First news for the New Year

By Jean-Marc Baïssus, CEO, Fondation pour le droit continental

On October 6, 2011, the first English « alternative business structures » will see the light of day. These are new forms of business organizations for lawyers, in the wake of a series of reforms introduced in 2007. With the aim to open up access to legal services and to rejuvenate professional structures, the English lawmaker has decided to allow investors outside the legal world to become shareholders and even majority holders in law firms. Next to an entrance « test » provided at the licensing stage to ensure that the new owners are acceptable investors in this particular field, the rules see to it that the actual practice of law is ring-fenced against any interference by the non-lawyers, be they the majority shareholders. This law earned the nickname of “Tesco law”, the name of a supermarket chain, because of the fear expressed by many small- and medium-sized firms of being competed against and ultimately defeated by the provision of legal services through major stores. One also has recently learned that Slater et Gordon, the first law firm to have been floated on a stock exchange, in 2007 in Australia, has just bought up one of its competitors for an amount of 35 million Australian dollars (26 million Euros), after acquiring no less than six other firms in 2011, whilst its earnings have increased by 21 % over a year. The Rio Tinto group hopes to diminish its yearly legal bill to the tune of 100 million U.S. dollars through the outsourcing of some 20 % of the legal services it requires. The New York Times recently reported that « since 2008, some 15,000 attorney and legal-staff jobs at large firms have vanished ». At the same time three prospective Australian barristers out of four cannot find a pupillage and have to give up on their professional ambition, whereas they are often due to repay student loans.

No need to dwell any further on these examples. They mean that common law jurists are experiencing a tectonic shift in the way they operate, and this cannot leave continental law countries indifferent. The competition for the provision of legal services knows fewer and fewer borders and one has to adapt. This is the reason for a number of ongoing discussions in France.

Nevertheless, there is no case to rush headlong and attempt to copy the evolution under way in Australia, England or the United States. Such an evolution is due to different local circumstances and we would always at least be one step behind anyway. Such challenges should, quite to the contrary, been seen as opportunities to better distinguish the assets of the way legal advice and legal certainty is brought in our system of law. Specifically, the independence of the lawyers and the fundamental meaning of professional regulations should be underlined. They embody a different way of protecting clients, different from that approach which only sees in him the consumer focused on getting the best price for the service he intends to buy. An improved analysis of the intrinsic qualities of our legal system has to be pushed further in order to have it acknowledged as a viable and performance-oriented alternative to a series of choices solely dictated by the strictures of the deregulation credo. This of course should not hinder in any way a constant dedication to improving this very same system.

May you enjoy a happy New Year and may 2011 be for you the opportunity for great personal and professional satisfaction.