Professionalism and Ethical Leadership From General Counsel’s Suite

A Guest Post by Azish Filabi and Jim Lager

Maybe it was easier in the old days for in-house lawyers to be the de facto conscience of their client organizations. Lawyers have a keen sense for the peril and risk that lurks just past the next opportunity, and accordingly had a great influence on how their organizations exercised their discretion. Wise counsel was both sought and dispensed by general counsel for decades. Assuring corporate compliance with governing law and regulation was a natural part of a corporate lawyer’s duties.

Many corporate counsel still serve this traditional function, yet with increasing frequency, lawyers are succumbing to economic, structural and behavioral pressures to stay in an increasingly narrow lane demarcated by the law’s four corners. There is an emerging consensus that lawyers have become the “loophole finders” within organizations. The growing academic literature on the shifting landscape for lawyers is well documented (and produced) by the Center on the Legal Profession at Harvard Law School. The authors of the paper “Lawyers as Professionals and as Citizens: Key roles and responsibilities in the 21st Century” mark the various contextual challenges lawyers confront in the current marketplace. Their analysis highlights that one consequence of the increasing competition in the legal profession is the pressure on lawyers to deviate from the ethical duties of lawyering. In particular, the rise in size and prominence of in-house legal departments is at the center of the continued shift in legal practices.  Initially, departments were expanded as a response to increased costs of services offered by law firms, and now they pressure those law firms to increase their own efficiencies and reduce their costs.

The pressures on lawyering are also evident in the debate about the role of the CCO (chief compliance officer) vis-a-vis the GCO (general counsel’s office). Although an understanding of the law is essential to compliance, it is not essential for compliance to be inside the general counsel’s suite. There are advantages to organizational separation of compliance from the chief legal officer’s purview, including assuring that allegations of improper behavior receive appropriate (and independent) attention, and demonstrating the corporation’s commitment to compliance by giving it a high-level status.

A separate compliance department does have its downsides. It increases the likelihood of turf wars between the two offices, and fuels the tendency to view compliance professionals as outsiders who may be kept away from the important social networks and the informal communication channels necessary to understand how decisions are actually made. Separation of compliance from legal may also increase the risk of the general counsel’s lawyers serving as mere legal technicians, responsible only for telling clients what the law permits and forbids. Based on organizational logic, separating the two functions could lead to conclusions that the responsibility for all ethics matters will reside in the CCO. For a legal department, this would further discourage lawyering from serving as wise counsel with professional responsibilities not only to the client but also to the public.

We think that good ethics makes compliance easy, and a corporation can have a good ethical culture irrespective of the company’s organizational chart. Research tells us what we all know intuitively: ethical behavior in organizations stems not from codes, the adoption of procedures or the location where “compliance” is housed, but instead from actions based on our understanding of human behavior.

Although no single “best practice” is obligatory, and certainly one size does not fit all, there are some steps behavioral science teaches us will be effective. For example, we know that good ethical modeling by those in authority has a significant effect on the behavior of others. Therefore, we believe that corporations—with the sound advice of their counsel—should carefully consider the advantages and disadvantages of each approach to compliance, and choose the approach that is more likely to foster ethical conduct. Positive role-modeling remains essential for all leaders if an ethical culture is to be maintained and, with it, a strong compliance posture.

Regardless of where compliance functions are located, general counsel are well-positioned to be ethical leaders in their organizations. To exercise ethical leadership, however, they need to be careful to avoid common behavioral pressures–in particular those that, in service to their client’s demands, may disserve their client’s long-term best interests. Pressure on lawyers to be increasingly responsive to client short-term needs can encourage ethical fading, a psychological process in which you eventually lose sight of the ethical dimensions of your decisions because you are focusing too narrowly on a single perspective. For lawyers, serving a client’s immediate need, particularly under pressure to retain future business, a job or increased compensation, narrows the frame of reference away from the broader professional duty of lawyering and providing competent advice.

Ethical fading by lawyers who see their role more as legal technician than as wise counsel has had disastrous consequences for both clients and the public, as the role of the General Motor’s lawyers in that company’s ignition switch failure debacle shows. In that case, as highlighted in the investigation report by Anton Valukas, lawyers served a narrow legal duty to the client by settling cases concerning its ignition switch for nine years without raising the matter as a safety issue. This delay not only racked-up the additional costs of vehicle recalls, regulatory fines and long-term costs associated with reputational damage, but also reportedly 90 deaths due to the ignition switch failures.

Other structural pressures on the profession can encourage unethical behavior. As Professor Langevoort of Georgetown Law School writes in his paper on behavioral compliance, increased competition between in-house and external counsel over the cost of production (i.e., legal advice), and business downturns can encourage unethical behavior because it triggers emotions (especially fear), a short-term orientation and risk-taking. For some, self-protection could lead to taking an unscrupulous stance in negotiations, or even outright deception, justified consciously or unconsciously, as vigorous representation of their client.

