Anyone who thinks talk is cheap should get some legal advice.Footnote 1
The legal profession in England and Wales has a long complex history.Footnote 2 Typically viewed as a bastion of privilege and tradition, from the mid-twentieth century onwards it underwent rapid and notable change: remarkable expansion in numbers, followed by liberalisation which effected far-reaching alterations to rules for entry and practice. The profession thus transformed “from a pre-capitalist craft occupation … into a capitalist service industry”.Footnote 3 This article explores the process and impact of liberalisation on the legal profession in England and Wales. It seeks to understand what liberalisation means in this context, and how liberalisation efforts shape and change our vision of the profession and its role within society. In doing so, the article offers an original perspective on the contemporary profession: aiming both to explain the process of liberalisation on its own – overtly market-focused – terms, and critically to appraise the transformation of the lawyer from counsellor to competitor to date.
Much work on the profession emphasises the extent to which its principal branches, solicitors and barristers, historically disclaimed the logic and language of the market. With liberalisation, however, comes a tendency to view the profession in market-oriented terms. Thus, the former professional–client relationship is reconfigured, in explicitly economic fashion, as constituting the interaction of forces of supply and demand for legal services. Concepts like commoditisation, market concentration, economies of scale and scope, and disruptive innovation, are increasingly recognised and discussed. From one perspective, this shift in nomenclature merely acknowledges expressly what has always been true in practice: that lawyers are businesspeople, often highly remunerated ones. Clients, moreover, are consumers of professional services, albeit the underlying issues at stake frequently transcend the purely economic. Yet the ideology of the market can only be pushed so far, in part because of the profession's significant non-economic role within the broader societal structure, but also because the legal services market is notably removed from the archetype of perfect competition. The advent of liberalisation, moreover, alters expectations of what is required of lawyers, whether by their clients, by government or by society beyond.
This article aims to map and explain the shift towards a market-focused approach to legal services provision. To do so, the article describes and explores the distinctive dynamics of supply and demand within contemporary legal services markets. It then considers the potential implications of reconceptualising the legal system and the profession in explicitly economic terms. Legal liberalisation encompasses an array of regulatory, political and even technological developments, much of which has been considered elsewhere.Footnote 4 The article seeks to add to the existing literature by taking the basic premise of liberalisation – that economic activity should be subject to competitive market forces – and considering the consequences that follow for lawyers and their clients. It thus endeavours to give greater shape and content to the often-ambiguous notion of liberalisation as it is deployed in this context, and to provide a reasoned assessment of its prospects for success when considered on those terms.
The article begins by examining the past and present structure of the profession (Section II), arguments in favour of liberalisation (Section III), and five manifestations of liberalisation efforts (Section IV). The primary contribution is contained in Section V, which considers the emergent dynamics of the supply and demand sides of the legal services sector in the wake of liberalisation. Section VI concludes briefly.
II. The Legal Profession: Past and Present
We begin with an overview of the legal profession in England and Wales. Legal services are an expansive product category. They comprise “reserved” legal activities – rights of audience, conduct of litigation, reserved instrument activities, probate, notarial services and administration of oaths – and other non-reserved activities, namely “the provision of legal advice or assistance in connection with the application of the law or with any form of resolution of legal disputes; [and] the provision of representation in connection with any matter concerning the application of the law or any form of resolution of legal disputes”.Footnote 5 Reserved legal services can be provided only by appropriately qualified practitioners,Footnote 6 making this the most straightforward understanding of what a “lawyer” entails. Services provided by qualified practitioners in their professional capacities or by authorised providers that employ those individuals, moreover, come within the notion of “regulated” services, and are subject to full regulatory scrutiny even if the specific activity is outside the reserved core.Footnote 7 Both reserved and regulated services thus fall within the “professional” sphere of the market. Yet the broad definition of legal services above allows ample scope for unreserved activities (e.g. general legal advice, employment advice, will-drafting) provided by unregulated entities (e.g. citizens advice bureaux, trade unions, will-writers).
Regulatory tasks in respect of reserved activities are performed today by numerous professional bodies.Footnote 8 Yet for centuries the legal profession in England and Wales comprised primarily two branches: barristers, the “senior” branch, and their more numerous “junior” colleagues, solicitors. Largely an artefact of historical development, the distinction between barrister and solicitor titles is one of the more idiosyncratic features of the jurisdiction. Each branch originally enjoyed its own monopoly in its practice area – rights of advocacy for the Bar, conveyancing by solicitors – and each today maintains distinctive entry and training requirements, representative and regulatory bodies, and core or conventional practice areas.
In considering the impact of liberalisation on the legal profession, however, this article takes a broader functional approach that focuses on lawyers as legal service-providers: subject to regulatory obligations but also to increasing competitive pressures. This approach acknowledges the blurring of traditional demarcations between the discrete branches and the increasing fragmentation within the branches themselves; both issues are considered below. It also mirrors the approach in recent high-level reports on the sector. These include the Clementi Report, which suggested that the different professional branches should no longer be regarded as separate professions, in part due to earlier liberalisation efforts;Footnote 9 and those of studies by the Legal Education and Training Review,Footnote 10 Competition and Markets AuthorityFootnote 11 and Institute for Employment StudiesFootnote 12, each of which adopts an expansive understanding of “legal services” as the focus for reform. It further reflects academic work which identifies an emergent quality of liminality among legal professionals,Footnote 13 alongside the disruptive market dynamics that provide the starting point for this piece.Footnote 14 Where relevant, however, title-based distinctions are flagged and discussed. Given its research question, the article does not consider the judiciary nor directly address lawyers in government service, although both often have prior experience of private practice.
The legal sector has long-exhibited many of the characteristics that distinguish liberal professions from other business activities. These include mastery of a specialised field of knowledge, representation by a governing body (here, bodies) with control over members, entry requirements focused on competence, powers of self-regulation imposing elevated standards of practice, and limitations on self-interest, namely the lawyer's overriding duty to her client.Footnote 15 Burrage recognised a notable paradox in the historical development of the legal profession: as English society generally became more entrepreneurial and market-oriented, lawyers became progressively less so, largely immune to regulation by state or market.Footnote 16 Hanlon similarly identified two progressive stages of evolution: from a gentlemanly conception of professionalism, whereby lawyers were status-holders associated with the elite, to a social service conception linked to ideas of social democracy.Footnote 17 Yet, notably lacking from either conception is enthusiasm for or engagement with the market as such.
This archetypal view – of a homogeneous, high-status profession composed of individual providers – has changed since the mid-twentieth-century.Footnote 18 Three strands of this shift are of interest. First, there was an “extraordinary”Footnote 19 growth in the size of the profession from the 1960s onwards.Footnote 20 Relevant factors included increased legal aid, the emergence of academic legal education creating a career pathway, increased numbers of women joining the profession and changing social patterns, including greater homeownership and divorce which created additional legal need.Footnote 21 Increased numbers have two important consequences: greater heterogeneity among professionals, which potentially challenges the distinctive identity that the principal branches cultivated over many decades; and a risk of oversupply leading to increased competitive pressures, including downward pressure on prices and the possibility of market exit by suppliers.
Second, although the profession was initially spared the brunt of Thatcherite deregulatory fervour, from the late 1980s onwards its restrictions and professional practices were viewed with suspicion. Thus the historic latitude granted to the legal profession, whereby regulatory independence was a core requirement to discharge its perceived constitutional role of protecting the rights and liberties of citizens, was progressively pared back.Footnote 22 An important milestone was the Courts and Legal Services Act 1990, which removed the practice monopolies of the principal branches. The Legal Services Act 2007, discussed below, broke a further monopoly be enabling non-lawyers to take financial interests in legal services firms. Gradually, state-endorsed restrictions on practice have been removed, thus exposing lawyers, at least in principle, to ever-greater competition.
