QASA – a professional failure

So the Court of Appeal has turned down leave to appeal Leveson et al’s judgment dismissing the judicial review of QASA. Sadly for the regulators, this may be the one issue which sufficient grassroots criminal defence practitioners can rally around now that the CBA has settled the fees dispute for its members. Unless solicitors are sufficiently hacked off with the CBA’s behaviour to sign up in rather larger numbers than hitherto.

My recent lecture on Precarious Professionalism made several points about QASA which I think might bear repeating. They are:

What it tells us about the case for a single regulator:

The quality assurance of advocates (QASA) is the most wretched example [of cross-professional collaboration]. This proposal began its formulation in 2006. It has proceeded in a painfully slow manner and has not improved much in substantive terms in the years it has been negotiated. We might even have had a proper pilot; a roll out and a third iteration in the period it has taken to get to where we are now, which is not a fully functioning scheme.

Or what it tells us about quality and legal aid cuts:

The more-for-less mantra when applied to the wafer thin margins of legal aid work is almost certainly going to substantially increase risks to quality. The same might be true of dramatic change in the personal injury market. Whether compromising quality is worth the reduction in public spending is a political not professional judgement but one which also relates to a core constitutional value, the rule of law. The professions cannot decide this question for governments, but they can influence it.

The professions’ mistake has been to treat their own judgement as the acid test of whether quality, and so the rule of law, is fatally breached. An alternative approach would be to evidence that judgement and do so institutionally. They have not done so. The professions’ knowledge about the competence of their own members is, to put it kindly, modest. And they are being dragged kicking and screaming towards a relatively light touch scheme of Quality Assurance for Advocates.

Most importantly, there will now be no baseline against which one can say whether legal aid cuts have significantly worsened quality. It is, I believe, a massive failure of collective wisdom and – in some but not all quarters – of professional leadership.

Whether the CBA deal has left solicitors and civil legal aid practitioners high and dry in negotiations with the Lord Chancellor or not, the deal has ameliorated the cuts but it has not obliterated them. Real terms cuts in funding are likely to harm quality. The CBA are the last body on this earth* that are going to admit that, having agreed a funding deal, their members work quality is diminished and diminishing, yet that is what the evidence base Leveson referred to suggested.

I have heard Roger Smith refer to the potential that legal aid negotiations risk a devil’s pact: agree the money and we can quietly forget about the quality concerns that were so central to the problem. Both the profession and the Lord Chancellor have an interest in saying, once the dust settles, that we have the finest criminal advocates in the world. Or perhaps in an acknowledgment of straitened circumstances, the finest possible. Let me be clear, QASA is a modest and (probably) flawed scheme. The question is whether it is better than nothing. This is something which I heartily recommend more judicial reviews and eight more years or arguing to resolve.**  Without something like QASA we depend on the likes of Chris Grayling and whoever happens to be chairing the CBA at the time to say that quality is A ok.


*I exaggerate, the last body is in fact the MoJ: until it suits them otherwise.

** n.b. this is a sentence which contains sarcasm

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Allen & Overy: blame the lawyers, but which ones?

The Financial Times is reporting that two Allen and Overy lawyers (one for US attorney and another a (now retired) senior civil litigator) have avoided being referred to the Attorney General’s office for an investigation into whether they had committed a contempt of court.

The concerns arose out of A&O’s representation of Mr Dahdaleh, who was an accused in a major bribery trial. Four days before the criminal trial, it is reported that three lawyers from A&O and Mr Dahdaleh met with a prosecution witness. That meeting took place in spite of Mr Dahdaleh’s bail conditions prohibiting him from making contact with any prosecution witness.

Reuters reported in November that the witness said this:

“It was very clear to me that they came to the meeting wanting to pressurise me and influence what kind of testimony I will give here,” he told the court.

“He (one of the lawyers) was telling me what I needed to say and I found that very intimidating,” he said.

The story goes on to report:

Al-Kooheji said the Allen & Overy lawyers had insisted that he should tell the court that he knew the payments that Dahdaleh had made to Alba managers had been authorised by senior government figures.

The witness said he told them that was not correct and he would say no such thing under oath.

Al-Kooheji told the court that two days before the London meeting, he and Dahdaleh’s Bahraini lawyer, Qays Zu’bi, had taken part in another meeting with two deputy prime ministers in Manama.

