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  • Law of Legal Services, The
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Legal Services Law - Companion Website

LSL Resource

Law of Legal Services, The


A major new work covering the law relating to the provision of legal services.

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:
  • Regulation
  • Lawyers’ legal duties
  • The business of law

It looks at important issues such as:
  • 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
The Law of Legal Services 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/

Part A – Regulation

The Regulatory Framework
  • Introduction
  • Legal Services Act 2007
    • Protecting the consumer
    • The Legal Services Board
    • Activity based regulation
    • The reserved legal activities
    • Exempt provision of reserved legal activities
    • Approved Regulators and Licensing Authorities
    • Entity regulation
    • Transitional arrangements for non-commercial bodies
    • Alternative Business Structures
  • Other activity based statutory schemes
    • Claims management services
    • Immigration services
    • Financial Services
    • Consumer credit
    • Anti-money laundering requirements
    • Restrictions on separate businesses
  • Profession based regulation
    • Solicitors
    • Barristers
    • Licensed Conveyancers
    • Patent Attorneys & Trade Mark Attorneys
    • Notaries
  • Complaints handling and the Legal Ombudsman
    • Jurisdiction
    • Powers
    • Challenges to Ombudsman decisions
  • Self-regulatory schemes
  • Solicitors Regulation Authority
    • Qualification requirements
    • Practise rights
    • Practising certificates
    • Permitted modes of practice
    • In-house practice
    • The authorisation of entities
    • Legal Services Bodies (Legal Disciplinary Practices)
    • Multi-Disciplinary Practices
    • Entity authorisation process
    • Compliance officers
    • Approval of owners and managers
    • Approval of corporate owners
    • Criteria for the authorisation of entities
    • Ongoing compliance
    • Supervision and Training requirements
    • Waivers
  • Bar Standards Board
    • Qualification requirements
    • Pupillage
    • Practise Rights
    • Entity regulation
  • Council for Licensed Conveyancers
    • Qualification requirements
    • Practise rights
    • Entity regulation
  • ILEX Professional Standards
    • Qualification requirements
    • Practise rights
    • Entity regulation
  • Intellectual Property Regulation Board
    • Qualification requirements
    • Practise rights
    • Entity regulation
  • Faculty Office
    • Qualification requirements
    • Practise rights
  • Costs Lawyers Standards Board
    • Qualification requirements
    • Practise rights
  • Institute of Chartered Accountants of England & Wales
Codes and Compliance (including Money Laundering)
  • Introduction
    • Dealing with clients
    • Client care: solicitors
    • Client care: barristers
    • Provision of Services Regulations 2009
    • The Consumer Contracts Regulations 2013
    • Discrimination and reasonable adjustments
  • Conflicts of interests
    • Solicitors: client conflicts
    • Solicitors: own interest conflicts
    • Solicitors: confidentiality conflicts
    • Barristers
  • Confidentiality and disclosure
    • Solicitors
    • Barristers
    • Overlap with data protection law
  • Duty to the court
    • Solicitors: misleading the court
    • Solicitors: abusive litigation
    • Solicitors: litigation and the court
    • Barristers: the duty to the court
    • Barristers: misleading the court
    • Barristers: witness evidence
    • Barristers: abuse of the role of advocate
  • Undertakings
  • Practice management
    • Solicitors: governance and systems
    • Solicitors: staff and supervision of work
    • Solicitors: referral arrangements
    • Solicitors: client money
    • Solicitors: professional indemnity insurance
    • Solicitors: separate businesses
    • Barristers: governance and systems
    • Barristers: referrals
    • Barristers: public access
    • Practise rights
  • Publicity
    • Solicitors
    • Barristers
  • Financial services
    • Regulated activities
    • Financial promotions
  • Application of the rules
    • In-house lawyers
    • Overseas lawyers
    • Overseas practice
    • Chartered Legal Executives
    • Licensed Conveyancers
    • Other authorised persons
  • Anti-money laundering and the Bribery Act
    • Anti-money laundering legislation
    • Proceeds of Crime Act and the Terrorism Act
    • Bribery Act
  • Introduction
  • Rules and Codes
    • The nature of Codes
    • Strict liability for Rule breaches