Third, the rise and fall of legal aid provision has an important role in defining the profession. A modern system for criminal and certain civil matters was introduced by the Legal Aid and Advice Act 1949, as a complement to the emerging welfare state. Its scope was expanded in 1970, when a broader range of civil claims came within its ambit. With funding came greater opportunity to translate abstract legal need into concrete demand, with knock-on expansionary effects for service-providers. From the mid-1980s, however, the increasing cost of provision, together with its close alliance to (by then much-maligned) welfare statism, led to criticism of its perceived profligacy. This resulted in sustained efforts by Tory governments to cut costs, primarily by reducing rates.Footnote 23 Yet legal aid reform was more than a partisan issue, with New Labour subsequently attempting to “marketise” provision in the Access to Justice Act 1999.Footnote 24 To sell its reforms, the Government attacked “fat cat” lawyers, who were characterised as profiting at the public's expense.Footnote 25 The Coalition Government further reduced – arguably “decimated”Footnote 26 – both civil and criminal provision. This has profound effects for two constituencies: individuals who rely upon legal aid to secure access-to-justice, and professionals whose work is funded, wholly or partly, by legal aid. The implications for both are considered in Section V.
III. Narratives of Liberalisation
Before considering how liberalisation occurs within the legal profession, we might ask why it may be necessary. Broadly speaking, liberalisation implies a transition from controlled to competitive markets. Ordinary usage encompasses a spectrum of market-making and -shaping activities, including deregulation, privatisation, structural separation and antitrust enforcement. In professional services, liberalisation implies a removal of common restraints on competition, including restrictions on entry, organisational form, promotional activity and pricing.Footnote 27
Liberalisation is, to put it mildly, a disputed form of regulatory policymaking.Footnote 28 It is closely associated with neoliberalism, a rough understanding of which is the promotion of less state/more market in economic and social governance.Footnote 29 Debates on liberalisation often take a polarised form: from viewing the process as a baseline requirement for inclusion within the modern global economy,Footnote 30 to a dogmatic enterprise that aims to introduce market forces at any cost and as an end itself in itselfFootnote 31 – the “commodification of everything”.Footnote 32 Assuming that legal liberalisation is not purely an ideological exercise, it is valuable to consider its anticipated benefits – and thus its underlying regulatory rationale. Legal liberalisation is advocated from two distinct perspectives: that of a “free competition” argument, and that of an “access-to-justice” argument.
A. The “Free Competition” Argument
[F]ree competition between the providers of legal services will, through the discipline of the market, ensure that the public is provided with the most efficient network of legal services at the most economical prices.Footnote 33
The “free competition” argument emphasises the extent to which the legal profession constitutes a business activity like any other. Lawyers are service-providers, clients are consumers and legal services are akin to a commodity, commanding a market price and susceptible to forces of supply and demand. From this perspective, there is no meaningful distinction between lawyers and plumbers; to the extent that perceptions of difference persist, these are attributable primarily to the pretensions of lawyers.Footnote 34 Accordingly, legal services cannot and should not escape the new normal of liberalisation and competition. Subjecting the profession to greater competitive pressures has the potential to generate the attendant benefits of an open market: downward pressure on prices and greater choice on the demand side; increased opportunities for new entrants offering more innovative or cost-effective services on the supply side; and reduced need for costly regulation. It also removes an anomalous and illegitimate advantage: to the extent that we do not permit plumbers to cartelise because it contravenes the public interest, lawyers should be held to an equivalent standard.
The free competition argument emphasises the perceived link between liberalisation and neoliberalism.Footnote 35 For some commentators, legal liberalisation is driven primarily by a political agenda aimed at deepening markets forces while rolling back the state.Footnote 36 The liberalisation programme has been associated with a “hegemony of neoliberal thinking about the relationship between the public and private sectors, the benefits of applying the logics of the market to wider and wider spheres of human activity, and transferring responsibility for the resolution of social problems from the state to the individual”.Footnote 37 A provocative related account suggests that conservatives targeted the profession because of its association with social democracy, principally the link to the welfare state through legal aid.Footnote 38 The crux of this rationale, nonetheless, is the assumed superiority and perhaps inevitability of market forces as the organising principle for economic and social activity, including the law.
Although persuasive as a partial explanation for the practice of liberalisation, the free competition argument encounters two difficulties. The first is that legal services markets are far from the archetype of perfect competition.Footnote 39 Legal services are a product where a minimum level of quality is important: a will must be validly executed, a property correctly conveyed, etc. Yet it is difficult for clients to know ex ante whether their lawyer has the requisite skills, while problems in service delivery may be discovered only years later when parties seek to rely upon the original work (upon death of the testator, reconveyance of the property, etc.).Footnote 40 This contrasts with, say, inadequate plumbing services, the effects of which tend to be more readily apparent to purchasers. Legal consumers furthermore often require services at periods of acute vulnerability or “great need”.Footnote 41 Accordingly, regulatory intervention to ensure minimum quality levels, arguably, remains warranted in the public interest, over and above ordinary consumer protection rules. Moreover, injecting competition into the legal services sector, even if considered desirable, appears to be less-than-straightforward, as the available empirical evidence suggests that, thus far, liberalisation has not significantly increased competition in England and Wales.Footnote 42
The second difficulty is that even well-functioning legal services markets are unlikely to satisfy all consumer need. Legal services remain an expensive commodity even under competition. Recent experiences in markets affected by legal aid cuts, for instance, indicate that, for the most disadvantaged section of the population, legal assistance remains an unaffordable luxury.Footnote 43 Efficiency in distribution is thus insufficient to ensure complete coverage. Instead, some degree of redistribution, whether through state subvention or cross-subsidisation between users, is necessary.Footnote 44 From this perspective, a degree of market failure is inherent in legal services.Footnote 45
B. The “Access-to-justice” Argument
Access-to-justice requires not only that the legal advice given is sound, but also the presence of the business skills necessary to provide a cost-effective service in a consumer-friendly way.Footnote 46
A well-functioning market … is particularly important where the products or services are critical to consumers, the economy and society.Footnote 47
An alternative perspective focuses on the ability of a liberalised legal services market to improve “access-to-justice”, thus advancing what many would argue are inherently non-economic values including equality, democracy and protection for the rule of law.Footnote 48 Access-to-justice can be defined, broadly, as the ability of people to obtain just resolution of justiciable problems and enforce their rights, in compliance with human rights standards.Footnote 49 In contrast to the free competition argument, the access-to-justice rationale emphasises the distinctiveness of legal services: the profession is embedded in, and contingent upon, the wider social structure,Footnote 50 operating as a public safeguarding service.Footnote 51 Access to effective legal assistance, from this perspective, is indispensable to pursuit of justice.Footnote 52 Yet accessibility depends on affordability, as legal need can be satisfied only where purchasing legal services is within the grasp of consumers.Footnote 53 The lynchpin of any cartelisation strategy is creation of artificial scarcity: cartelists, whether lawyers or plumbers, reduce the quantity of goods/services available below the competitive level to earn supra-competitive profits on remaining supply. Hence liberalisation – and with it, removal of barriers to entry and other producer-imposed restraints on trade – has the potential to further access-to-justice by increasing the availability, and reducing the price, of legal services.Footnote 54
Although prominent in contemporary discourse, the access-to-justice argument also encounters two difficulties in practice. The first is the compromise, and thus risk, that is inherent in increasing access by increasing competition. Although effective provision of legal services requires both efficacy and efficiency, these two values are not necessarily mutually reinforcing. In particular, there may be a trade-off between quality and cost.Footnote 55 High-quality legal services are often more costly to provide, thus restricting access to a narrower subset of wealthier clients. Yet greater availability of lower-cost, lower-quality services may compromise the objective of achieving justice if it prompts a drop in professional standards.Footnote 56 This tension is seen, inter alia, in debates regarding commoditisation, discussed below, where the price of tackling inefficiency in individualised service provision may be the de-professionalisation of providers and the downgrading of services offered.Footnote 57
The second difficulty is similar to that encountered in the context of the free competition argument: regardless of how effectively competition develops within legal services markets, a sizeable subset of – typically the most vulnerable among – the population remains outside its reach. Even if one does not object to conceptualising the citizen coming to law as a “consumer” of legal services,Footnote 58 absent sufficient means the consumer cannot access assistance, and thus in practice the citizen is denied equal access.Footnote 59 The necessary solution again is to remove this from the purview of the market through public or private subvention, and legal aid in particular is a core strand of the access-to-justice project.Footnote 60 Yet, although this does not invalidate the access-to-justice rationale for liberalisation, again we see its limits: the economic understanding of a legal services “market” does not map precisely onto broader notions of justice and thus law as a public good.
