Robert Glennie says that reservations about client confidentiality and privilege have to be taken into account if the new LPP structure, due to come into effect by the end of the year, is to prove a success
The recent decision by the Law Society of England and Wales to put the brakes on the planned Legal Practice Plus (LPP) scheme was met with surprise by many members of the legal profession and interested outsiders. Previously the Law Society’s Executive Committee had demonstrated a clear intent to push the scheme through quickly.
At the end of last year funding for legal advice had been approved by the finance sub-committee ‘to assist in the rapid development’ of the scheme and in December 2000 president Michael Napier expressed his desire for “firms to be able to opt
for Legal Practice Plus before the end of 2001″.
It seems the brakes have been applied because of the deep concerns about client protections in a scheme aimed at allowing non-lawyers to become partners in a solicitors’ practice (subject to solicitors retaining a majority).
These concerns, and the debates over the best form of regulatory model, have been well documented – and are the central theme of opponents to the scheme. The Law Society has been paying close attention to these issues. It concluded on 14 March, following advice from counsel, that legislation is required to bring the scheme into effect if client protections are not to
be compromised. The Law Society had hoped it could provide the necessary safeguards to clients under its existing regulatory powers, by providing that non-solicitor partners in a firm would enter a contract with the Law Society by which they would commit to its authority, standards and professional indemnity insurance requirements.
The Law Society is gathering information to assess what is needed within the protective legislation that it now proposes and may open the issue to consultation within the profession later in the year.
Perhaps we should take advantage of this pause in the proceedings to take stock. The devil is in the detail, and it is important that the detail is worked through rigorously. However, before we are tempted to focus on the detail, we should not lose sight of the original drivers behind the rush for multi-disciplinary partnerships (MDPs) – and indeed how far these have changed since the scheme was first conceptualised.
Napier’s March announcement that the Law Society requires legislative backing for the LPP scheme came hot on the heels of the report by the Office of Fair Trading (OFT) on Competition in the Professions. Although most of the commentary on the OFT report at the time focused on the individual, smaller debates (such as the attack on the relevance of the QC badge), it is arguably much more significant as a milestone in the legal profession’s journey from professional practices to legal businesses.
The competitive landscape for legal services is changing rapidly and those who ignore the changes do so at their peril. When Napier had to announce his disappointing setback with the LPP scheme, he said: “Last week’s report from the OFT confirmed that choice can benefit consumers. We have done a great deal of work on LPP and are determined to make it happen, but it is essential that proper safeguards are put in place.”
He announced plans to enter discussions with the OFT and the Lord Chancellor’s Department (LCD) with the aim of achieving the necessary legislative change to underpin LPP as soon as possible.
The OFT report is symptomatic of an increased focus on consumers and a fundamental change to buying patterns between lawyers and their clients. For example, the OFT report contemplates regulatory changes to allow in-house lawyers employed within businesses to charge – through their companies – for legal services. Our own experience at McGrigor Donald is that many of our lawyers are adding the skills of project manager to their case legal skills, particularly in the context of large-scale infrastructure and complex cross-border work.
At the forefront of their minds are their responsibilities as members of the legal profession – but they are also combining their legal skills with other skills, such as project management or training. For instance, our employment law specialists are moving the traditional role of an employment lawyer (helping, reactively, when a client has an employment -related problem) into a much more proactive position by, for example, offering clients a range of training products – including interactive video programmes depicting scenarios, such as a mock disciplinary hearing, which clients are likely to encounter in the normal course of their businesses.
These types of development could be carried further. We may well see law firms whose business development, marketing and finance functions will be available to clients, in addition to core legal services. The range and nature of services provided to clients by UK law firms is much more likely to expand than contract.
Management of any law firm that prides itself on innovation and focus on its clients will empathise with the instinct to try to embrace new developments and lead the market in its acceptance of change. But the LPP concept presents an interesting conundrum to even the most pioneering of law firms.
It cannot pass unnoticed that the concerns raised by the opponents of the LPP scheme, and recognised by its proponents, centre around the one party who is supposed to be the main beneficiary of it: the consumer, or client.
The threats to client protection and privilege are real – and must be addressed and resolved. With the ‘new’ Government, the chances are that those involved in selecting legislative priorities will have higher priorities than LPPs for some time to come. Whether Napier’s target of the end of 2001 as the date by which the LPP scheme will come into effect remains to be seen. But what is certain is that the market for legal services, and the buying patterns, to which we are accustomed, will continue to change.
If our focus on our clients is to be more than mere rhetoric in our publications, we need to be cautious about change for change’s sake and find means of retaining the client protection and privilege features, traditionally available to clients of law firms, within any new LPP structures that may emerge.
Robert Glennie is senior partner at McGrigor Donald.
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