  • The Meaning of Misconduct
    • The nature of misconduct
    • Rule breaches and misconduct
    • Negligence and misconduct
    • Professional judgement and misconduct
    • Misconduct and “improper conduct”
    • Misconduct based upon principles
    • Objectives in penalising misconduct
  • The Seriousness of Misconduct
    • Assessing seriousness
    • Dishonesty
    • Criminal offences not limited to dishonesty
    • Premeditation
    • Conspiracy
    • Repetition and duration
    • Positions of trust
    • Motivation
    • Harm
    • Concealment
    • Public confidence
    • Seniority
    • Individuals affected
    • Individual control
    • Discrimination
    • Sentencing
    • Factors other than seriousness
    • Importance of the view of expert tribunal
  • Areas of Misconduct
    • Unauthorised practice
    • Misrepresentation of structures
    • Loss of independence
    • Responsible administration
    • Client account
    • Collateral benefits
    • Overcharging
    • Group compensation claims and intermediaries
    • Conflicts
    • Transactions with clients
    • Confidentiality
    • Insurance
    • Solvency
    • Frauds by clients
    • Duty to the court
    • Dealings with prisoners
    • Dishonesty and integrity
    • Undertakings
    • Communications – offensive letters
    • Dealings with the Regulator
    • Conduct outside of practice
    • Unfitness to practice
  • Responsibility for Others
    • Responsibility of partners
    • Responsibility of COLP/COFA
    • Supervision
Supervision, Investigation and Enforcement
  • Introduction
  • SRA Supervision and Investigation
    • Supervision
    • Investigation
    • Individuals and firms
    • Investigative powers
    • The rule-based powers
    • The statutory powers
    • Disclosure of investigative information to third parties
    • Explanation by the regulated person
    • The report stage
    • Representations following the report
    • The SRA’s duty of care
  • SRA Enforcement
    • Enforcement decisions
    • The disciplinary powers of the SRA
    • SRA Disciplinary Procedure Rules 2011 – Enforcement
    • The statutory framework of practising certificate regulation
    • SRA Practising Regulations 2011
    • Examples of practising certificate conditions
    • Appeals in relation to practising certificates
    • Appeals to the High Court
  • Interventions
    • The nature of intervention
    • The grounds for intervention
    • The grounds for limited intervention
    • The powers exercisable o intervention
    • The statutory trust
    • The practice documents
    • Ancillary court orders
    • The costs of intervention
    • Intervention challenges
    • Time limit
    • The nature of the proceedings
    • The methodology of the court’s decision
    • The balancing exercise
    • Intervention and Human Rights
    • Delayed decisions to intervene
    • Unpaid bills and work in progress
    • Interim injunctions
  • SRA Referral to the Solicitors Disciplinary Tribunal
    • Decision to refer
  • The Bar Standards Board
    • Establishment
    • Supervision
    • Enforcement
    • Entity regulation
  • Licensed Conveyancers
    • Powers
    • The framework of CLC decisions
  • The Intellectual Property Board
  • The Costs Lawyers Standards Board
  • Introduction
  • The Solicitors Disciplinary Tribunal
    • Constitution
    • Absolute privilege
    • Jurisdiction and powers of Tribunal
    • Orders of the Tribunal
    • Appeals from the Tribunal
    • The approach of the court
    • Appeals to the Tribunal instead of the High Court
    • Applications to the Tribunal
    • Certification of a case to answer
    • Further allegations
    • Applications against solicitors’ employees
    • Restoration and ending suspensions
    • Service, directions and listing
    • Case management
    • Evidence
    • Disclosure of documents
    • Evidence from the police
    • Previous findings of record
    • Hearings and findings
    • Publicity
    • Standard of proof
    • Sanctions and penalties
    • Fines and costs
    • Rehearing where the respondent is not present
    • Adjournments
    • Abuse of process
    • Bias
    • Regulatory settlements
    • Appeals to the Tribunal
    • Restoration to the Roll
  • The Jurisdiction of the High Court over Solicitors
  • The Bar Disciplinary Tribunal
    • Constitution
    • Referral of disciplinary charges
    • Procedure to trial
    • Conduct of hearing
    • Sanctions
    • Appeal
    • Costs
    • Publication
  • The Council for Licensed Conveyancers
  • Notaries
  • The Intellectual Property Regulation Board
  • Chartered Institute of Legal Executives
  • Costs Lawyer Standards Board