The expansive understanding of liberalisation in this article includes efforts to restructure legal aid, discussed below. In this context we typically refer to marketisation, yet the above rationales remain applicable. The free competition argument would link marketisation to broader efforts to corporatise and privatise public services in the interests of efficiency, and perhaps ultimately to roll-back the welfare state. The access-to-justice argument may justify using market forces to achieve maximum value from finite legal aid budgets. The extent to which such arguments are plausible and legitimate takes us into delicate political territory beyond the scope of this article; yet the parallel movement towards marketisation of legal aid remains an important component of the transformation of the legal profession which informs our analysis.
IV. Liberalisation and the Future of the Legal Profession
Liberalisation, as noted, implies a transition from controlled to competitive markets. In this section, we examine five manifestations of such transition within the contemporary legal services sector. The first two examples comprise instances of liberalisation in a strict sense, involving removal of restrictions on practice and entry. The next two represent important sources of competitive pressure, which have prompted or are likely to prompt greater commoditisation of provision. The final example illustrates the dynamics of competition in liberalised legal services markets. The aim is not to provide a comprehensive overview of legal liberalisation, but rather to sketch its most important or illuminating elements. In doing so, this section informs our interrogation of the implications of liberalisation in Section V.
A. Clementi Report and Legal Services Act 2007
Arguably, the most significant recent development is the Clementi Review of the Regulatory Framework for Legal Services in England and Wales, which resulted in enactment of the avowedly liberalising Legal Services Act 2007 (LSA07). The Review, the final report of which was published in December 2004, was directed towards investigating “what regulatory framework would best promote competition, innovation and the public and consumer interest in an efficient, effective and independent legal sector”.Footnote 61 As noted, the legal sector had long followed a model of self-regulation, under the aegis of the Bar Council for barristers and the Law Society for solicitors. Although not inherently defective as a regulatory approach, there was a widely held view that self-regulation had failed effectively to discipline or deter inadequate or inappropriate behaviour by lawyers.Footnote 62 Three of the Review's recommendations, and their implementation in LSA07, are important for our purposes.
The first is Clementi's endorsement of a split of representative and regulatory functions within the professional organisations that comprise the profession, with oversight of frontline regulators by an independent umbrella regulator. This was encapsulated in establishment of the Legal Services Board (LSB) under Part 2 of LSA07, alongside the separation of, inter alia, the Solicitors Regulatory Authority (SRA) and Bar Standards Board (BSB) from the Law Society and Bar Council, respectively. Justifying departure from self-regulation, Clementi focused on the inherent conflict of interest it generates; suggesting, in effect, that practitioners could not be trusted – but nor should they be expected – to promote public and consumers interests at the expense of their private interests.Footnote 63 Yet splitting representative and regulatory functions, arguably, encourages the professional associations to become quasi-trade associations, focused on promoting members’ interests; a single-minded approach which, Paterson argued, clashes with the essence of professionalism.Footnote 64
The second recommendation related to complaints procedures for legal services. The Review highlighted a perceived inadequacy of the existing procedures of the professional bodies, concerning both the quantity and quality of complaints assessment.Footnote 65 In recommending a single independent body to handle consumer complaints – culminating in creation of the Legal Services Ombudsman under the Office for Legal Complaints – the Review sought to simplify, clarify and ensure consistency and independence of complaints procedures.Footnote 66 The alignment of procedures for the various branches further blurs the line between ostensibly distinct legal service-providers. It also requires all lawyers to become more consumer-focused, by taking complaints about poor quality service seriously.
Finally, the Review recommended introduction of “alternative business structures” (ABSs), departing from long-standing restrictions that prevented barristers and solicitors from entering into partnerships with other professionals, whether lawyers or non-lawyers.Footnote 67 ABSs comprise legal practices where a management role or ownership interest is held by a “non-authorised” person or body, that is, a non-lawyer.Footnote 68 In approving the introduction of ABSs, the Review swept away conventional justifications for a restrictive approach to legal business structures. It exploded the myth of lawyers as dispassionate professionals operating outside the market, casting scorn on “the notion that for lawyers, unlike businessmen, making money is merely a happy by-product of doing their professional duty”.Footnote 69 It emphasised the extent to which practitioners engage in profit-seeking behaviour,Footnote 70 including cherry-picking of profitable activities;Footnote 71 that consumers value not merely effective legal skills but also lower pricesFootnote 72 alongside high-quality business services;Footnote 73 and the potential for new entrants and investors to introduce innovative “fresh ideas” that would enable more effective and efficient service provision.Footnote 74 In the years since enactment of LSA07, the number of ABSs has risen steadily but slowly,Footnote 75 arguably falling short of expectations.Footnote 76 Introduction of the possibility of ABSs nonetheless altered the status quo within the profession, moving away from the public interest values implicit in the partnership model,Footnote 77 and reflecting instead a “more entrepreneurial vision of the future role of the lawyer”.Footnote 78 The gradual uptake of ABS licences also appears to be altering modes of doing business, with greater emphasis on integrated client-specific service provision, and reduced emphasis on traditional values like professionalism and access-to-justice.Footnote 79
B. Legal Education and Training Review (LETR) and Introduction of the Solicitors Qualifying Examination (SQE)
A second key development is the LETR,Footnote 80 and subsequent efforts of the SRA to reform entry pathways for solicitors. The LETR was commissioned by the principal frontline regulatorsFootnote 81 to review the education and training requirements of individuals and entities delivering legal services.Footnote 82 It was prompted by the perceived expansion and evolution of the legal services market in England and Wales, triggered by LSA07.Footnote 83 Other relevant factors included the prospect of technological innovation in service delivery, reduced intakes after the Global Financial Crisis, a rise in outsourcing and the high cost of legal education which, inter alia, lowered uptake among new entrants of social justice-oriented work.Footnote 84 The LETR had to grapple with traditional arguments for and against restrictive entry requirements: whether a blunt but plausibly effective guarantor of quality service provision;Footnote 85 or simply a means to control supply.Footnote 86 Three themes emerged: namely, the need for legal education to ensure, simultaneously, quality, accessibility and flexibility in training.