As professionals, lawyers must take care to assure that self-interest does not supersede client interests. Balancing these interests requires lawyers to avoid what psychologists Ann Tenbrunsel and Max Bazerman have termed, in the context of ethical decision-making, as a conflict between a person’s “should self” and their “want self”. The want self may pursue pecuniary or other short-term interests, which are sometimes also aligned with the client’s immediate goals, without questioning if the means to those ends are right. Lawyers attending to their should selves would instead consider the full breadth of their professional obligations to their clients and justice, the ethicality of the way the clients want to meet their goals and their client’s long-term interests. Lawyers listening to their should selves would be a wise counsel to their clients, and could not remain silent in the face of a potentially lethal safety issue.

It is difficult for amoral lawyers to meet their professional obligations to their client. Further, amorality risks immorality, leaving ethics to others and, in the end, neither serving the client nor the public interest. A culture of amorality in the general counsel’s office could lead to one where ethical transgressions become banal, so commonplace to a culture that it becomes infused with  irresponsibility, giving little consideration to reputation or stability.

Ultimately, everyone throughout an organization is responsible for its ethical practices. An ethical systems approach recognizes the centrality of individual responsibility, but also the organizational and systemic pressures that could discourage wise counsel and the ethical behavior that comes with it.

Azish Filabi is CEO of EthicalSystems.org where she dedicates her time to developing strategies for businesses to promote ethical behavior in their organizations through research and collaboration with the leading experts in the field. She currently serves as an officer in the New York State Bar Association International Section. Previously, she was an ethics officer and bank regulatory lawyer at the Federal Reserve Bank of New York, and a corporate associate at Curtis, Mallet-Prevost, Colt & Mosle.

Jim Lager is the deputy ethics counselor at the U.S. Government Accountability Office (GAO), adjunct professor at the Robert H. Smith School of Business, University of Maryland, and an Ethical Systems collaborator. The views expressed here are not intended to reflect GAO’s institutional views.

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Reprinted with permission from the “February 29, 2016” edition of the “Corporate Counsel”© 2016 ALM Media Properties, LLC. All rights reserved.

Further duplication without permission is prohibited. ALMReprints.com – 877-257-3382 – reprints@alm.com.

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More than a footnote on legal professional privilege

Lord Neuberger, in a recent short speech, provides some interesting insights in to the problematic world of legal advice privilege (LAP), but he does so with one eye closed.  Let me explain.  He begins with this:

Although the need for LAP where no litigation is contemplated or exists has been judicially doubted [he is referring to Lord Phillips], these principles are well established, and they appear to be workable and clear. And so they largely were in the world in which they were developed, a world so different from ours in many ways. We now live in a world which has global electronic communications, instantaneous international transactions, criminalisation of bribery and cartelism, detailed regulatory systems, increased investigative powers, large and international and complex corporate structures, and, it must be said, highly sophisticated financial and economic fraud. And we live in a world where the law of privilege as developed by judges is modified on a rather ad hoc basis by legislation, and is subject to a number of different sets of published official guidelines.

He mentions the problem of legal advice is given by non-lawyers (and averts to the Prudential case, perhaps regretting – although he does not say so -the way in which the Supreme Court ducked the issue) and then begins to suggest, intriguingly, that LPP may be out of date:

…it is plain even to me that many aspects of modern commercial and legal practices give rise to potential problems in relation to LPP. Particular problems appear to have arisen from the marked increase in the domestic and international fields when it comes to regulatory and criminal sanctions in the corporate environment.

He discusses cross-border co-operation between lawyers when applying the protection of common interest privilege, and whether the US originating practice of a written joint defence agreement provides the protection of privilege.  It is, he says simply, an, “open question and has never been tested.”   In the context of corporate clients he points out, advice privilege only applies to communications between a lawyer and the corporate client rendering the question, “which individuals constitute “the client”?” important.  He accepts the position that , “LAP does not appear to attach to communications between the solicitor and employees or agents of the corporate client, other than the individuals actually being advised by the solicitor – e.g. the chairman, the CEO, the COO, and the CFO, or the executive committee, or a group specially designated by the board or the CEO or chairman,” but also notes that other common law jurisdictions take a much broader approach to the client.  In a Francis Urquhart kind of way, he invites someone to bring an appeal to allow the Supreme Court to ‘consider’ the point.