“He (Zu’bi) was suggesting that the Bahraini government could interfere politically to stop the SFO investigation,” Al-Kooheji said, adding that this suggestion had been rejected.

The trial was aborted, Allen Overy ceased to act, realising – I assume -that they could be called to give evidence on that meeting. It appears also that Mr Dadahleh was remanded in custody (although it is not clear to me whether the two things are definitely linked, there is a likelihood that a breach of his bail conditions played a role). The allegations against the A&O lawyers were repeated in the opening of the subsequent rescheduled trial.

That trial collapsed with the Serious Fraud Office being criticised for delegating part of its investigation to the US law firm which was also representing the party to civil litigation arising from the same or related facts. It was also alleged that one of the A&O partners misled Akin Gump as to the purpose of the meeting. Akin Gump subsequently declined to give evidence saying it risked prejudicing their own client’s rights. For that reason, and because another witness changed their evidence (were not told who*), the judge directed that the jury acquit.  At about the same time, bribery proceedings related to some of the same companies to which bribery allegations related were settled for $384 million in the US.

Today’s report suggests some, albeit partial, acceptance of fault on the part of the Allen & Overy lawyers. The QC representing the two partners told Crown Court that the meeting in question was “extraordinarily ill-advised”. Caroline Binham of the FT also reports him as telling the court that the two partners, “were not experienced UK criminal lawyers and relied on others, including UK barristers for advice on how to handle the UK process.” A&O are also reported as having referred the matter to the Solicitors’ Regulation Authority themselves (as they are probably obliged to do). The judge is also deciding whether to report the matter to the SRA himself. An admission that they took on a matter of great importance when they plainly lacked experience/competence in the area, that gave rise to a breach of bail conditions which they – ahem – supervised, opened the door to an allegation of attempt to pressure or coach prosecution witnesses, and put them in a position where they are professionally embarrassed as a result of being (potentially) a material witness in the client’s case or suggest that this is a decision which should not be too difficult. Add to that the impact of their conduct on a difficult and expensive trial and the public interest in an investigation is accentuated.  [Subsequent to this blog being published more details have emerged courtesy of the Lawyer including something of the A&O lawyers' defence].

At a time when the courts are increasingly keen to emphasise the obligations of the public and jurors when involved in the administration of justice or even tweeting about justice, it is to be hoped that the court takes a firm line requiring thorough investigation when members of the legal profession, particularly senior ones, take questionable decisions of the kind we have seen here. Whether punishment is justified, for the lawyers and/or their firm, we will have to wait and see but at the very least lessons need to be learned and learnt with some emphasis.

The story gets more extraordinarily still though. The QC representing the A&O lawyers is also reported by the FT as saying that,

“the barrister originally instructed in the case, Clare Montgomery QC… was aware that a meeting was taking place before the trial was originally scheduled to start. He did not clarify, when pressed by the judge, whether she knew would be present or whether the criminal trial would be discussed.”

Those are facts are important to his client and also important to the role of Ms Montgomery. If he did not know: why not?  If he did know: why would he not say?

Equally, putting the criminal trial to one side: let us assume that the criminal trial was not discussed at the fateful pre-trial meeting. It may appear naïve to say this, but am I the only one discomforted by the fact that civil settlement negotiations of this sort were taking place with relevant witnesses at such proximity to a pending criminal trial, and one of such size and import?


Reuter’s have however reported this which is likely to have been crucial to Dahdaleh’s acquittal:

  • Lawyers said Jawad bin Salem al-Urayed wrote about the case of Victor Dahdaleh, a businessman accused of paying some $67 million in bribes to former managers of Aluminium Bahrain (Alba) in return for a cut of contracts worth over $3 billion.

    …unable to contact Urayed, one of five Bahraini deputy prime ministers, for comment on the letter, which was read out in court by Dahdaleh’s lawyer Nicholas Purnell. The prosecution did not dispute the authenticity of the letter, addressed to the SFO director and the Attorney General.

    “At the request of Allen & Overy (the London law firm then acting for Dahdaleh), we hereby confirm that the board of directors of Aluminium Bahrain knew of and approved all contracts entered into by Alba, including knowing of and approving payments made by Victor Dahdaleh,” the letter said. “This was entirely in accordance with Alba practice,” it added.