Part B – Lawyers' Legal Duties

The Client Contract
  • The Solicitors’ Retainer
    • Formalities
    • Contract by conduct
    • Description of services
    • General retainers
    • Inexperienced clients
    • Identifying the client
    • Termination of the client contract
    • Termination by the solicitor
    • Failure to make payments on account
    • Termination by operation of law
  • Particular Types of Client
    • Multiple individuals
    • Agents and other forms of representative
    • Clubs and other unincorporated bodies
    • Companies
    • Children
    • Clients subject to mental incapacity
    • Trustees and executors
    • Trade Unions
    • Insurers
    • Trustee in bankruptcy
    • Liquidators
    • Administrators
    • Partnerships
    • Statutory corporations
  • Solicitors’ Standard Terms
    • Client care information
    • Matters commonly dealt with in standard terms
    • Formalities
    • Charges and payments
    • Control of information
    • Client obligations
    • Risk sharing
    • Complaints and disputes
    • General clauses
  • Barristers’ Standard Terms – The Combar Terms
    • Introduction
    • Formalities
    • Charges and payments
    • Control of information
    • Client/solicitor obligations
    • Risk sharing
    • Termination
    • Authority
  • Barristers and Direct Access
Fiduciary and Other Duties
  • Fiduciary Duties
    • Nature of the duties
    • Other lawyers as fiduciaries
    • Undivided loyalty
    • Fiduciary duties and the client retainer
    • Undue influence and transactions with clients
    • Gifts to a lawyer
    • Use of information and disclosure duties
    • Profits and benefits
    • Fiduciary responsibilities for client funds
    • Conflicts of interest
    • Actual conflict
    • The component parts of conflict
    • Business partner conflicts
    • Joint venturers and company promoter conflicts
    • Lender/borrower conflicts
    • Insurers and insured conflicts
  • Confidentiality
    • The duty of confidence
    • The risk of disclosure
    • Confidentiality and changing employment
    • Confidentiality and merger
    • Confidentiality and inadvertent disclosure
  • Legal Professional Privilege
    • The nature of privilege
    • Loss of LPP
    • Privilege and public authorities
    • Crime/fraud exception
    • SRA investigations and privilege
    • Self-incrimination
    • Required nature of adviser
  • The Enforcement of Undertakings
    • The basis of enforcement
    • Limits on enforceability
    • Disputed undertakings
    • Undertakings and lenders
    • Undertakings outside practice
  • Authority
    • Actual authority
    • Ostensible authority
    • Usual authority
    • Partners, members and directors
    • Lawyer’s warranty of authority
    • Liability for wrongdoing
    • Liability for client account shortage
    • Dishonest employee
    • The position of salaried partners
Lawyers’ Negligence – the Legal Framework
  • Scope of the retainer: ‘What was the solicitor instructed to do?’
    • Limits to scope of work
    • Implied duties in the retainer
    • Involvement of other advisers
    • Relevance of experience and knowledge of the client
    • Division of responsibility between the lawyer and the client
    • Duties to third parties arising from the retainer
  • Standard of care: ‘Were the instructions carried out with due care and skill?’
    • Errors of judgment
    • Hindsight
    • Reliance on advice by Counsel
    • Standard applicable to barristers
  • Compensation: ‘Which losses can be compensated?’
    • What were the losses?
    • Which of those losses were foreseeable and fell within the scope of the lawyer’s duty?
    • Was the lawyer’s breach of duty the cause of the client’s loss?
    • Were there any restrictions on or exclusions of liability?
    • Was there any contributory liability on the part of the client or other advisers?
    • What was the value of any loss of chance?
  • Limitation defences
    • Date of damage
    • Date of knowledge
  • Procedure
    • Pre-action
    • Part 36
    • Proceedings
    • Case management
    • Expert evidence
Negligence Claims and Complaints to the Legal Ombudsman
  • Litigation
    • Missed limitation period
    • Flawed advice
    • Failure to take instructions
    • Failure to comply with the CPR
  • Conveyancing
    • Inadequate pre-contract checks
    • Inadequate advice on planning
    • Drafting errors
    • Legal Ombudsman complaints concerning conveyancing
  • Wills and probate
    • Errors in execution and negligent drafting
    • Failure to take instructions
    • Delay
    • Failing to check capacity
    • Errors in execution
    • Legal Ombudsman complaints concerning wills and probate
  • Other practice areas
  • Legal Ombudsman statistics