He also then points out that, in cases where litigation privilege does not apply to internal investigations, there is no privilege in communications with witnesses other than the client.  This would I think be pretty much all such investigations where litigation is not imminent.  He seems to say, work out in advance which group of executives constitutes the client and don’t game that approach too hard and the court will probably regard this as satisfactory – protecting the interviewing of those employees [the senior executives] with privilege. Not particularly edifying, but sensible advice unless one takes the potential for intra-corporate conflicts of interest over such investigations seriously. This is a point which he does not even mention (in the twenty minutes he was allotted for his speech).  An investigation that reports to all the subjects of the investigation as the client is an odd kind of independent investigation. An investigation that interviews beyond that group is not subject to privilege, at least in part. What is the rationale for this kind of mess?

He moves on then to look at the approach of the SFO when they look for “a genuinely proactive approach” to investigation and self-reporting. I take him to be saying that the SFO requires a difficult decision by the Corporation that finds itself at the centre of wrongdoing as to whether to waive LPP . Lord N points out, this, “is a very valuable right, and it is a big and irrevocable step to waive it.” Whilst also going on to point out the many uncertainties around contested privilege claims.  He points to Barclays’ reported (but until then expensively hard fought) surrender of privileged documents:

it is unclear why the privilege argument was being abandoned – whether it is the fraud exception, or the absence of the dominant purpose requirement or fact that the documents were outside privilege because of Three Rivers (No 5) is unclear.

Tempting as it is to say otherwise I solemnly remind you here that you should not make your mind up until you know all the facts.  But how will you (or the SFO or the court) know all the facts? If you do not know all the facts, what should your working assumption be? Given burdens of proof and the like, this probably means giving the Bank the benefit of the doubt.

He also points out that investigations in the context of  cartel offences give rise to a defence that (section 188B(3)) the person concerned:

“took reasonable steps to ensure that the nature of the arrangements would be disclosed to professional legal advisers for the purposes of obtaining advice about them before their making or … implementation”.

He assumes that to rely on such a defence would require a comprehensive waiver of privilege, covering all the documents related to the seeking and giving of the advice.  Criminal practitioners accustomed to advising (sometimes) less sophisticated punters on the dangers of waiving privilege when asserting a right to silence might be thinking, boo bloody hoo.  But Lord Neuberger stills those crocodile tears, by going on to muse on giving the Company human rights protection.  The statute might be read as weakening LPP by mere (but sensible) implication, he suggest, but the fundamental human right of LPP may stop arguments about implied waiver from succeeding.  This is an approach which, if adopted, will encourage a market for bad advice of the kind that Jolyon Maugham QC has so clearly criticised in tax law.

Lord Neuberger ends with this simple plea:

I believe that this takes me to my 20-minute limit, but, before I stop, I would like to say that this short tour de piste of what is only a few aspects of the law of LPP gives rise to two feelings on my part. The first is how difficult the role of a professional adviser can be in an increasingly complex and fast moving world. So often, she is faced with a problem which not only is hard to answer and requires a quick answer, but is one to which there is no safe answer: go wrong one way, and she will be advising her client to break the law; go wrong the other way and she will be unnecessarily disadvantaging her client. Secondly, and concomitantly, judges and legislators have to try harder than ever to ensure that the law is simple, clear and accessible.

I must say, and with all due respect, and as much mildness as I can muster, that this is a rather disappointing way to frame the question.  The motivating concern appears to be the position of the adviser.  In official justifications of legal professional privilege, especially legal advice privilege, the justifications are most definitely not supposed to be centred on the needs of the adviser.  The academic literature, imperfect as it is, points out that the historical origins of privilege and some of its application mean privilege has been developed with too keen an eye on the protection of lawyers.  If you want a little clue as to the recognition of this, notice from now on how often a judge or similar reminds the audience that privilege is the client’s right, not the lawyers. They do that for a reason. Lawyers need reminding of it.

Notice also what is missing from this lecture.  Lord Neuberger speaks of what he knows, with his audience on the night in mind.  He was also invited only to give a very brief speech.  So I am not wishing to sound censorious, but I do think there is a very large and unheard part of the story missing here.  That story would include:

  • The significant anxieties expressed by, inter alia, the Director of the SFO about how privileged internal investigations have the effect of cleaning up crime scenes;
  • The ways in which corporate investigations can be used to mislead investigators (the News of the World’s interactions with the Culture Media and Sport Select Committee being a particularly well exposed one but similar if less acute problems are often seen in practice).
  • The role that privilege played in the approach of General Motors’ to its recent ignition switch problems.  In that case, privilege may have literally contributed to lost lives.
  • The role that privilege played in Big Tobacco’s attempts to conceal document destruction in Tobacco litigation. There’s a fascinating Court of Appeal case on very troubling facts decided by Brooke LJ which makes fascinating reading.