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Happy talk: Motivating lawyers, helping law students choose

One of the interesting sub-plots of the Big Law vs New Law debate is the way in which workers (partners and their equivalents, salaried partners, employees) are motivated. If reports of the extension of performance related pay to associates is anything to go by, Big law seems to be deepening its commitment to financial incentives as the currency for motivation. It’s a shame on a number of levels. There’s quite a bit of evidence mounting about the negative impacts of using financial incentives to motivate workers, especially sophisticated workers. We can all see the logic of an organisation that solely or mainly cares about bills or hours billed heaping on the pressure to deliver those bills; and labelling that as ‘rewarding hard work’. Research evidence from other contexts suggests the downsides can be acute: financial incentives may demotivate (or – I suspect- motivate only narrowly) and money frames can diminish ethicality. The kind of horror stories we are hearing about partner behaviour in defunct firms may not be an accident or simply the result of financial pressure: a financialised model of professionalism has the potential to weaken a firm’s sense of community in very real terms.

My focus today though is on something a little narrower. That concern is how law schools, law students and law firms define success and whether success has a meaningful impact on our own happiness in the long term. That concern is examined in research by Lawrence S. Krieger with Kennon M. Sheldon on What Makes Lawyers Happy? Transcending The Anecdotes With Data From 6200 Lawyers. They employ the concept of “subjective well-being” (SWB) to measure happiness of law student and lawyers. As the title points out they have very large data sets (though not very high response rates to their data survey instruments). Their work is based on Self-determination Theory (SDT):

“Tenets of SDT include that all human beings have certain basic psychological needs – to feel competent/effective, autonomous/authentic, and related/connected with others.”

This is one theory of why we come to work. Another is for money. Money provides us with status and material goods. These things too can make us happy. The interesting question that that this research poses (and seeks to answer) is what is more predictive of our well-being?

The researchers have spent some time looking at these issues.

Their first study on (US) law schools suggests that, “students after they began law school [show] marked increases in depression, negative mood, and physical symptoms, with corresponding decreases in positive affect and life satisfaction.” So far so grim, but it gets worse. They speak of an effect which I think law students in the UK sometimes worry about (or at least the ones I talk to do): “shifts from helping and community-oriented values to extrinsic, rewards-based values in the first year; similar shifts in motivation for becoming lawyers, from salutary internal purposes (for interest, enjoyment, and meaning) to more superficial/external reasons (such as for financial rewards, recognition, or to impress or please others).” This leads (they argue) to, “generalized demoralization or loss of personal purpose.”

Not all law students are equal, however: “students beginning law school with the most internal motivations and intrinsic values earned higher grades.” That is the best students in intellectual terms and those motivated for (if I can put it like this) the ‘right reasons’ did better but also, “those students then shifted to more external (money-oriented) job preferences.” Success breeds instrumentalism. Never mind though, success is its own reward, right? Well, maybe not: “success in law school (measured by grades) could exacerbate the longer-term negative effects of the law school experience. More successful students changed career goals to prefer more extrinsically-oriented jobs than when they began law school, and thus would be predicted to experience diminished satisfaction and well-being.”

Their second study, “confirmed broad negative effects occurring during the three law school years, including increasing student distress and decreasing internal motivation for legal work.” The effect was stronger at a ‘traditional’ school. What drove these outcomes was, “decreases in satisfaction of the fundamental needs for autonomy, competence, and relatedness to others after students entered law school.” They speculate (but it is speculation) that students may get greater support from an emphasis on law practice training (“skills” and clinics) and from faculty with a stronger emphasis on teaching than research orientation. They also nod very firmly in the direction of Elizabeth Mertz’s seminal work on US law schools suggesting that, “basic law school training changes student values, “unmoors the “self”, marginalizes fairness, justice, morality, emotional life, and caring for others, and exclusively emphasizes competitive processes to the extent that they become the only goal.”

The paper to which I have linked goes beyond this work to look at lawyers in practice to see if similar kinds of issues were predicting lawyer well-being in practice. They established a useable sample of 6226 lawyers, judges, and those in related positions. Whilst response rates were low, on measured comparators they claim their sample is broadly representative. My own view is that they are likely to have a sample somewhat biased towards those interested in the subject matter of the survey, but nevertheless the numbers are large and within that group they provide very interesting evidence of what shapes students and lawyers on their path to a satisfying life.