Among other developments, the LETR prompted the SRA to reconsider training routes for entry into the solicitor profession. The motivation behind the Training for Tomorrow review echoed the LETR's findings: to ensure consistently high standards across the solicitor branch, and to remove barriers to access.Footnote 87 It culminated in proposals to replace the existing decentralised training route with a two-stage SQE. This abandons the Qualifying Law Degree (QLD), and focuses on an ostensibly more relevant range of legal practice topics.Footnote 88 The move followed extensive consultation with stakeholders and no small amount of controversy, with the solicitor branch, for the most part, “distinctly underwhelmed” by the proposed changes.Footnote 89 Large corporate firms expressed particular concern about a glut of mediocre, underprepared junior lawyers flooding the market;Footnote 90 a concern that sits uneasily with the SRA's insistence that the SQE provides the most appropriate mechanism by which to guarantee the quality and competence of solicitors, while removing supposed barriers to worthy yet underprivileged candidates. Yet employers with greater personal experience of recruiting staff via non-traditional routes are more positive about its prospect.Footnote 91 The much-disputed innovations of the SQE raise interesting questions, particularly the role of competence – perceived and actual – as a dimension of competition. This is considered further below.
C. Disruptive Innovation in Legal Services Provision
We turn to market features that augment the effects of competition for legal services, thus reinforcing the impact of liberalisation. The first is the prospect of disruptive innovation, via new legal technologies (lawtech) that change and ultimately challenge traditional modes of services provision. Lawtech has no fixed definition and can be understood expansively. Susskind, for instance, identified 13 categories of lawtech with the potential to disrupt conventional approaches to lawyering: including document automation, online dispute resolution, online reputation systems, online education and the prospect of “legal question answering” using artificial intelligence (AI).Footnote 92 A narrower understanding of lawtech is as “technology that provides self-service direct access to legal services for consumers”, and thus “substitutes for a lawyer's input”.Footnote 93 This is distinct from greater use of technology by administrative agencies tasked with applying legal rules,Footnote 94 or by courts adjudicating disputes,Footnote 95 which fall outside the scope of this article.
Disruptive technologies coincide with liberalisation of the profession to the extent that they facilitate the commoditisation of legal work: moving away from the “cottage industry” model of bespoke services provided to individual clients with unique issues, and towards standardisation, systematisation and even externalisation (i.e. pre-packaging and online provision) of legal products.Footnote 96 Commoditised legal work, at its most crude, might be characterised as “work from which [lawyers] can no longer make money”.Footnote 97 There is also potential for a feedback effect, insofar as deregulation and competition create scope for technological innovation in lawyering.Footnote 98
The full impact of the development of lawtech, and in particular its potential to disrupt legal services provision, is an open question. There is little evidence that the traditional role of the “lawyer” is headed for extinction anytime soon, being considered among the least likely candidates for mechanisation by AI in future.Footnote 99 To date, the legal profession in England and Wales has, depending on one's perspective, either successfully resisted or failed to reap the benefits of the anticipated lawtech revolution.Footnote 100 Reticence may, however, prove unviable longer-term. Greater recourse to lawtech is not necessarily anathema to quality services provision, moreover, potentially enabling for instance the pooling of legal expertise.Footnote 101 A counter-argument is that it may “impoverish” expertise insofar as lawyers are no longer required to exercise a range of traditional legal skills.Footnote 102 Human lawyers nonetheless continue to possess various “added-value” attributes when compared with lawtech-based provision, including greater empathy with clients, a commitment to ethics-based lawyering and the capacity to address legal novelty.Footnote 103
Yet, to the extent that legal services provision can be and increasingly is “decomposed” into distinct tasks, at least some of which can be “de-lawyered” (i.e. effectively performed by non-lawyers, including via lawtech),Footnote 104 then the putative specialness of the lawyer's craft may be insufficient to retain its current business. As Legg and Bell argue, it is unhelpful to generalise about the impact of lawtech as a whole. Instead, it is necessary to consider discrete practice areas, some of which (e.g. document review or basic contract drafting) are more susceptible than others.Footnote 105 Law firms, indeed, perceive a strict dichotomy between high-volume commoditised (and largely mechanised) work, and high-quality legal services.Footnote 106 There is also the possibility that lawtech developers may in future choose to integrate vertically and offer services directly to clients, in competition with lawyers.Footnote 107 Even if the growing use of lawtech is unlikely to change fundamentally the role of the lawyer in the short-term, it may disrupt the economics of legal practice by shifting patterns of supply and demand,Footnote 108 as discussed below.
One area where, in principle, mechanisation has the potential to make an unambiguously positive contribution is in facilitating access-to-justice, by, essentially, driving down the costs of services provision. As noted in Section III(B), there may be a trade-off to the extent that commoditised provision is cheaper but also, potentially, less nuanced or sensitive to clients’ personal circumstances. As Zuckerman argues, it may nonetheless be preferable to perfectly tailored but unaffordable services.Footnote 109 Yet, perversely, it is precisely those practice areas where lawtech has greatest potential in access-to-justice terms (by reducing costs for vulnerable consumers) that adoption is slowest: perhaps unsurprisingly, those firms that can most afford to invest in lawtech are least likely to have publicly funded clients.Footnote 110
D. Reform of Legal Aid
This brings us to the second current of change, namely the retrenchment of legal aid provision, which removed large quantities of funding from the criminal and civil justice systems in the last decade. As described in Section II, publicly funded legal aid rose then fell in the later twentieth-century, subject to anti-welfare scepticism during the Thatcher era, and deprioritised in comparison with health and education under New Labour. Yet the most profound change was effected under the Coalition Government which took power in 2010, promising “a fundamental review of Legal Aid to make it work more efficiently”.Footnote 111 The ensuing consultation was premised on the assumption that an existing over-availability was over-incentivising legal proceedings that would be better resolved outside the court system; but it was also explicit about “the need to reduce substantially spending on legal aid” as a motivating factor.Footnote 112
Despite serious concerns raised by respondents,Footnote 113 the Government proceeded with a two-pronged attack on aid provision. Under the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO12), swathes of both civil and family law proceedings were removed from coverage absent exceptional circumstances, essentially reversing the default approach under the Access to Justice Act 1999.Footnote 114 The nominal access-to-justice alternatives for would-be clients comprise a mixture of self-help and non-legal processes like mediation, although the evidence suggests that, for many, the result has been a failure to exercise or defend their legal rights at all.Footnote 115 In tandem, while access to criminal legal aid was left largely intact, the Government targeted the other side of the equation by slashing the rates paid to professionals – barristers and solicitors – for their services. The Government was, however, subsequently forced to abandon more extreme proposals for further marketisation.Footnote 116 These included wildly unpopular plans for price-competitive tendering that would have forced defence lawyers to underbid each other for work,Footnote 117 and a dual contracting system which, it was feared, would drastically reduce the number of criminal defence firms.Footnote 118
The effects of these cuts on the legal profession and the clients that it serves have been severe. The UN Special Rapporteur on extreme poverty and human rights described LASPO12 as “decimating” civil legal aid in England and Wales, pointing to an 82 per cent decline in the number of funded cases between 2010/11 and 2017/18.Footnote 119 (The flipside was a 37 per cent decline in aid spending over the period.Footnote 120) For professionals working in criminal defence, funding cuts have resulted in detrimental working patterns and chronically low morale which is described as “unsustainable”.Footnote 121 Undoubtedly, the story of legal aid is an example of how the ideology of austerity has been deployed, whether deliberately or effectively, to roll-back the parameters and protections of the welfare state. Yet these recent efforts also appear to be directed at the profession itself, and thus function as a type of liberalisation-by-stealth. As Lord Chancellor Clarke asserted: “not the least of my aims is for a reformed profession: one where there is enough provision to ensure people have access-to-justice; but more broadly, that we have competitive, consumer-focused law firms that can compete internationally.”Footnote 122 The implications are explored in the next section.
