Sunday, August 14, 2011

Reforming the Legal Profession: "You're not going to argue with a doctor when your pants are down around your ankles"

The Minister for Enterprise, Mr Richard Bruton, has been taking some bold steps since he assumed office. In that vein, he continues to take aim at the legal profession, which he believes is acting like a cartel. Some of his recent views, via an article in the Irish Independent: ... Ireland's competitiveness was being damaged by a legal "cartel", but he noted that while "people were not going into a room" together to set up prices, "custom and practice had grown up in a manner that was very comfortable" for our over-paid lawyers.
He added that the current "pricing relationship" involving the hiring of senior counsel, junior counsel and solicitors had "no place" in a modern, competitive economy.
Mr Bruton also reiterated a recent warning to the legal profession that there would have to be fundamental structural changes in how they operated if we were to create "a competitive market structure".
Unlike other industries such as supermarkets, "simply asking people to shop around is not realistic" because seeing a barrister is "like visiting a hospital consultant.

I doubt if the analogy between doctors and barristers works. At the highest level - where fees are in the millions - the clients are typically very commercially sophisticated, and possess the ability to choose between lawyers. To be sure, the small size of this jurisdiction might constrain choice somewhat, but I don't think there is much need for paternalistic intervention at the top level. The problem is more at the bottom level where routine legal work is over-priced. Drafting documents, arguing small claims etc ought to be less expensive, reflecting the level of expertise, time, and skill involved. This is where the ordinary consumer finds himself at a difficulty when he needs legal services. The legal profession in most jurisdictions has been unwilling to tackle this problem. Predictably, other providers have jumped into the market - as in the U.S. - and are offering cheaper services for drafting wills, leases etc. It is only a matter of time before similar services become more widely prevalent.

I wonder if Mr Bruton will go whole hog and strike at the separation between Barristers and Solicitors. Intuitively, removing this artificial and archaic divide ought to have some effect on the cost of legal services, while enhancing consumer choice and competition. It would also be helpful if the government were to modernise the court system - for e.g. by providing electronic public access to filings, requiring written arguments which are publicly accessible, etc - while it is tackling the legal profession.