Liberalisation of legal services in Europe: progress and prospects

Abstract

The usual excuse for regulation is the failure of market provision. This paper examines legal services and suggests that, in the case of provision of commercial legal services to corporate clients, true events of market failure, to support the case for regulation, and more particularly self-regulation, are hard to locate. It further argues that the market for legal services is heavily stratified with a commercial legal services market effectively operating quite separately to that of professional legal services for private clients. In consequence, it may be more effective and proportionate to adopt differentiated strategies of regulation. This might be achieved by shifting the focus of regulation away from the individual practitioner, as is historically the case, towards law firms as such. This simple step, it is suggested, could facilitate much greater liberalisation of the market for legal services. This proposal is explored with particular reference to freedom of services within the European single market and, as a backdrop to the paper, progress to date in facilitating cross-border legal services in Europe is reviewed.

Attorneys and Attorney Tariff in Slovenia

“…Takšna primerjava profesionalnih storitev je vsebinsko popolnoma neprimerna, saj posebnosti segmentov uporabnikov odvetniških storitev ter izjemne specifike odvetniškega trga privedejo do napačnih ugotovitev. Izkušnje namreč kažejo, da deregulacija pogosto prinaša pozitivne učinke v segmentu odvetniških storitev za podjetja, medtem ko v segmentu fizičnih oseb in manjših podjetij praviloma vodi v poslabšanje kakovosti storitev ter zmanjšanje dostopnosti efektivnega pravnega varstva (Lee, 2010).…”

“…Raziskave namreč kažejo (Lee, 2010), da je pri tehtanju koristi in stroškov liberalizacije nujna previdna obravnava najbolj ranljivih uporabnikov odvetniških storitev, kot so fizične osebe in manjša podjetja. Slednji imajo manjše možnosti za izbiro med ponudniki in manjšo sposobnost za oceno kakovosti ponujenih storitev.…”

Changing regulation and the future of the professional partnership: the case of the Legal Services Act, 2007 in England and Wales

“…First, in England and Wales as elsewhere, lawyers were restricted to practicing as solo practitioners or in unlimited liability partnerships. These organizational forms were perceived to be most conducive to minimizing risks arising from the asymmetry of information between professionals and clients (Lee, 2010) while also providing a signal of quality to clients (Regan, 2007). However, in light of increased litigation by clients and the costs of personal indemnity insurance (Quack and Schü ler 2015, 57), the UK removed this following the enactment of the 2001 Limited Liabilities Partnership Act.…”

Professionalism under the Legal Services Act 2007

“…Demanding justification for any measure that might restrict supply of professional services the Office of Fair Trading whittled away remaining differences between the professions, for example, direct access by lay clients to approved barristers (Flood and Whyte, 2009). Other influences on the standardisation of practice modes were international legal practice (Faulconbridge et al, 2011) and European competition policy (Lee, 2010).…”

“…The competitive advantages available to highly capitalised, multi-disciplinary organisations might concern US lawyers (Davis, 2010) but it is unclear whether ABS will be able to exploit any such advantages (Schneyer, 2010). Legal professions, even in Europe, are resisting multidisciplinary practice (Lee, 2010) and in Wouters (2002) the European Court held that, while European Community competition laws apply, they may reasonably restrict new business forms considered incompatible with the proper practice of law.…”