E. Legal Services Market Study
Finally, we consider how competition functions in action within the legal services sector. For this, we turn to the Competition and Market Authority (CMA), Legal Services Market Study from 2016, which offered a stocktaking of existing liberalisation efforts,Footnote 123 and its subsequent Implementation Review from 2020.Footnote 124 The Study concluded that, despite the ostensible presence of significant competition alongside low barriers to entry, the legal services market did not work well for individual consumers or small businesses. Such purchasers lacked the experience and information necessary to negotiate the market and to engage confidently with providers, and were hampered by a lack of transparency regarding price, service and quality. The Study proposed a package of remedies to increase consumer engagement, which aimed to increase the quantity and accessibility of information available.Footnote 125 The Study also raised concerns about high regulatory costs which potentially resulted in higher retail prices and in barriers to innovation, although it proposed no specific remedies.Footnote 126
The CMA's findings on demand-side competition were endorsed by the Ministry for JusticeFootnote 127 alongside relevant regulators.Footnote 128 The Implementation Review subsequently noted a substantial increase in the levels of market information available to consumers, but only limited impact on levels of competition. This it attributed partly to the recent nature of reforms, but also, more problematically, to continuing issues of consumer mistrust and disengagement.Footnote 129 Greater transparency nonetheless continues to be the prescription going forward.Footnote 130 Conversely, the Ministry declined to follow a recommendation to examine the regulatory framework, citing an absence of obvious necessity.Footnote 131 The Implementation Review similarly doubled down on this issue, identifying “a strong case for wholesale [regulatory] reform”, not least due to significant growth in the unauthorised sector because of advances in lawtech.Footnote 132
Arguably, the CMA's recent work in the legal sector raises more questions than it answers, and a full market investigation reference is surely a possibility.Footnote 133 Yet it remains of interest, both because of what it tells us about competition in legal services, and because of the illuminating – and contrary – vision of the legal consumer that emerges.
V. Liberalisation and the Dynamics of Legal Services Markets
The preceding section outlined the key dynamics of liberalisation in legal services. Although liberalisation may occur through positive and overt efforts, it can also be effected – and affected – more obliquely. In this penultimate section, we reassess the liberalisation process specifically on its own terms: namely, by considering the implications of reconfiguring the professional–client relationship, in an overtly economic manner, as constituting the interaction of supply and demand in legal services markets. It was noted above that a fundamental underpinning assumption of liberalisation as a form of regulatory policymaking is that economic activity should be subjected to competitive market forces. In this section, we evaluate what this means in practice for today's lawyers and their clients. We consider first the evolving understanding of the lawyer within the liberalised legal marketplace, followed by the different faces of today's legal consumer.
A. Lawyers after Liberalisation: From Counsellor to Competitor
We begin with the supply side, namely the various groups that comprise the legal profession, including what might be considered its good substitutes. We consider the evolving profession from three perspectives: that of the lawyer as status-holder, as supplier of services and as competitor.
1. Lawyers as status-holders
We start with the long-standing notion of the lawyer as a status-holder.Footnote 134 Traditionally, there was a strong link between the law as a professional occupation, and notions of respectability and “gentlemanly” behaviour.Footnote 135 High status was inherent in the Bar due to its aristocratic origins, and became a core professional project for solicitors seeking to bring their occupation into line.Footnote 136 Burrage, indeed, suggested that the distinctive features of the profession – including practice-based training, a clear demarcation of occupational jurisdiction and reliance upon voluntary associations to defend shared interests – were reflective, even in part constitutive, of the English class system.Footnote 137 Yet, as more archaic aspects of legal practice were discarded, lawyers continued to benefit from a perceived standing as “social service professionals” with antipathy to the market,Footnote 138 and as “the leading experts in a complex field which affects every citizen”.Footnote 139 To be a qualified lawyer was thus a position of “cultural weight”.Footnote 140
Liberalisation, however, renders it impossible for the profession to disdain market dynamics, resulting in an increasingly commercialised, entrepreneurial vision of the lawyer as a professional services-provider.Footnote 141 The loss of historic monopolies removed the prestige of exclusivity and the comfort of artificially reduced competition. Commoditisation challenges the perception of lawyers – or at least of legal work – as highly skilled, bespoke and inimitable. Cuts to legal aid and other manifestations of the “more-for-less challenge”Footnote 142 prompt clients to demand value-for-money in tandem with learned counsel. Even the buzzword of “commercial awareness”, an inescapable shibboleth for today's aspiring corporate lawyers, illustrates the extent to which “the law” is a business like any other. Declining levels of trust in and respect for the profession further indicate that the attendant status of lawyers cannot help but have declined.Footnote 143 The contemporary profession is thus criticised for clinging to a “dying bourgeois ideal”Footnote 144 premised upon disinterest, independence and expertise, all of which can be challenged in today's legal marketplace.
Yet, even within this new normal, traces of the lawyer as status-holder remain. The profession's historic status-marker – regulated title – is being repurposed as a quality mark, offering a competitive advantage to holders. For the Bar, its self-proclaimed tradition of “excellence” has shifted from a largely ideological differentiator to effectively a service guarantee.Footnote 145 A key objection to the SQE proposal was fear on the part of large corporate firms that the internationally recognised “solicitor brand”Footnote 146 might be diluted with the advent of less obviously academic entry standards.Footnote 147 It culminated in a compromise from the SRA, whereby the SQE remains primarily a graduate-entry programme, despite abolishment of the QLD.Footnote 148 This chimes with a claimed preoccupation with firm image in the corporate law sector: partly due to the instrumental value of attracting clients and high-quality recruits, but also because of the “psychic rewards” that a prestigious firm image affords.Footnote 149 The critical profits-per-equity-partner metric might even be construed as the contemporary reimagining of a traditional lawyerly status symbol, more in keeping with the reality of the liberalised legal marketplace (if slightly bombastic).Footnote 150
The notion of law as a status-based profession can also have exclusionary and thus less defensible effects, however. Abel took a dim view of status, arguing that both branches of the profession historically sought to elevate and preserve their status through exclusion, particularly of those who could not afford the costs of qualifying, and of persons deviating from the archetype of the English lawyer (women, ethnic minorities, those from poorer backgrounds).Footnote 151 More recently, “those status symbols have become embarrassments”, with recognition that representativeness is crucial for legitimacy.Footnote 152 “Equality of access”,Footnote 153 as reflected inter alia in the SQE scheme, becomes of key importance. Yet legitimate doubts exist as to whether the ostensible level-playing-field of the SQE will address the concerns that motivated its introduction:Footnote 154 namely, a profession that is disproportionately middle-class and Russell Group-educated, particularly in its upper echelons.Footnote 155 It is, however, more diverse than the Bar.Footnote 156 The question of representativeness raises another issue, linked to our consideration of the legal consumer below: would a more representative profession be a better one from a client perspective?Footnote 157
Merely getting “in” and nominally attaining the requisite status is only half the battle: there is also the question of culture, similarly tied up with status. Although the law does well in gender diversity in terms of numbers, for instance, its culture remains heavily male-oriented – and, indeed, this is portrayed as an indicator of professionalism, namely what women sign up for when they obtain the status of lawyer.Footnote 158 Accordingly, even if the law has lost some of its external distinctiveness in comparison with other professions and trades, the perceived status and role of the lawyer may continue to have internal resonance, in shaping how lawyers view and what they expect from each other. This is supported by empirical work on “millennial” lawyers in England, who associate closely with traditional legal professional values, despite the superficially different characteristics of this cohort.Footnote 159
Finally, lingering perceptions of status might explain the continuing popularity of the profession despite current levels of oversupplyFootnote 160 and thus the comparatively poor career prospects for new entrants. Yet it might also be queried whether the well-known – although by no means universally realised – pecuniary rewards associated with the profession could have the perverse effect of diminishing this underlying status longer-term, if new entrants join purely “for the money” rather than any nominal higher calling. Susskind noted a paradox of the contemporary legal profession: many of today's highest-earners did not anticipate these rewards at entry, whereas many joining today expect rewards that cannot be realised.Footnote 161 Paterson described the problem succinctly—“greed.”Footnote 162
2. Lawyers as suppliers
This bring us to the notion of the lawyer as a supplier of services, fulfilling clients’ legal needs or wants. Such a conceptualisation coincides with liberalisation in two dimensions. First, by removing barriers to entry and practice, liberalisation increases overall levels of supply, whether offered by lawyers or by non-lawyers providing substitutable products. Second, in many areas of practice, greater competitive pressure is prompting a fundamental rethinking and reorganisation of how services are supplied.
