I don't think the legal profession is good at doing that.

Law Without Walls--which is entering its second year--has begun the redesign process and has generated more excitement than any other legal educational venture that I can think of.

So, do we need law schools? While we ponder this I'm sure new educational ventures will come along and stealthily extract the law school consumer base and it could be too late for law schools to repair the damage. Is the law school the best medium in which to learn law?

UK law schools are about to commit seppuku soon. They are to charge tuition fees considerably higher than hitherto but with no concomitant increase in quality or innovation in the curriculum. Indeed, most likely students will be paying more for less as universities freeze hiring or make staff redundant. It won't make the "student experience" anymore satisfying. Indeed, I think it will lead to law schools closing down or shrinking so much that they become adjunct departments to business schools or such. They might as well become paralegal training centres.

All law students--here and in the US--should read David Graeber's Debt: The First 5,000 Years. It's a tremendous read showing how the phenomenon of debt is at the root of our social and economic structure. Law students, and others, need to understand the phenomenology of debt and how it rules their lives. If they do, law schools will have no option but to reform. But how?

Follow up: The New York Times has published a series of responses to Segal's article.