Part C - The Business of Law

Indemnity Insurance and Compensation Funds
  • Introduction
  • Solicitors’ insurance
    • History
    • The current scheme
    • Participating insurers
    • The Assigned Risks Pool
    • Extended Indemnity Periods
  • Barristers’ insurance
    • Minimum level of cover
    • Insurance and the "Cab-rank" rule
  • CILEx insurance
  • Licensed Conveyancers’ insurance
    • Limits on self-insured excess
  • Other Professions
    • Patent Attorneys, Trade Mark Attorneys, Costs Lawyers and Notaries
    • Costs Lawyers
    • Notaries
    • Alternative Business Structures and combinations of professions
  • Obtaining insurance
    • Obligations when applying for insurance
    • The role of the Broker
    • Who is the insured?
    • Insured - definitions
    • Limits of insurance - What claims are insured?
  • Exclusions
    • Normal exclusions
    • Dishonesty
    • Corporate dishonesty
    • Condoning dishonesty
    • Sham partnerships
    • Aggregation
  • Other coverage issues
    • In-house, informal advice and advice as part of a voluntary service
    • Closing a firm
    • Takeovers and mergers
    • Notification of claims
    • The insurer’s solvency
    • Practical implications of insurer insolvency
    • Insurers’ entitlement to documents
  • Compensation schemes
    • SRA Compensation Fund
    • The CLC Compensation Fund
    • IPS proposed compensation fund
    • Notaries’ Contingency Fund
Protection of Lawyers’ Goodwill
  • Introduction
  • Interests protectable by contract
    • The principles
    • The client relationship
    • Relationship with referrers
    • Relationship with employees
    • Relationship with suppliers
    • Confidential information
    • Reputation
    • Copyright and know-how
  • The limits of protection
    • The doctrine of restraint of trade
    • Reasonableness between the parties
    • The public interest
    • Contractual provisions applying after termination
    • Contractual provisions applying before termination
    • Principles of construction
  • Implied duties
    • Fidelity
    • Persons owing duties
    • Implied duties of partners, members and directors
    • Conflicting personal interests
    • Preparations for departure
    • Implied duties of employees
    • The right to skills and experience
  • Other protective measures
    • Oblique restraints
    • Gardening leave
    • International issues
    • Injunctions and damages
  • The application of the general principles
    • The limits of precedent
    • The principles applied
  • Cases relating to lawyers
    • Lawyers’ special understanding
    • The relevance of a lawyer’s duties of fidelity and integrity
    • The relevance of an employed lawyer’s specialisation
    • Injunctions and the interests of clients
    • Departmentalised firms
    • Inadvertent dissolution of partnership
    • No implied covenants in a solicitor’s contract
    • Solicitors and geographical restrictions
    • A lawyer’s fiduciary and other duties
    • The modern overview in relation to solicitors
  • Specific issues
    • The protection of confidential information
    • Databases
    • Teams
    • Barristers
    • Mergers, insolvencies and acquisitions
    • The dissolution of partnerships
    • Web rights
    • Meta tags
    • Adwords
    • Domain names
    • Case management and other software
    • Copyright and trade marks
    • Passing off
    • Defamation and harassment
Structures, Fees and Financial Stability

Business Structures
  • Introduction
  • Solicitors
    • Limited liability
    • Separation of ownership and control
    • Nature of rights and obligations
    • Employment status
    • Tax
    • Conversion Issues
  • Barristers
    • The conventional Chambers model
    • The constitution
    • Contractual capacity and the use of service companies
    • Intellectual property
    • Barrister-led entities
  • Premises
Fees & Costs
  • Introduction
  • Entitlement to costs
    • Retainer
    • Solicitors
    • Rules for other professions
    • Contentious and non-contentious business
  • Payment Models
  • Standard Model
    • Pay as you go
    • Hourly rates
    • Capped hours or fees
    • Interim bills
    • Blended rates, bulk discounts, panels
    • Fixed fees
    • Percentages
    • Credit
    • Deferred funding
  • Third party funding
    • When is it available (defendants?)
    • Maintenance and Champerty
    • Conflicts of Interest
    • QC Clauses
    • Code of conduct for Third Party Funders
    • Combinations of funding models (CFA, ATE etc ...)
    • Applying for funding
  • Contingent fees
    • Conditional Fee Agreements
    • CFA Overview
    • CFA Regulations
    • Types of CFA
    • Post April 2013 position
    • Calculation of uplift
    • Damages Based Agreements
    • DBA Regulations
  • Legal aid / public funding
    • Legal Aid and Human Rights
    • The current legal aid regime
    • The Legal Aid Agency
    • Guidance
    • Eligible claims
    • Funding Code
    • Public funding certificates
  • Legal Expenses Insurance
    • BTE
    • ATE
  • What funding option is best?
    • Worked examples
    • Comparisons
  • Enforcement
    • Is the client credit worthy?
    • Assets
    • Liens
  • Conclusion
Financial Stability
"this is a comprehensive book covering the work of all nine regulators. The complex and maze-like structure of legal regulation needs a clear map to find your way through, which this book provides ... For a subject clouded by lack of clarity it is to the author's credit that this text is readable and clear ... This text is no doubt essential for those acting in the role of COLP and COFA in solicitors' firms ... it is a comprehensive and readable text on the regulatory framework governing the practice of law and so a copy should be in the office of each entity practising to-day as a tool of reference"
Read the full review