What does it mean to conceive of the lawyer essentially as supplier of a fungible commodity? The departure from regulation by title, arguably, marks a shift in understanding from the lawyer as “expert” to that of “service-provider”, competing, indeed, for business in many areas with non-lawyers. As the Clementi Review recognised, the barriers between formally different categories of lawyer have become more porous and less distinct.Footnote 163 In tandem, the classic measure of a lawyer's worth – the billable hour – is headed for extinction within swathes of the profession: shifting the emphasis from the cost of the input (the lawyer's time) to value of their output.Footnote 164 The “business” of being a lawyer today, moreover, does not merely encompass the provision of legal services sensu stricto: the Clementi Review, for instance, placed almost equivalent weight and value on the quality of business services provided by legal professionals as on their legal advice as such.Footnote 165
Yet expansion of entry into the profession coupled with a retreat from the sole-practitioner model leads to stratification on other bases.Footnote 166 These include distinctions in terms of material rewards, power and status;Footnote 167 fragmentation between corporate and private client work;Footnote 168 and stratification within ostensibly similar groupings, such as the emergence of a less prestigious category of salaried rather than equity partner in large London firms.Footnote 169 Francis accordingly construed liberalisation as antithetical to any conception of the legal sector as a “profession” as a single whole, insofar as its constituents face increasingly vigorous pressures that pull them in different directions.Footnote 170 Thus, even if we speak of the profession generally as suppliers of legal services, the products that different categories of lawyers provide are substitutable only to a limited extent. As the LETR recognised, the array of different career paths for lawyers today may call into question the value of “portmanteau” qualifications like the solicitor and barrister titles.Footnote 171 Yet critics of the SQE argue that the proposal may heighten this process of fragmentation, by replacing the professional ideal of a common educational experience with induction into the culture of a specific organisation.Footnote 172
A point that follows is the extent to which this conception of the lawyer qua supplier is consistent with ethical and/or social service dimensions of its role. It was argued above that the commercial realities of practice today mean that no lawyer that wishes to continue in business can remain entirely above the fray of the marketplace. Nonetheless, it seems uncontroversial that, even within liberalised markets, the distinctive social contribution of legal service-providers should not be ignored.Footnote 173 An obvious manifestation is the continuing presence of professional regulation both over certain activities and providers, with little suggestion that regulatory controls ought to be removed in any wholesale manner. Thus the quid pro quo for the claimed competitive advantage provided by the registered title “brands” is a more restrictive trading environment, whereby suppliers have less wiggle room to cut costs or offer innovative products.Footnote 174 Perhaps unsurprisingly, larger firms appear to be better equipped at negotiating (and staying within) regulatory hurdles,Footnote 175 suggesting that there may be economies of scale in compliance.Footnote 176
Yet, even when acting within existing regulatory obligations, difficult questions arise for the lawyer operating qua businessman/technician versus qua professional/counsellor: about what has been termed “the profession's ‘moral compass’”.Footnote 177 Kershaw and Moorhead use the role of Magic Circle firm Linklaters in the collapse of Lehman Brothers to argue persuasively for greater professional responsibility in respect of practices that might be strictly legal but clearly contravene the public interest.Footnote 178 Yet they acknowledge that creativity and zeal are often precisely what corporate clients look for,Footnote 179 creating a risk that virtuousness might demolish a firm's bottom line. A lawyer doing private client work may similarly face a dilemma where the best outcome for the client, broadly understood, results in the lawyer herself losing work, for example encouraging reconciliation over divorce.Footnote 180 The negative effects of cuts to criminal legal aid have been noted but bear repeating; resulting in work patterns that make defence practitioners themselves doubt the fairness of proceedings.Footnote 181 Moreover, viewing the lawyer merely as a technician who completes discrete pieces of work is, arguably, to neglect her obligation towards the progressive development and improvement of the law generally.Footnote 182 Although lawyers today remain committed to serving their clients, it is unclear to what extent they are, and should be expected to remain, committed to serving the wider public interest in addition.Footnote 183 Thus, viewing the legal profession solely in “supplier” terms is difficult to square with Sanders’ definition of lawyering as a profession which “requires the deployment of skills and knowledge with a sense of values and of what can realistically and justly be achieved”.Footnote 184
3. Lawyers as competitors
Implicit in conceptualising the lawyer as supplier is that she is also a competitor, vying for business with providers of substitutable services. Legal liberalisation as a whole represents a rejection of historic arguments that dignity and ethics restrict the scope for (overt) competition in legal services.Footnote 185 The profession, traditionally, evinced hostility towards direct solicitation of business, partly due to a desire to maintain the dignity – and thus prestige – of the profession, and partly due to a self-interested belief that competition was irrelevant for professional services.Footnote 186 Such squeamishness has been largely abandoned, with solicitors permitted to advertise since removal of the conveyancing monopoly in the 1980s,Footnote 187 and direct access to barristers allowed since 2004.Footnote 188 Yet legal services markets remain far from the model of perfect competition.Footnote 189 Such difficulties are more acute in the private and small business client segments than in markets serving large corporate clients, as explained below. Several aspects of the competitive dynamics of legal services markets generally are nonetheless noteworthy.