Such examples are not the whole story, and are emotionally loaded, but they are absolutely vital nonetheless.  I have resisted the urge many times since the creation of this blog to write about the pros and cons of privilege.  It is an idea too engrained in the profession, and artificially elevated by judges and I have not made up my mind about the pros and cons, so why take it on? Even suggesting legal advice privilege is wrong is likely to lead to an exaggeratedly hostile reaction. I haven’t got the energy for the grief.

Yet, I do not think the case for legal advice privilege is as clear or obvious as the profession plainly would like it to be.  Legal Advice Privilege is useful. Legal Advice Privilege is harmful. Legal Advice Privilege is abused.   Legal Advice Privilege protects.  Legal advice privilege in corporate contexts however does not protect the individuals if the corporation decides to waive it.  Furthermore, the need to encourage the corporation to take legal advice when it otherwise would not, which is one part of the justification, is somewhat weaker in corporate contexts.  The arguments about privilege supporting trust building between lawyers and corporate actors holds some water, though a good deal of that same water leaks out when one understands how vulnerable corporate employees can be to the ‘real’ client waiving privilege.

There is a particular case for reconsidering LAP in the light of the complexities and uncertainties that Lord Neuberger identifies but one simple answer would be to abolish it. Or abolish it for companies.  Or abolish it for companies when relying on lawyers as reputational intermediaries.*  Other answers might be to strengthen and clarify the exceptions.  Or to think very hard about what independent investigations carried out by legal professionals should really look like.  I really do not know. I am not advocating a position, but I think we should think about the issue from a wider perspective than ‘this makes the lives of lawyers difficult’.  This kind of difficult decision is what the £1,000 an hour rates are for.  The substantive harms caused by privilege may or may not be outweighed by the benefits of privilege, for advice, in the corporate context: but we at least have to weigh those harms properly.

*Okay that one may not be so simple.

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Quantitative legal prediction and the wisdom of crowds

Professor Dan Katz gave a great talk at UCL’s Centre for Ethics and Law last night .  You can see the slide deck here.  It ranged from his Fantasy SCOTUS predictor to the power of random forests of decision trees to aid concrete legal decision-making.  It turns out the best human predictor of US Supreme Court decisions is probably not some hot shot Washington lawyer but an actuary called Jacob, who can’t explain in legally coherent ways why he is so good at this (let’s face it, we’ve all been there, eh boys?). And that, in Dan’s view, “We have too many decisions in law made by single experts”: a point increasingly recognised by law firm risk committees, litigation funders and (naturally enough) insurers. His essential point was that ensembles of experts, crowds and algorithms are very likely to be the best predictors of legal outcomes.

A point of some note for those interested in how this all really works is Dan’s pioneering courses of Quantitative methods for lawyers and legal analytics.  You can see his courses online and teach yourself.

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My response to the SRA’s proposals for an SQE

This response to the SRA’s Consultation on training tomorrow’s solicitors is a personal one.  I am afraid this will not make a great deal of sense to those of you not familiar with the proposals, my apologies in advance.

My response concentrates on the main issue of concern that I have with the SRA’s proposals and in particular the relationship between the proposals, undergraduate legal education and hopes for an innovative, adaptable, high quality legal profession.  That issue can be stated in this way: when the SRA now approaches all its regulatory policy with an emphasis on minimal/proportionate regulation as a necessary precursor to the benefits of innovation, why is the SRA making proposals which will have the effect of dramatically overregulating legal undergraduate education, with a particular likelihood of inhibiting, rather than promoting, innovation?

Put more simply again, my main problem is with the extent of the knowledge requirements, the way they will be assessed and the time at which they will be assessed.  We have traveled from a modest ambition to define the skills and competencies of solicitors for 2020, to a knowledge framework which looks familiar to students of the Law Society Finals and a skills framework familiar from the LPC.  In other words, we have a solicitor’s framework defined, in broad terms, by the Law Society in the 1990s, with the unfortunate language of Part I and Part II thrown in for good measure.

My assumption is that the defining of knowledge across 13 categories and the freeing of the assessment of these categories from the LPC will broadly lead to two types of undergraduate legal education:

  • Group A – a selection of the Russell Group/Golden Triangle law schools that will seek to protect traditional approaches to legal education; and,
  • Group B – the remainder that will, with greater or lesser willingness, be driven by competition for students to teach as many of the knowledge categories in the SQE as possible.

As a result, unless the SQE assessment proves spectacularly successful at upsetting perceptions of law school hierarchy amongst law firms, then the SQE is likely to enforce a segmentation of the legal education market which will reinforce and exacerbate existing problems within the recruitment market for trainees.  As such there is a significant likelihood that the proposals will weaken not strengthen diversity within the legal profession.