"A modern, accessible, clear and updated guide to the law of legal services is to be warmly welcomed ... The Law of Legal Services is an excellent addition to the library of anyone concerned with legal regulation."
Click here to read the full review
Richard Clayton QC, 4-5 Grays’ Inn Square, Counsel

"an accessible, authoritative and comprehensive guide to the complexities of working in the profession."
The Law Society Gazette

"This book rises to meet a formidable challenge: a comprehensive analysis of regulation, professional liability and business issues for legal practices ... a useful addition to the established works ... comprehensive coverage ... a useful one-stop shop ... this work is commendable and recommended"
Click here to read the full review
New Law Journal

"a comprehensive and accessible single volume guide ... an invaluable point of reference ... accessible, clear, and up to date guide to legal practice"
ARDL Bulletin

"A modern, up to date guide to legal services...an important new work of reference on legal services...the 'regulatory rules' referred to are so extensive and often complex, that it is a relief to know ...this authoritative, yet easy to follow and up-to-date guide is now available...written in an accessible style...excels as a research resource...offers value for money...an indispensable addition"An appreciation by Phillip Taylor MBE and Elizabeth Taylor of Richmond Green Chambers

To read the full review click here


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
25June 2015
Tom Bradford Barrister, Russell Cooke LLP
Michael Stacey Solicitor - Russell Cooke LLP [formerly of the MOJ and LSB]
Michael Colledge Solicitor - Russell Cooke LLP
Andrew Donovan IPS Board member [formerly of the SRA]

Culpability is central to the assessment of seriousness. The basis of regulatory action is the identification of conduct or rule breaches justifying a penalty because they are serious. This means that seriousness is relevant not only to the level of penalty but also to the considerations which go to establish whether or not particular conduct is a relevant rule breach or misconduct at all. The focus of this chapter is misconduct which is used in this book to mean culpable behaviour.

Assessing seriousness
4.70 The characterisation of conduct as misconduct depends on the view of tribunals and regulators, and the seriousness of misconduct is indicated by the severity of the sanction it is likely to attract. The purposes underlying the selection of penalties were described by Sir Thomas Bingham in Bolton v The Law Society:

‘A penalty may be visited on a solicitor … in order to punish him for what he has done and to deter any other solicitor tempted to behave in the same way … … To be sure that the offender does not have the opportunity to repeat the offence; and … the most fundamental of all: to maintain the reputation of the solicitors profession as one in which every member of whatever standing may be trusted to the ends of the earth … a member of the public … is ordinarily entitled to expect that a solicitor will be a person whose trustworthiness is not and never has been seriously in question. Otherwise the whole profession and the public as a whole is injured. A profession’s most valuable asset is its collective reputation and the confidence which that inspires.’

4.71 Accordingly, the purposes identified in Bolton and referred to in the Solicitors Disciplinary Tribunal’s sentencing guidance are:

• punishment;
• deterrence;
• removal of risk of reoffending;
• reputation/confidence.

4.72 Underlying seriousness are the twin concepts of culpability and harm. The most serious misconduct is likely to involve both high levels of culpability and serious harm to others. The SDT’s sentencing guidance gives examples of factors which influence the assessment of culpability and harm. The guidance then goes on to identify aggravating and mitigating factors.

4.73 Similarly, the Bar Tribunals and Adjudication Service produces sentencing guidance which not only identifies aggravating and mitigating factors in general terms, but also describes examples of such factors in relation to specific offences under the Bar’s Code of Conduct. From these two sources it is possible to identify the main factors relating to the assessment of seriousness.

Misconduct involving dishonesty is at the most serious end of the scale and will almost always result in a lawyer being excluded from his profession.

4.75 Dishonest lawyers may participate in and facilitate a range of criminal activities. The areas of particular prevalence vary over time but undoubtedly the activities of such criminal lawyers represent a risk not only to the public but also to honest lawyers.42 The SRA produces formal warnings from time to time.