The first is that, as lawyers compete more vigorously and overtly, issues of price, quality, choice and innovation in services provision – and not merely of access – gain importance. In practice areas where commoditisation is commonplace, such as conveyancing, price competition is most vigorous. For more complex issues, like divorce, clients may be more concerned about the quality of representation (or at least face more dispersed pricing).Footnote 190 There is, moreover, acknowledgement that quality of services provision can vary: that clients ultimately “get what they pay for”, even if this means that lower-quality lawyering may have knock-on negative effects for a client's legal position.Footnote 191 The most extreme manifestation of this is for legal aid recipients, who increasingly receive provision of the lowest common denominator if they receive any at all. Yet many lawyers working in fields affected by legal aid cuts have reacted in line with what economic theory suggests should be the supplier response, by innovating and commoditising provision to cut costs.Footnote 192
Yet, even if lawyers are increasingly required to consider issues of efficiency in how they serve clients, actually competing in legal services is not straightforward. Particularly for non-corporate clients, it can be difficult to drum up profitable demand for unmet legal need, as opposed to benefitting from increased demand generated by external forces (e.g. increased homeownership and divorce).Footnote 193 Currently underserved clients are often the least attractive to service-providers due to their limited means.Footnote 194 Undoubtedly a hangover from pre-liberalised more genteel times, many lawyers have a distinct preference for, say, public legal education (a particularly ineffective form of demand creation) rather than touting for business (the most effective strategy).Footnote 195 At the top of the profession, selling legal services remains individually driven: lawyers who are perceived by powerful clients as particularly effective can extract a premium, whether as highly paid barristers or within their firms (or by moving to another firm).Footnote 196 Yet, at the other end of the spectrum – publicly funded work – legal professionals face immense and capricious (to some extent) countervailing buyer-power, where the political rhetoric of “tough choices”Footnote 197 translates into the near-evisceration of certain practice areas, and the fostering of a dog-eat-dog mentality in others. The shift towards a liberalised model thus generates winners and losers: corporate lawyers and those associated with the City benefit, while lawyers in the public sector lose out.Footnote 198
This raises a further consideration, namely the question of potential oversupply in legal services markets, and the extent to which the market mechanism can self-correct in response. In theory, under competition, market forces impact the rate of supply,Footnote 199 and this is conceivably the most proper means to determine the appropriate level of provision.Footnote 200 Yet there are two difficulties with this narrative. First, despite being “a buyers’ market”Footnote 201 at point of entry, it simply does not reflect current conditions. While the growth in undergraduate legal education introduced a new, not-insignificant entry barrier (a three-year tertiary qualification), it also led to a greatly expanded profession by opening clear entry paths.Footnote 202 At the professional qualification stage, the LETR and overarching approach of the LSB have been described as “fiercely neoliberal”,Footnote 203 seeking to minimise entry requirements in the belief that a well-functioning marketplace will enable consumers to locate and employ professionals with the necessary competences. This is despite the fact that the LETR repeatedly recognised problems of “oversupply”,Footnote 204 albeit it suggested that the issue was one of too many students completing professional training (BPTC/LPC) rather than excess at the vocational training stage.Footnote 205 The view outside the profession is that, while high numbers of lawyers create problems for those trying to operate profitably, this is unproblematic for the public at large.Footnote 206 Yet it may be questioned whether lowering barriers to entry is necessarily welfare-enhancing, not least for individuals who might be enticed to join the profession, where longer-term overall employment prospects are hardly buoyantFootnote 207 and where demonstrable competence is an important marker of quality.Footnote 208
Second, conversely, there is evidence that competitive pressure, and its attendant negative impacts on the quality of professional life in affected practice areas, results in lawyers exiting the profession after qualification. The – mercifully abandoned – Grayling legal aid reforms were premised precisely on the desirability of a leaner, more cut-throat criminal defence sector,Footnote 209 while cuts to funding for civil and family matters similarly impact adversely on those branches (not to mention their clients).Footnote 210 The publicly funded Bar is claimed to be “on its last legs”,Footnote 211 while defence solicitors face “extinction”.Footnote 212 The difficulty is that, although retrenchment alleviates overall levels of oversupply, it risks creating serious problems of access-to-justice in affected markets.Footnote 213 The continued influx of new entrants presents no solution, as lawyers are understandably reluctant to enter dysfunctional practice areas, which frequently, moreover, do not have the resources to support their training.Footnote 214 Such disequilibrium returns us to the suggestion in Section III that some degree of market failure may be inherent in the legal services sector: thus requiring heightened (or at least revitalised) state intervention to ensure sufficient provision in the public interest.
B. The Faces of the Legal Consumer
Having considered how liberalisation changes our view of the legal profession, we turn to the different faces of the legal consumer in today's commercialised – but also stratified – marketplace. The term “demand” is used as shorthand for the array of clients and their diverse problems that are addressed by the legal market.Footnote 215 The notion relates to that of a “justiciable problem”, namely a problem raising legal issues, whether or not recognised as such by individuals facing it, and whether or not any action taken to address it involves lawyers or legal processes.Footnote 216 When it comes to legal services, there is a legitimate question of who should define demand:Footnote 217 whether suppliers, who profit from providing legal solutions to social problems regardless of whether law offers the optimal recourse; or consumers, who are often under-aware of how their problems might benefit from a legal disposition. More pertinently, demand can be compared to the concept of “legal need”, that is, circumstances where an individual has an issue that they cannot solve themselves, but would be helped by professional assistance.Footnote 218 Legal need may be met (i.e. the issue is resolved through provision of useful help) or unmet (i.e. the issue is not resolved adequately, either due to an absence of support or to unhelpful support).Footnote 219 Not every justiciable problem translates into legal need, meaning that it would be wasteful to include all such problems within the outer reaches of the notion of demand in legal services markets. A certain degree of unmet need may be a “permanent condition”, furthermore, insofar as there will always be people with legal issues who, deliberately, unwittingly or unavoidably, fail to access legal services to resolve them.Footnote 220 Yet we can reasonably include all legal need, whether met or unmet, within the definition of potential demand. Additionally, while the language of legal need is associated with the access-to-justice literature and thus focuses on individuals, the legal sector in England and Wales provides services to a wide variety of corporate clients, whose legal needs revolve around business obligations and advantages rather than personal plight.
Several overarching themes are noteworthy. First, a consumer's willingness to pay for legal services depends upon both their means and the anticipated benefit arising from the service in relation to its cost.Footnote 221 Second, there is apparently insurmountable value in personal experience when purchasing legal services, whether at the corporate or individual level:Footnote 222 “personal networks, trust and the markets are intimately interlinked in the professional services world.”Footnote 223 Beyond these general observations, consumers have very different experiences when sourcing legal services.
1. Large corporate clients
Large corporate clients are at the apex of consumer sovereignty. Their business is typically high in value; they engage in repeat purchasing; and there is less concern about information asymmetries as such entities are usually advised by in-house counsel. Thus when it comes to wealthy corporate clients, the conventional view that the professional has the upper-hand does not hold true, as clients can exert significant control – and economic pressure – over the professional–client relationship.Footnote 224 This is seen, inter alia, in the growing use of fixed and capped fees and discounts,Footnote 225 reflecting an entrepreneurial understanding of the law firm whereby lawyers are expected to accept and take efforts to mitigate business risks.Footnote 226 Merely being a legal adviser is insufficient, moreover, meaning that lawyers must demonstrate effective commercial awareness.Footnote 227 Corporate clients also benefit from innovations in service delivery in a way that private clients are not (yet) doing. Their greatest risk, conversely, may be intra-firm agency problems, insofar as external counsel are typically instructed by managers whose personal interests as employees may not align fully with the interests of the corporation.Footnote 228
Two facets of the corporate legal consumer are significant. The first is that they shop around in an increasingly globalised marketplace, reflected both in the arrival of overseas (predominantly American) firms in London, and in the expansion of UK-based firms into other jurisdictions.Footnote 229 On the one hand, this increases levels of supply and competitive pressure, forcing providers to work hard to attract and keep clients. On the other, it may facilitate the emergence of a small global elite of law firms, which can resist the pressures for change that are anticipated to alter significantly the day-to-day working life of smaller competitors.Footnote 230
A second facet of concern stems from the potential disjuncture between the corporate lawyer's business interests and her wider societal obligations. Under the auspices of lawyerly “zeal”, corporate law aligns the profession's commercial interests with their clients’ interests.Footnote 231 Given this reality, Loughrey argues that the current regulatory framework, which focuses on ensuring that lawyers do not harm clients by acting contrary to their interests, over- and under-regulates corporate firms. The enhanced ability of corporate clients to monitor their lawyers and impose countervailing buyer-power means that, in practice, such problems are less likely to arise. Yet there is little within the existing regulatory framework to ensure independence from clients, meaning that solicitors are under-deterred from engaging in socially harmful behaviour to advance clients’ immediate interests.Footnote 232
2. Privately funded individual clients (including SMEs)
We turn to privately funded individual clients, a category that incorporates small and medium-sized enterprises (SMEs) whose profile as purchasers is similar to private clients.Footnote 233 It was in this market that the CMA Study concluded that competition does not work well. This was, in part, due to the contrary nature, in some ways, of the typical consumer, who cannot properly engage with the market and does not reap its potential benefits. Consumers here often fail to recognise justiciable problems as potentially “legal” in nature; they place significant (potentially undue) reliance on informal advice/recommendations when sourcing representation; and they are turned off by overt competition like branding or advertising.Footnote 234 “Shopping around” can be difficult: consumers face high search costs; comparable price and quality information is scarce; and the prevalence of contingency fees can dull willingness to comparison-shop.Footnote 235 Whereas large corporate clients assisted by in-house counsel are in a better position to judge the quality of legal services ex ante, private clients without legal experience are dependent on external markers of quality, such as the educational achievements of service-providers (e.g. the “solicitor brand”).Footnote 236 Such consumers place considerable value on regulated title and will pay a premium for this privilege, but there are concerns that consumers do not understand its implications: more specifically, consumers think that lawyers are more highly regulated than is the case.Footnote 237 The limited impact of the remedies implemented after the CMA Study suggests that activating consumer engagement – that is, encouraging clients to become more proactive and less deferential – is not straightforward. A question is thus whether further top-down intervention is desirable, perhaps even a degree of re-regulation, as occurred in energy markets with similar issues of seemingly intractable consumer disengagement.Footnote 238
3. Publicly funded clients
Finally, we consider publicly funded clients, namely recipients of legal aid. Here, “demand” is split between the immediate beneficiary of and ultimate payor for legal services. In contradistinction to privately funded clients, the scope of what is recognised as “legitimate” demand has contracted rapidly in the last decade. Several aspects of this contraction are noteworthy.