What kinds of things made a difference? Well doing well at law school had some positive influence. Debt levels similarly had a small (negative) relationship to well-being. Income had a moderate positive impact on well-being. “Experiences of autonomy/authenticity, relatedness, and competence” were – however- far stronger predictors of well-being suggesting that those who chose (or were able to choose) jobs that they found interesting, enjoyable and/or that related to their own core values were strong predictors of well-being. This kind of intrinsic motivation was a much stronger predictor of well-being than class rank and income. The lesson for law students and lawyers appears to be, if you want to improve your sense of well-being (and if you have a choice) choose “interest and meaning in work rather than higher income”.

The authors conclude that:

“The data confirmed our hypotheses, revealing a pattern in which (1) the internal factors seen to erode in students during their initial law training were the precise factors most strongly predictive of lawyer well-being, and (2) the external factors emphasized in law school and by many legal employers were, at best, only modestly associated with lawyer well-being. …the external factor most predictive of [well-being…] was less predictive than the internal factor with the weakest association with [well-being].”

They also compared well-being amongst different types of lawyer. Judges reported the highest well-being and the greatest internal motivation and satisfaction, although because they were on average ten years older, their age may have impacted on these results. “[P]restige lawyers had robustly higher income, law school grades, and law review participation than the service lawyers …but also had less internal motivation and intrinsic valuing… [whereas] service lawyers reported greater well-being than the more “elite,” highly paid prestige lawyers… despite substantially lower earnings.” Their definition of prestige lawyers was somewhat different from the definition here, but it is nevertheless interesting as an indicator that status and reward does not bring higher levels of well-being to US lawyers. Interestingly, also, “prestige lawyers had substantially higher law school grades than any other group, they reported significantly lower satisfaction of the competence need… [suggesting] …a core dissonance between “competence” as measured in law school (largely by grade performance), and a lawyer’s ability to feel competent in actual law practice.”

Conversely, well-being was not a product of a long hours culture: it did not vary significantly with absolute number of hours worked. However, billable hour requirements increased, income increased but other predictors of well-being decreased (autonomy, internal motivation and relatedness). The net result was negative: “subjects experienced less life satisfaction and lower net affect as billable hours increased… [e]ach increase in billable hours brings moderately greater income and slightly less happiness.” Increasing firm size increased external motivation and reduced autonomy satisfaction (therefore reducing well-being). Litigators are also somewhat less happy on their data (although it’s a small effect). Pro bono work and taking holidays improved well-being.

The results put me in mind of a discussion I had recently with a law student complaining that law school is premised on the assumption that high paying (and therefore high status) jobs in law firms are what is desirable.  Indeed, with law schools increasingly being asked how well they ‘place’ students into legal practice and employability data making its way into league tables we have an interest in maintaining the status quo.  The research suggests the idea that there is a dominant, elite path to law which is beneficial may be an illusion; even a slightly toxic one. Yet the research also has warnings for the employers. They need to take the motivation of their recruits, employees and partners seriously.  The authors rely on other studies to claim that subjective well being has an impact on:

  • “professional behavior and positive performance in lawyers; such lawyers are also likely to produce more, remain longer, and raise the morale of others.”
  • “[it improves the] accomplishment of complex mental tasks, generally improved work performance, and greater culturally valued success.”
  • It also improves productivity, “energy, optimism, creativity, [and] altruism”:
  • “less happy employees impose high costs on employers in terms of increased absence and turnover, and poor work performance.
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After referral fees – ethical personal injury practice?

In preparation for chairing a debate on Referral Fees – One Year on, taking place at UCL on 6th April (book here), I have been doing some digging into views on referral fees.  The dominant view appears to be they are, “alive and well” if “slightly adjusted”.   Alternative Business Structures, Joint Ventures as well as schemes where information is provided by the client not the referrer are some ways round the ban.