The final concern about such an extensive, and backward looking, definition of knowledge requirements is that, depending on the true nature and extent of these, there is a severe risk that the SRA will define out space for substantive innovation in undergraduate legal curricula (save perhaps in those law schools least interested in thinking about how such curricula might better service students and the professions, potentially further cementing the status of Group A).

It also seems likely, on our current state of knowledge about the assessment mechanisms and the approach, that the SQE will drive a prioritisation of a limited kind of knowledge (and a particularly legal kind of knowledge) over the crucial elements that a high quality legal education could provide: understanding law in context; critical thinking; and innovation in thought about law.  In particular, the more the SRA defines, the less space for innovation there is.  This is a plea, and to be honest I am sufficiently worried about the SRA’s proposals to be genuinely pleading, for a dramatically more proportionate approach.

I make some more specific points and develop some of the themes below.

When should knowledge be tested?

The SRA’s focus is – as stated – on, “assuring consistent and comparable high quality standards at the point of admission across all pathways to qualification”.  In other words, the concern is to be assured of what lawyers know once qualified, not at some point prior to that.  The SQE would permit knowledge tests a significant, possibly limitless, time period prior to qualification.  They will show that a solicitor candidate did, at one time, have relevant knowledge of one or more of the SRA’s key areas.[1]  It will not test whether the solicitor has knowledge of the area within which they will actually be practising, unless their areas of practice map squarely onto the SRA’s knowledge area.  Nor will it test the extent to which their historic knowledge has degraded by the time of the qualification.  With such a poor fit between what needs to be assessed for competence, and what and when something is to be assessed, there ought to be a major rethink and slimming down of the general knowledge components required of a solicitor before the point of qualification.  After all, the key thing about being a professional is that one has the knowledge relevant to one’s area of practice and keeps that knowledge up to date.  The knowledge competences are strangely divorced from this key requirement.

Relatedly, the knowledge elements are very wide, and often only tangentially or minimally related to the practice areas of many solicitors.  The list of subjects can fairly be characterised as some fantasy of a generalist solicitor or a backward looking shopping list of subjects that are have generally been taught at degree or LPC level. The knowledge requirements of most practitioners are almost certainly much more specialised than this list.

Similarly superficial and irrelevant generalism may be less rewarding for students too.   We need innovation in the content of law degrees as much as we need innovation in delivery and assessment.  I am not seeing innovatory possibility in a system which requires every would-be solicitor to study wills and probate, and taxation, and the two litigations, for instance.  Most solicitors function reasonably well having forgotten (I’d wager) most of the property and trusts law they were taught even a few years ago. And to those that say, ah yes but you never know when a trusts point will come up (even though the answer will often be, never), it is just as easy to think of other subjects where this is as or more likely.  Intellectual property and employment law are increasingly central to a great deal of business activity insofar as it involves lawyers and may thus more generally relevant than several of the current crop of requirements.  Sensibly defining knowledge requirements on a subject by subject basis as the SRA has done is a fool’s errand: it is way too over and under-inclusive to be useful.

With the impossibility of sensibly defining a wide knowledge base of this kind for solicitors, comes the freedom to demand a narrower more sensible base.  It might also be observed that it concentrate on what is best assessed early, and which might be seen as core to the ability of young lawyers to develop are more translatable knowledge and skills  – this might include some substantive building blocks (such a proper understanding of precedent and the legal system, EU/UK/HR law, and professional ethics) but concentrate more on the critical reasoning, research and communication skills which enable a young lawyer to research and work with law with confidence and skill.  An SRA concerned about inconsistency[2] can similarly investigate those concerns with much smaller and less inhibiting influence on legal education.

A related problem will be how will an SRA defined curricula develop?  A top-down, knowledge dominated curriculum, drafted in committee is not obviously likely to drive up standards and adapt quickly, or with imagination, to an increasingly global, technology influenced legal services market.

Can the SQE assist with diversity?

Reduced cost is one way in which an SQE may improve diversity.  The potential costs of the SQE itself, and the secondary market for crammers which will quickly evolve, may be offset by potential reductions in the costs of an LPC type course or courses.  It is difficult to predict, therefore, whether reduced costs will really come to pass.

The potential benefits, from a diversity and quality perspective, of better benchmarking of university and candidate quality candidates through national testing is also interesting.  A key to the success of this is preventing the segmentation of the education and recruitment market referred to above.   For diversity to be significantly improved, firms would need to have an early (end of first year undergraduate) and robust indication of a candidates aptitude for law which was a stronger signal of their abilities than, in particular, A-level grades or ‘getting into a good university’.  Or, over time, firms would have to be able to see that identifiably good students from the elite wing were in fact not better than identifiably good students from the non-elite wing.  If a firm could see that, say, a non-Russell Group University had a good crop of high performers on the SQE, they might be more inclined to shift their recruitment from their traditional universities towards that non-Russell Group University if the SQE enables them to make this distinction with confidence.

