Written by a leading expert in the field with extensive first-hand experience of all of the legal issues that affect practice, and with specialist contributors, the result is an authoritative, wide-ranging and accessible work that provides real insights into the legal issues and current complexities of legal practice. It will help practitioners mitigate the increasing risks they face providing practical clarity as well as authoritative legal analysis.
The work covers:
- Lawyers’ legal duties
- The business of law
It looks at important issues such as:
The Law of Legal Services
- Business structures and barrister entity regulation
- Misconduct and tribunals
- Obligations to clients including contractual terms, fiduciary duties, negligence and the Ombudsman
- Compliance including COLPs, COFAs and anti-money laundering
- Indemnity insurance
- Fees and costs
- Protecting goodwill including restrictive covenants and electronic media
- Financial stability issues
will be a key reference work for all legal practices and will provide a ready answer to many legal issues that crop up in modern practice. It will also provide, for anyone involved in the management of legal practices, essential knowledge of the legal risks they face.Supporting Website
For regular free updates to the book, articles, and links to essential materials, visit http://legalserviceslaw.co.uk
Whether or not we are lawyers, we are all veryconscious of the importance of the rule of law, and rightly so. The topic ismuch discussed, partly thanks to the fact that this year is the 800thanniversary of the sealing of Magna Carta. Legal services are unique in that,unlike any other form of professional practice or business, they have a vitalconstitutional rule of law role, as well as a social and commercial function.
Accordingly, those who practise law are understandably expected to beparticularly aware of the principles and rules which govern the exercise oftheir profession. And, quite apart from that, given that it is the job oflawyers to advise others in relation to principles and rules, the publicjustifiably expects lawyers to know the principles and rules governing theirown profession.
For that reason alone, a modern, accessible,clear and up-to-date guide to the law of legal services is to be warmlywelcomed. However, there are other important reasons for enthusiasticallywelcoming John Gould’s book.
Over the past twenty years, in academic,professional, business, media and governmental circles, there has been a fastincreasing awareness of the concept of risk. The importance of risk in allareas of our lives, whether public or private, is becoming ever more plain.There are perhaps four aspects of risk, namely identification, assessment,avoidance and mitigation. Experience rapidly teaches us that many of ourassumptions, instincts and reactions in relation to all four aspects of riskare unreliable. Accordingly, it is essential that, both individually and as asociety, we focus on all aspects of risk. This is nowhere more true than inrelation to professional work, and legal work in particular, bearing in mind alawyer’s duty both to his or her client and to the community.
The reaction of government to the increasingawareness of risk has been to step up regulation and in the past fifteen years,perhaps particularly following the problems in the financial markets in 2008,regulation has played an increasingly demanding role in the lives ofprofessional and business people. The demands are particularly great for thelegal profession, not least because, of all occupations, lawyers would berightly regarded as having least excuse for not complying with their ownregulatory code. The function of lawyers is to deal with legal issues, and theytherefore have nowhere much to hide if they fail to know of or observe theirown regulatory rules.
Coupled with the growing awareness of risk, andno doubt contributing to that growing awareness, is a fast increase in thecomplexity of almost all aspects of life. Much of the increase in complexity isattributable, both directly and indirectly, to the explosion in thecapabilities and availability of information technology. The increase incomplexity renders the identification, assessment, avoidance and mitigation ofrisk all the more important and all the more difficult. The law is not by anymeans exempt from the general increase in complexity, and accordingly topicssuch as fees, insurance and professional negligence have become far moresophisticated and technical than they used to be. Increased complexity also, ofcourse, renders the need for regulation all the greater, but at the same timeit results in regulation which itself is more complex.
In suchan environment, it seems to me that any lawyer would be very well advised toensure that he or she has ready access to guidance as to how legal practiceshould be conducted and how legal services should be provided. There is a realneed for an authoritative, full and user-friendly guide to the law of legalservices, and it seems to me that John Gould has provided just such a guide,and he is to be thanked and congratulated for doing so.
The book is structured in a clear and sensibleway. The first 40% or so explains the regulatory, compliance and disciplinarysystems, and the remainder of the book deals with the essential features oflegal practice, including client contract, duties, negligence, fees and the businessof practice. In fact, my impression is that it contains all that a professionallawyer needs to know and much of which it may not have occurred to him or herto ask.
LordNeuberger of Abbotsbury, President of the Supreme Court
Are accountants disrupting the legal services market?