That’s not to say the ban has had no effect. It may have impacted more on marginal players, less able to see sensible ways round the ban itself.  Perhaps the ban is a subterranean competence test: if you can’t see a way round it, you’re not much of a lawyer, could be the refrain.  In the incompetence or daft camp, might fall firms who may have told the SRA they have ceased relations with CMCs when they haven’t.  Similarly, the ban may have weeded out some CMCs (as some data suggests) or led some CMCs to deregister on the (flawed) basis they can carry on their business without making “referrals” and so without needing to be regulated by the Claims Management Regulator.  The consensus also appears to be that ban, but more likely the general squeeze on personal injury costs, has driven down the level of such fees.

What do the work arounds look like?  Epoq provides one such service (LegalGo).  As legalfutures describes it, CMCs distribute LegalGo as a free service to claimants which they sign clients up for online.  LegalGo offers a general legal helpline, a selection of online legal document drafting services and referrals for other legal services. The plan is serviced and administered by Epoq.  An e-mail is then sent to the claimant enabling them to accept the terms of the plan and contact the law firm directly. “The plan is organised so any request for help with a PI claim comes direct from the claimant; the law firm then pays the CMC for telling the client about the law firm.”

The assumption is that the referral fee ban is not activated because it is the client (not the referrer) which contacts the firm to pass on their information.   One question is whether this arrangement is compliant with the ban.  As described in the Legalfutures story, there may be an argument as to who is passing on the information needed to provide the services.  If the CMC, through LegalGo, are organising the information which is then passed on by the client (or the client authorises access to it through an email to a firm), then it seems moot to me who is ‘providing information’ necessary to make an offer of relevant services.   In reality the provision of the information is something of a joint endeavour.  I may well be wrong to raise doubts; and readers should note Andrew Hopper QC has indicated his firm opinion that the arrangement is not a banned referral fee arrangement.

In more substantial terms, if one of the concerns about referral fees is a lack of informed consent by the client to a referral fee, one might argue that this approach offers some improvement.  The client’s role in passing the information on to a claimant solicitor at least shows a greater level of consent through participation to the referral than would have been the case before the ban.  It’s a rather modest improvement though, and does not – in itself – suggest the client is better advised.  One would hope and imagine a company of Epoq’s repute would be doing a decent job of informing the client within the constraints of an online system.  Substantial responsibility may fall to the CMC, who are more visible and have more reputational need to ensure the client is comfortable with the arrangement.  As Richard Cohen, of Epoq puts it, “It also negates the need for law firms and CMCs to seek new regulatory structures to get around the ban and so allows them to focus on what they do best.”

Another model is the First Notification of Loss service.  I am told, one approach is for a legal expenses insurer to outsource to a law firm its initial claims handling. The claim-line number for first notification of loss is operated by the law firm at its own expense. It may also pay a fee per policy sold. On behalf of the insurer it will deal with all claims issues, passing the insured to preferred repairers, credit hirers, etc.  One can see here how the client is not just a client, but also a source of ancillary revenue streams through commissions for these referrals.  Firm paying for the privilege of providing a call-centre service can capture no-fault PI claims. Again, it is thought to be LASPO compliant because any information comes directly from the client.

There is some worry that Joint Ventures and ABSs worsen not improve the position pre-ban.  If the referral fee ban has hastened the control of all aspects of a claim by an insurer through an ABS; has this institutionalised a conflict of interest or made the process more efficient?  Insurers involved in ABSs have to get through SRA licensing processes, and may be regulated by the PRA and FCA.  They thus have to satisfy those regulators that they have systems to manage conflicts.

One worry is that the personal injury bit of the case is not very profitable – if it is profitable at all – and so the incentive to run that to the maximum benefit of the client is minimal.   The structural desire on the insurance company at group level is to minimise costs on claims: does that mean not just efficient processing of the claim itself, but also minimising the level of compensation?  Systems might provide some protection against that but simply (and legitimately) driving efficiency hard may drive down value for customers.  Dissatisfied customers might result, but insurance companies work hard to manage client expectations through service.  Conversely, and relatedly, bringing a whole bundle of services and functions together may lead to greater speed and quality of outcome for the client.  SO we have two opposed but plausible hypotheses: which is correct is an empirical question.

On the other hand, the dominant feeling that has been expressed to me is that the end of recoverability; and changes to fixed fees – whilst they may be squeezing down on referral fees – are also squeezing down on the viability of firms.  We have already seen significant collapses of personal injury firms.  How many more will we see?  Economic precariousness brings with it ethical risk.  So does the newly discovered complexity of charging clients up to 25% of part of their damages.   Are firms succeeding in making these deductions transparent and intelligible?  Early scrutiny of post-referral fee arrangements by the SRA appears to have led to a view that referral fees are only part of the problem.