It is an appealing idea but it is doubtful that this can be achieved.  This is partly because, on my reading of the evidence in your consultation paper, the difficulties of extending the SQE beyond a pass fail distinction mean that the test will be unlikely to distinguish – let alone distinguish robustly – between the merely good student and the good or excellent student that early recruiters of trainees are looking for.  It may also not do so early enough (and of course the earlier it is the more it divorces knowledge requirements further the point of qualification and from graduateness).

It is my judgment that early recruiters of trainee solicitors (which is the area where the biggest diversity problems are) are not going to be swayed towards recruiting from a more diverse set of candidates by the SQE.  Even were a league table of pass rates to develop, the more traditionally prestigious law schools would quickly adapt to the SQE and ensure sufficient uniformity of achievement to not meaningfully advance on diversity grounds.  With a relatively flat range of performance in league tables, firms will be very likely to maintain their traditional recruitment patterns.

The inconsistency problem

A second way in which the SRA needs to think about proportionality is in relation to the way it responds to concerns about different pass levels on the LPC, the potential differences in assessment regimes at the undergraduate level, and a lack of knowledge about the quality of the ‘signing off’ system for qualification (where there is no discussion of the historic arrangements for training contract monitoring).

In so far as the SRA has evidence of competence problems, the SRA is much more hazy about the educational deficits that cause them. In fact it has no robust evidence, at least that I have seen, of the ways in which educational and training process is linked to or can be improved sufficiently to improve competence.  This is a strange basis for deregulating the LPC and super-regulating LLBs.  Testing a wide variety of sometimes irrelevant legal knowledge three years or more before practice is not an obviously strong candidate for significantly improving the competence of lawyers.  Still less is it proportionate.  The acid test of the need for SRA reforms is what is likely to work?  The SRA does not know and so relies instead on solving another problem (consistency and comparability)  which they do not in fact have the evidence to establish and diagnose with precision.

Consistency and comparability is very important, but if legal education is to flourish and innovate there has to be room for variation in what is taught.  The SQE poses a major threat to this, and this is doubly true without the SRA being able to diagnose a) whether, let alone how, the extent and nature of a competence problem is related to any inconsistency in assessment standards; and b) how differently regulated systems of legal education and qualification will be likely to fix the undiagnosed problem.   Moreover the SRA puts enormous faith in the quality of, as yet, undeveloped tests to deliver baseline indicators of competence. In this way the SRA has landed on the idea that it can and should prescribe and regulate the substance but should deregulate the process of what is taught in the potentially folorn hope that this will reduce costs and without being sure yet that their competence tests will be anywhere near good enough.  For undergraduates this substance concentrates on a computer assessed test of knowledge, when skills and competencies might be more core and more appropriate for a graduate level qualification.

With evidence of the linkages between competence and training so absent, as the SRA’s consultants acknowledge, [3] I would have thought the place to start is with assessing competence at the point of qualification and work backwards, establishing what is going wrong and then tracing the causes back to targeted solutions.    Similarly, the SQE would be much more wisely brought in incrementally, allowing all the stakeholders, but particularly the SRA, to develop its understanding and improve its implementation.  It follows that there is a great deal of uncertainty and vulnerability in the proposals which would benefit from a significantly more measured approach.

The reserved services problem

As I understand it, one of the reasons for the rather wide set of statements of knowledge which solicitors would be required to have relates to reserved activities.  This seems to be another area where a more proportionate approach can be imagined and one that fits more with the increased flexibility of the CPD regime.  It seems to me much more reasonable for the SRA to specify knowledge requirements that a solicitor requires to be able to practice in a reserved area and requires that, prior to practising in that reserved area, the solicitor has to pass the relevant knowledge and – if relevant – skills tests. If a solicitor does not practice in a reserved area they do not need the knowledge and skills to do so. If they do practice, they need to pass the relevant assessments, perhaps with the ability to work under supervision until they reach that point as any paralegal would be able to do.  This would significantly reduce the extent of the SQE knowledge requirements, reduce costs and make (some modest) diversity gains more likely.  It would be more flexible, and permit more innovation. And it would ensure training in the reserved areas was relevant and proximate to practice.  It need not even be necessary to have a reserved services licensing scheme – it would be relatively easy the SRA, LeO and Insurers to pick up complaints where a solicitor is practising in an area where they need a set of reserved legal services knowledge and skills assessments.  Ex post regulation here is probably sufficient.