Criminal offences not limited to dishonesty
Any criminal conviction of a lawyer is likely to lower public confidence in the profession and, except in relation to minor road traffic offences, is likely to amount to misconduct. A first time conviction for a driving offence would be more serious if, for example, dangerous driving were involved; people were injured; or the lawyer’s alcohol level was exceptionally high. The conduct might be less serious if, for example, the lawyer had only driven to deal with an emergency.

4.77 A conviction for violence would be more serious if injury was caused or the violence was severe. Previous convictions, the use of a weapon, or the vulnerability of the victim would make the conviction more serious. An isolated incident with an element of self-defence might be less serious. A conviction for the supply of drugs would be more serious than a conviction for possession. Previous convictions or supply at a significant scale and an intention to gain financially would all render the misconduct more serious.

4.78 With all criminal convictions, relevant considerations would include the degree of cooperation with the police and the prompt reporting of the conviction to the relevant regulator. A proper plea of not guilty, even if followed by convictions, should not be regarded as a significantly aggravating factor.

Misconduct which is carefully planned and calculated is more serious than misconduct which is spontaneous and which occurs without reflection. Planned conduct may represent a greater threat because it may involve a calculation of the risks of detection and punishment balanced against the benefits. Such calculated behaviour could, if successful, become a more systemic risk to the regulatory system.

A higher level of systemic risk is also represented by conspiracies to commit misconduct. Conspiracy suggests a degree of premeditation and planning. Lawyers within firms play an important role in regulating each other’s conduct and an agreement to depart from proper standards makes the misconduct of all involved more serious. Non-lawyers are not subject to professional rules; but often agreements between lawyers and non-lawyers to commit professional misconduct will involve an element of conscious impropriety or dishonesty.

Repetition and duration
Misconduct which is repeated or which continues over a lengthy period would tend to be more serious than single or isolated incidents of misconduct. Misconduct over a lengthy period also suggests that opportunities for reflection and a change of behaviour have not been taken.

Positions of trust
Misconduct which represents the abuse of a position of particular trust is likely to be viewed as more serious. Solicitors generally have a fiduciary relationship with their clients, but in addition may assume responsibilities beyond those implicit in the solicitor and client relationship. A solicitor may act, for example, as an executor or trustee. A special position of trust may provide less transparency or third party knowledge in relation to a solicitor’s dealings, and this increases the risk of harm and reduces the chances of early detection.

Motivation may make particular misconduct more or less serious. A motivation of personal financial gain is likely to make conduct more serious. Conversely, a misguided but honest attempt to further a client’s interest may be viewed as less serious than would otherwise be the case.

Misconduct which a lawyer could foresee would cause particular harm to a client or third party is likely to be more serious. Harm may be particularly significant if the person harmed is vulnerable in some way, or if a lawyer has been motivated by personal gain.

Attempts to conceal misconduct or to deflect blame onto others will make the misconduct more serious.

Public confidence
Some forms of misconduct may be seen as having a more widespread effect on public confidence in the profession. An example of this might be a solicitor’s compliance with rules relating to the handling of client money. A failure to keep accounts records properly may make it difficult to establish that client funds have been protected. Delay in payments to clients may cause an apprehension that funds will not or cannot be paid and the perception of lawyers’ reliability in handling funds may be damaged.

Misconduct by a very experienced lawyer, or one holding an office or position within the profession is likely to be viewed as more serious than the same misconduct by an inexperienced or junior lawyer. An experienced lawyer may be expected to understand the significance of particular behaviours more readily than an inexperienced one. Misconduct by the holder of an office, for example a coroner or part-time judge, might be expected to have a more serious effect on public confidence than that committed by members of the profession generally.

Individuals affected
The harm caused by misconduct is also likely to be related to the number of individuals affected by it. These may include not only clients and third parties, but also lawyers or employees associated with the individual concerned.

Individual control
Commonly, misconduct will involve some failing on the part of more than one individual lawyer. The degree of direct responsibility for either the behaviours concerned or aspects of supervision is an important aspect of the seriousness of an individual’s conduct.

Discriminatory behaviour may amount to misconduct in itself or may make other forms of misconduct more serious.

Integrity and recklessness
As well as those emerging from sentencing guidance, two further aggravating factors can be identified. First, a lawyer may show a lack of integrity without being dishonest. A lack of integrity must raise the question of whether the lawyer should remain in the profession. Secondly, breaches of rules may occur because a lawyer has been reckless in relation to compliance. A reckless approach may pose a serious risk to the public and may merit striking off.

4.92 Recklessness may also be found to be the explanation for the participation of a lawyer in doubtful transactions without proper enquiries.

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 environment

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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