…in setting up arrangements in a way that does not breach LASPO, firms are failing to consider their wider duties to their clients and others, and in doing so may be breaching the Principles or failing to achieve the Outcomes. Examples include:

agreeing with an introducer to deduct money from clients’ damages;

inappropriate outsourcing of work to introducers;

referrals to other service providers which are not in the best interests of clients;

failure to properly advise clients about the costs and how their claim should be funded; and

lack of transparency about the arrangement.

As far as I can tell no one really knows how these different approaches to PI claims impact on clients or outcomes.  Referral arrangements, joint ventures and ABSs have the potential to extend access to justice (by ensuring claimants get to good service providers) but they also have the potential to lead to real detriment (the deductions and charges claimants pay; the invisible and largely unknown impact of any conflicts on settlement levels and timing) as well the potential for incentivising fraud – be that through poor quality claims or adding on costs – such as car hire – which do not need to be incurred (for which someone in the claim chain gets a nice commission).   ABSs and joint ventures may lead to economies of scale and scope; they may prompt efficiencies; and they may lead to the claimant being placed second third or fourth in the pecking order of provider concerns if the revenue streams are largely generated elsewhere.  Claimant solicitors can produce examples of under-settled claims, which paint a worrying picture, but really we need a better, partly quantitative picture of how things are working.  Ordinary law firms are not however exempt from similar concerns: they too have conflicts of interest to contend with.  The regulators seem to satisfy themselves with systems not outcomes. Perhaps they need to get a bit more focused and start looking more forensically at what the system delivers for clients and for policy holders?  Or perhaps, if things haven’t changed so much, then referral fees weren’t really that much of an issue after all?


Banning Referral Fees – One Year On: Is the personal injury field now more ethical? Tuesday 8th April 2014, 6pm, UCL Faculty of Laws, Bentham House, Endsleigh Gardens, London WC1H 0EG Book here

Speakers: John Spencer, Spencers Solicitors, Member of the Civil Justice Council, APIL; Stephen Mayson, Consultant, leading commentator on the legal profession; Andrew Hopper QC, leading authority on professional regulation; and, Kathryn Mortimer, Managing Director, DAS Law

Chaired by Professor Richard Moorhead, Director CELS, UCL Laws

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Digital Democracy and Law

There’s an interesting Parliamentary initiative being run, I believe, as a Speaker’s Commission, on digital democracy.  They have a call for evidence here (and as I understand it we don’t have to feel we are experts for responses to be worthwhile).  In broad terms the questions they are looking at are:

  • Could technology improve the access to and usability of both legislation and the law-making process for the citizen, representatives and professionals (such as lawyers), and if so do you have any suggestions?

  • Should you need to be a lawyer to understand and use an Act?
  • Should technology be used to integrate citizens’ views better into the legislative process? At what stage of the legislative process would this work best? How could the Public Reading Stage be improved?
  • Are there any examples from other parliaments/democratic institutions in the UK or elsewhere of using technology to enhance legislation and the legislative process, which the Commission should consider

The answers seem to me to be: yes, as little as possible which would also reduce the occasions on which lawyers don’t understand legislation, um, and yes.  There’s a nice blog by one of the Commission team which looks like it is worth a follow.  That seems to me to suggest that when there is a mutual recognition that the system is crazy, then perhaps things can change.  A little at first, and then perhaps more radically.  I am no expert, and will try and send some thoughts along.  I know many of my readers have more informed and informative perspectives about this, and I encourage them to do the same. But better. To pick up on one of the metaphors in Emma Mulqueeny’s post, from little scribbles chaos or incremental improvement grows… or maybe more than that.

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Precarious Professionalism II: The Paper Strikes Back

For those interested, the paper from my lecture is now available on SSRN: click here.

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Precarious Professionalism

Many thanks to everyone who came to, or sent best wishes for, the lecture.  The feedback has been very interesting! The slides are here and Dan Bindman has done a very nice summary on the ever excellent Legalfutures; lawyers are not as superior as they think they are, but of course the same is true of law professors too.

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