Further inflexibilities

There is a suggestion that skills assessments be mainly confined to reserved areas, and that contexts should include transactional and litigation contexts.  This is another unnecessary inflexibility.  Why focus on this distinction? What is the bewitching power of transaction vs litigation over the profession’s consciousness? Why not, for example, require that lawyers have to have worked for claimants and defendants – a more illuminating difference than transactional vs litigation work in my opinion – or businesses and individuals?[4] The transaction litigation divide seems to me to be focusing on surface detail rather than looking carefully at the underlying skills or competences that are really necessary to practice as a solicitor. If one follows the logic of the SRA position and asks, what are the uniquely transactional competences required in reserved activities, the importance of transactional skills starts to look rather suspiciously small.

Afterword

I am an academic (and former solicitor) who has spent the entirety of my career working at the interface between practice and academia.  I believe that legal education should change to deepen its relationship with practice, but also that the profession needs to take more seriously the need for a vigorous, independent and research active academy able to engage with, evaluate and generate ideas on the future of legal practice.  The often stated tension between a liberal law degree and the education of neophyte practitioners is a false dichotomy but it is a false dichotomy sponsored by practice and the academy to protect traditional ways of working.

That said, the prescription of thirteen knowledge areas represents a wholly and foolishly disproportionate attempt to break down this dichotomy.  Not only are the knowledge requirements over-inclusive, but they are also under-inclusive.  For most solicitors, the main bodies of legal knowledge they would draw upon every day to be competent would be of a different nature and order.  As a scheme to deliver an assurance of competence it misses its key target – the knowledge that practitioners actually use on qualification to deliver on their client’s needs.

Quite aside from any question about the harmful impact of such a knowledge-dominated curriculum, assessed in the way the SRA envisages, on the quality of legal education there is a major question-mark over the adaptability and responsiveness of such a curriculum. The SRA has championed the need for regulators to step back from regulating unless absolutely necessary, and more pertinently, has also lauded the need for innovation and adaptability in the legal service market and yet is proposing a top-down, highly prescriptive framework which it will have to manage and update with a high degree of centralization and (one must predict) a low degree of fleetness of foot.  The potential for sclerosis is obvious and will in my view be enormously harmful to the long term health of the curriculum and the profession.

[1] Depending on how the knowledge areas are clustered together.

[2] Although it should be noted the SRA is not able to link competence problems to evidence of inconsistency in degree and LPC awards.

[3] The SRA’s economic impact assessment states, for example, “comprehensive evidence does not exist that links low quality advice to the qualification requirements.”

[4] I am not genuinely suggesting these things as requirements, merely that alternative distinctions might be more powerful in training and competence terms than the transaction/litigation one.

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Calling on in-house lawers…

I have posted this on the Ethical Leadership for In-House Lawyers blog, so apologies if you have seen this already, but I wanted to ensure maximum exposure for an initiative we are very excited about…

Be part of the conversation – A roundtable discussion with Paul Gilbert of LBC Wise Counsel facilitating

In 2015 a major new project was launched to research and engage in-house lawyers on the role of the General Counsel in the context of Ethical Leadership.

The project is led by Professor Richard Moorhead, Professor Stephen Mayson both of UCL Centre for Ethics and Law (CELs), Paul Gilbert of LBC Wise Counsel and Steven Vaughan of the Centre for Professional Legal Education and Research (CEPLER).

The project has attracted the interest of the SRA and we believe it is the first time this important subject has been systematically researched with in-house lawyers at the heart of the conversation.

In 2015 the first phase of the project was to undertake an online survey of in-house counsel. The full results of the survey will be published this year along with the commentary of in-house lawyers in conversation with the project team.

This therefore is your invitation to attend a roundtable “town hall” conversation and to be part of the debate. The meetings will be held in March, April, May and June. Emerging themes from the survey will be shared, but crucially we want your views to be heard. Each conversation will be under the Chatham House rule so we can all speak freely without attribution. It is a unique study and your insights are vital for the research.

There is no fee to attend any roundtable meeting, we simply want you to come. It does not matter your sector, the size of your team or your seniority. Your views matter as an in-house lawyer today, so please be heard. Meetings are schedule for just two hours and hopefully at times that are not disruptive for the working day.