To start with, while it is irrefutable that indigent individuals experience genuine and pressing legal need, much of the negative rhetoric is premised on an essentially discretionary understanding of demand. Historically, indigent provision was treated as an act of altruism, something for which recipients ought to be grateful. Instead of being a means by which to level the playing field of access-to-justice, it was considered a positive – and implicitly optional – benefit.Footnote 239 Prior to the introduction of generalised legal aid in 1949, a principal objection was that facilitating access might encourage needless and wasteful litigation.Footnote 240 The renewed attack on aid from the 1980s onwards took a similar tack, premised upon scepticism about “supplier-induced demand” (i.e. manufactured by the legal profession), which it was claimed artificially inflated the size, complexity and cost of the publicly funded caseload.Footnote 241
This notion, that indigent demand is less authentic and more open to question, finds expression in recent restructuring. The Clarke reforms, culminating in LASPO12, essentially introduced a naughty-versus-nice ranking of permissible legal needs: deigning to meet only a small fraction of recognised need in the civil and family spheres. The Grayling proposals sought to remove almost all choice from criminal aid recipients as the necessary trade-off for improved value-for-money from the purchaser perspective, an approach that contrasts starkly with the direct focus on choice in the CMA Study. Underpinning these reforms is the theme of personal responsibility: the idea that individuals ought to “to take greater personal responsibility for their problems”Footnote 242 rather than resorting to (state-funded) legal avenues of redress.Footnote 243 Conversely, the notion of legal representation as an entitlement for individuals has been largely rejected.Footnote 244
The perceived neoliberal tenor of such arguments has been criticised.Footnote 245 There is ambiguity, however, whether paternalism or more basic libertarianism is the key motivation. In any event, between the questions of what the state considers a person ought to require in terms of legal need and what it considers prudent to provide, there is little consideration of the concept of legal need from the perspective of individuals actually experiencing such need, suggesting that some categories of demand are deemed more equal than others. Moreover, the particularly narrow – literal, even – understanding of vulnerability that emerges is at odds with that deployed in other sectors, such as energy.Footnote 246 The disheartening explanation is, perhaps, that legal aid recipients do not command much public sympathy, compared with recipients of other free-at-point-of-use public services like healthcare or education.
This brings us to the inescapably political nature of legal aid, which is essentially about fairness in (re)distribution.Footnote 247 Unsurprisingly, the perceived acceptability of rationing differs depending upon whether one adopts the perspective of recipient or payor.Footnote 248 For those for whom legal aid is a fundamental access-to-justice mechanism, the subordination of justice to economicsFootnote 249 results in suboptimal protection of basic rights and social entitlements.Footnote 250 Yet, public money is not endless, while juxtaposing legal aid with health and education rarely does recipients any favours. (The past decade has seen cuts to all three.) Paterson thus concluded that demand for legal aid will always outstrip supply, so that the pertinent question is prioritisation.Footnote 251 Moreover, spending on aid does not translate automatically into provision of justice:Footnote 252 it concerns access but not necessarily dispensation of justice.Footnote 253
Perhaps the key concern, ultimately, is whether good substitutes for state-funded legal services exist for previously eligible clients: whether through more competitively priced private offerings, effective do-it-yourself representation or alternative dispute resolution mechanisms. The available evidence is unencouraging, however.Footnote 254 Although existing efforts to diversify aid provision are critiqued as “lacking in imagination”,Footnote 255 the current situation serves as an important reminder that market-based mechanisms can be “a seriously inadequate means of protecting rights to equal citizenship because we do not come to markets as equals”.Footnote 256 Legal liberalisation has clear limits from this perspective.
This article traced the contours and explored the implications of liberalisation of the legal profession in England and Wales. Our starting premise was that the process involves a reimagining of the professional–client relationship as the interaction of supply and demand for legal services. Lawyers are subject to increasingly insistent market forces, clients are encouraged to shop around, and value-for-money is emerging as a contemporary “golden thread” of the justice system. Yet the language of supply and demand, arguably, both over- and understates the case here. A highly profitable legal services industry undoubtedly exists, yet the dynamics of competition do not work well in many segments. Lawyers, moreover, are more than mere suppliers: they are vital cogs within the apparatus of justice, meaning that unmet demand has negative ripple effects beyond market disequilibrium.
The purpose of this piece was not to argue for or against liberalisation. There is merit to both the free competition and access-to-justice perspectives considered in Section III. Yet the arguments from both perspectives have limitations, as illustrated by our exploration of the deeper implications of liberalisation in Section V. Few outside the profession would fail to see advantages in a more responsive, accountable legal sector, where the trope of the intimidating out-of-touch lawyer no longer dominates. It would, however, be naïve to think that greater competition fixes all ills. Both lawyers and plumbers provide vital services, but the qualitatively distinct nature of the law negates any assumption that the same market circumstances are optimal for the sale of each. Throughout this article, we encountered instances where the free market logic of “you get what you pay for” delivers suboptimal results: not only in terms of protecting clients from their lawyers, but also protecting lawyers from their clients, and indeed ensuring a degree of responsibility towards society and the proper development of the law as a whole. The debacle of legal aid, moreover, cautions that, even if “more market” is desirable, this does not imply a concomitant need for “less state”.
Contemporary liberalisation efforts represent important milestones within the ongoing evolution of the legal profession. The profession must and undoubtedly will adapt to the challenges posed – and opportunities offered – by greater competition, heterogeneity and flexibility. In doing so, however, the distinctiveness of what lawyers do, and of why clients access legal services, should not be forgotten. The ultimate promise of liberalisation is to harness the power of the market to secure value-for-money alongside access-to-justice. Yet the transformation from counsellor to competitor, although perhaps inevitable, has not been seamless thus far.