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The legal market could be opened up to competition as a result of a wide-ranging inquiry into regulations within the profession being conducted by the Office of Fair Trading (OFT). The report is to focus primarily on the effect of the exclusion of law and accountancy from competition law. However, the legal profession is expected to be most profoundly hit by its conclusions, which could prompt a radical shake-up of the system. The investigation might suggest other businesses are allowed to employ solicitors to compete head-on with law firms — so that the top five accountants could challenge the City law firms, or a company such as Virgin could open a legal arm employing lawyers and offering legal services direct to the public. Such a change might also allow commercial firms to compete with solicitors for high street legal services. The report could also herald other changes, including: � Lifting of some of the legal market’s restrictions on advertising � Allowing barristers to promote themselves � Changes made in entry levels to the profession; or � Direct access to barristers. The Director General of the OFT, John Bridgeman, has been asked to report back to ministers at the Department of Trade and Industry and the Treasury later this year. Alison Crawley, head of Professional Ethics at the Law Society, says it is still not clear what parameters the inquiry has: “We have no idea why this has been set up. It’s a mystery to us.” “We expect the investigation to look more thoroughly at barristers than solicitors, but the OFT has told us they aren’t yet sure precisely what they are going to look at.” Crawley expects the OFT to look at direct access to barristers; at advertising restrictions; the limits on what in-house lawyers in non-legal firms can do, and charging structures. CHARGING CARTEL “There have been suggestions that there is a charging cartel in operation among City firms of solicitors,” she says. “I don’t think that is the case, but they might look at it.” The Law Society will cooperate with the investigation, she says, and has ‘nothing to fear’ from its conclusions. She adds: “Prices for legal services to the public are among the most competitive in Europe. That is because in this country the high street is a very competitive environment. City firms make millions not because they’re anti-competitive, but because they are extremely competitive.” The Law Society has already made changes in principle allowing lawyers and non-lawyers to share fees within one firm under multidisciplinary partnerships, but progress has been limited. The Bar Council says it believes there is adequate competition in the profession, and that the traditional division between the advocacy rights of solicitors and barristers will be eroded by the Access to Justice Act when it is introduced later this year in any case. “We are reasonably confident that the Access to Justice Act provides a framework for the way the profession should operate,” says John McLeod, spokesman for the Bar Council. “There is already direct access to the Bar, we have introduced the Bar Direct Scheme. We have seen some fairly lurid suggestions on the conclusions this inquiry might make, but they are based on the situation ten years ago. The Bar has changed and is modern and competitive.” He adds: “Whether such an investigation is strictly necessary could be questioned, but statistics show that the larger firms get, the larger the fees they get. There is an ‘atrium culture’ developing in Britain of large legal and accountancy firms, and someone always pays for all that empty space in their front hall.” A spokesperson for the OFT says that it will only finalize the terms of the inquiry after a consultation process. “We are going to be publishing a consultation document for the professions over the next few weeks,” she adds. “The direction the inquiry will take depends largely on the responses to the consultation exercise. We’ll be asking questions about issues such as restrictions on entry, and all other competition-related matters.”

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