Dates and venues:

  1. 7 March 8am to 10am Sheffield at the offices of Irwin Mitchell
  2. 7 March 5pm to 7pm Birmingham at the offices of Irwin Mitchell
  3. 9 March 5pm to 7pm Manchester at the offices of Irwin Mitchell
  4. 10 March 8am to 10am London at the offices of Irwin Mitchell
  5. 10 March 5pm to 7pm London at the offices of Irwin Mitchell
  6. 20 April 5pm to 7pm London at the offices of Bevan Brittan
  7. 21 April 12.30 – 2.30 Leeds at the offices of Bevan Brittan
  8. 26 April 8am to 10am Bristol at the offices of Bevan Brittan
  9. 26 April 5pm to 7pm Bristol at the offices of Bevan Brittan
  10. 11 May 430pm to 630pm Birmingham at the offices of Bevan Brittan
  11. 2 June 6pm to 8pm London at the offices of Norton Rose Fulbright

In order to secure your place at the table, please reply to Tina Harris th@lbcwisecounsel.com or Paul Gilbert pg@lbcwisecounsel.com indicating which meeting you wish to attend. They will then write to confirm your place and full venue details.

You will not be added to a mailing list by registering your interest.

More on the project:

There is growing evidence, research and some anecdotal commentary to suggest that the role of GC is under increasing pressure and that the professional ethical boundaries are not as elegantly drawn as may be helpful for our increasingly sophisticated world of work. While it seems fair to assume that no one relishes more regulation, and more regulation of in-house lawyers/lawyers may be inappropriate anyway, it is interesting to note that there are no qualifications needed to be a General Counsel, no commonly accepted guiding principles for the role and no requirements on business to create an environment in which it is appropriate to employ in-house lawyers. In addition the types of GC role vary dramatically from strategic executive consigliere to transactional specialist. As a result the expectations of business of the GC role vary widely as well.

This initiative therefore is not a call for new or more regulation. It is however a call for in-house lawyers to come together (sometimes with other stakeholders) to debate the role of the General Counsel, its ethical framework and then to suggest the principles that could guide the role. We are certain that in-house lawyers know best what the tough issues are and how they manage them. This is therefore a facilitated forum for debate, a place to offer and share insight, to share resources and help shape the needs of the General Counsel as well as serving the interests of the profession and of business.

Please be involved. Please pass the invitation on to colleagues, friends and contacts who are in-house lawyers as well. Please be part of the debate.

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What to make of the SRA’s Independence Survey?

The SRA’s polling data which – I would say impressionistically – has garnered unusually high levels of media interest outside of the legal press – is worth a quick look. I’m not sure how relevant it is to the current debate about extent of the SRA’s independence from the Law Society. As the questions are phrased and asked, the survey respondents may have got the impression that profession was self-regulated and independence was being considered.   The truth is much more nuanced; in fact, it’s not really like that at all. What the SRA and the Law Society are really fighting about is the difference between substantial independence and total independence from the profession’s representative body.  Oh, and money.  It’s a fair and important fight but I’m not sure the consumer poll gives us much insight into either question.  And I say that as an instinctive supporter of a more independent model.  Indeed, to prove the point, I look forward to the Law Society conducting a futile counter-poll which says something like, Do you agree that the experts should have a say in regulation of legal services or do you think that faceless* bureaucrats who will pander to government and not protect your interests should build their own empire.

Even so, there is something of interest in the data.  That is the extent to which the public appear to mistrust self-regulation.  Only 6% though that solicitors should be self-regulated. No matter how much one wonders what the public understood by self-regulation, or whether they understood that solicitors aren’t currently self-regulated, that is a very low figure indeed.  The second  thing of interest is the very high proportion of the public felt that solicitors needed to be regulated: 86%.  I wonder how much that figure will get quoted when the SRA are proposing further deregulation.  We shall see.

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* They’re not really faceless. And I don’t really think the Law Society would conduct such a poll, although some regulators have been almost that dumb in the past.

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Background statistics

The background of trainee solicitors in the larger City firms is under scrutiny again this week.  The Times (£) reports a piece of research done by Chambers suggesting on their sampling (which it is difficult to scrutinise from the story):

69 per cent of the magic circle firms’ trainees had gone to private schools, compared with 31 per cent from state schools.

The position in the City firms generally was more even at 48 per cent/52 per cent, while London firms outside the City and those outside London reported about two thirds of their trainees were from state schools.

Nine of the 18 firms taking part in the City Solicitors Horizons’ initiative to combat the “poshness bias” in the legal profession responded to the Chambers survey. At seven of those firms, between 52 per cent and 75 per cent of their trainees had been privately educated, with two reversing the trend – at Macfarlanes, 65 per cent had been to state schools and at Pinsent Masons 67 per cent.

If the figures are close to correct, even the ‘better’ profiles are alarmingly bad. The story’s also interesting because it hints that the US firms take a more egalitarian approach by recruiting from a wider range of Universities. Perhaps they have looked beyond the polish and found the spit?

Meanwhile Alex Novarese takes some time to remind the readership of Legal Business that law firms may have gone backwards on this:

You may have noticed [he tells them, that] a decent chunk of your veteran rainmakers aren’t that posh. There’s a reason for that.

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