Published 14 January 2016, Economia
There is much hype surrounding the significance of accountancy firms entering the legal market. Of course, the idea is not new. Fifteen years ago, Anderson Legal was said to be the ninth largest global law firm by fee income. It had an associated English law firm, Garretts, which grew to around 200 lawyers. Then the Enron scandal and the Sarbanes-Oxley Act put an end for a time to Big Four ambitions of dominating the legal market. The advent of alternative business structures (“ABSs”) (enabling non-laywer ownership and management) may be a catalyst for further expansion
Regulatory changes over the last 18 months have undoubtedly created new opportunities.
ICAEW has begun regulating probate activities, which were previously reserved to lawyers.
Solicitors employed by accountancy firms, which are authorised to offer probate services, can also offer any non-reserved legal services directly to the public. Reserved activities are litigation, advocacy, reserved instrument activities (conveyancing) and notarial activities. Previously solicitors working in accountancy firms were bound by the rules for in-house solicitors and could only advise their employer.
The solicitors regulation authority (SRA) has amended its rules to facilitate multi-disciplinary practices. The SRA will not regulate non-reserved “legal work” (such as tax advice) led by accountants, which it considers is already adequately regulated by ICAEW.
The SRA has also relaxed the “separate business rule” enabling solicitors and authorised SRA firms to own and manage separate businesses providing non-reserved legal services. This enables solicitors to own businesses offering accountancy services.
Over 100 practices have been authorised by ICAEW to undertake probate work. A number of accountancy firms are authorised by the SRA as ABSs. These include Ernst & Young and KPMG. PricewaterhouseCoopers Legal LLP also has an ABS licence, although it existed previously as an SRA authorised firm.
So, where will it all lead?
A statement of intent by the Big Four?
A recent report by James Tsolakis of RBS suggested that the Big Four are gaining market share from mid-tier law firms and predicted that “the smart money…is on accountants going head-to-head with the established legal order over lucrative capital markets and transactional activity once they have taken sufficient market share from the mid-tier.”
It remains to be seen whether predictions of seismic change are more about marketing hype than imminent reality for the existing legal market order. Law firms would, however, be well advised to pay attention to the pace and extent of change.
Large accountancy firms may be able to market some attractive sounding propositions:
- A client might prefer to purchase legal services from their existing provider of non-legal services.
- Accountants may have a more continuous relationship with clients and therefore be better placed than law firms when opportunities to provide legal services arise.
- For some corporate or commercial transactions, a single provider of both legal and non-legal services might lead to better integration.
- The ability to provide tax advice through a lawyer entity would engage the legal professional privilege which has not been otherwise available to accountants.
- Providing more services under an existing powerful brand levers more profit from that brand.
- An existing global reach and infrastructure would allow competition in other markets without the start-up costs involved for an expanding law firm.
But what about opportunities below the level of the global firm?
It has long been possible for accountants to provide non-reserved legal services such as commercial or employment law advice or inheritance tax planning without any regulatory constraint. They can now employ a solicitor to assist. In relation to reserved activity, probate can be undertaken without becoming involved with the lawyer’s regulator. For smaller practices particularly, probate work may look attractive.
In relation to the accounting and administrative aspects of probate, accountants are increasingly likely to be competing with their own clients rather than lawyers. The trend is very much towards clients undertaking simple probates themselves. Other potentially more lucrative aspects of winding-up estates, such as conveyancing, will still need a lawyer. Complex estates or those involving cross border issues may represent a significant risk for the inexperienced.
More generally a note of caution is required in relation to managing conflicts of interest appropriately and in accordance with the relevant professional rules. This is particularly acute in light of past concerns in relation to independence, which the changes introduced as a result of Sarbanes-Oxley were designed to fix.
Lawyers have not to date shown much inclination to offer accountancy services although (with the exception of audit) there is no equivalent to reserved legal activity, which prevents them from doing so. Established firms of both accountants and lawyers will for the foreseeable future have the advantages of both experience and critical mass in providing their respective services. Many firms are frequent referrers of work to each other as non-competitors. It may well be that the medium-term future will be more about collaboration than competition.
John Gould is senior partner and Michael Stacey is an associate at Russell-Cooke LLP. John is the author of The Law of Legal Services, published by Jordan Publishing (to which Michael also contributed) (www.legalserviceslaw.co.uk)
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