ABSs - the idea which won’t go away

I can’t decide which of the following statements is true: too much has been written about alternative business structures, or not enough can ever be written about them. I hope it is the latter, since I am about to add to the literature.

Hardly a week goes by without the topic cropping up (and I mean outside the UK). This week two items from different jurisdictions – Ireland and Canada – crossed my desk, and made me realise that, love ’em or hate ’em, ABSs continue to reverberate around the world.

In Ireland, the Bar Council had a conference a few days ago arising out of the legislative revival of the country’s Legal Services Regulation Bill 2011. One of the bill’s clauses presently allows for the introduction of ABSs to Ireland, and the bar has concerns about the implications for a sole trader independent referral bar.

The Canadian Bar Association meanwhile has a Legal Futures Initiative. You will not be shocked to hear that one of the questions under discussion is the following: ‘What are the implications of non-lawyers owning or managing a law firm? Consider this: What if anyone could sell legal services using employed lawyers? What if lawyers could obtain clients, infrastructure, and access to specialised expertise by joining a legal services franchise?’

At every conference I attend, the topic is on the programme. The idea is like a clinging child, following lawyers from room to room. Even in countries where it is not being set up for launch, there is a debate about what to do about those which might cross the border from countries where it is allowed. When I meet foreign bars, including those not from the common law tradition, the topic is usually on the agenda, and several foreign bars follow developments closely.

Curiously, the idea is commonly seen as a British one – this mad nation of shop-keepers, who think only of prices – even though it originated in Australia.

I have reported before that the current recommendation in Europe, from a study paid for by the European Commission on whether the laws on this and other free movement rules should be changed, is that the present ability of member states to ban ABSs from entering their borders should continue (albeit that the grounds for possible refusal should change).

Opponents have to concede, whether they like it or not, that this is an idea whose time appears to have come. It does not mean that the concept is right or will succeed. Ideas whose time has come can be disasters (witness communism in the twentieth century, although I apologise for the unfair and extreme comparison). Opponents have many arguments to throw at ABSs: there is no research to show that it will succeed; there is no evidence that clients want it; the ideology which gave rise to it – more market liberalisation – has produced catastrophic results over the last few years; and then the classic arguments submitted by most professional bodies that it puts the independence of the legal profession at risk. It doesn’t matter what arguments are raised – like a monster from outer space against which human weapons are useless, it sails on!

The principal reason for its continued reverberation is that governments like it. I am not aware of any legal profession introducing ABSs spontaneously (proponents of ABSs might echo Mandy Rice-Davies here, and say ‘Well they wouldn’t, would they?’), nor of it having arisen through consumer pressure. It is difficult to find many lawyers who rush up to declare how much they love ABSs. It is government pressure, to enable a liberalisation agenda. Governments like it because it breaks a monopoly. On the basis of no hard evidence, they believe that removing the monopoly on ownership of law firms will improve access to justice. Watching the legal aid debate unroll in the UK and elsewhere, you have to question whether access to justice is really a governmental priority. It seems to be a priority only when it causes challenges for others to meet.

Opponents have little choice now but to endure the debate for further years at international level. Either ABSs really are the best thing since fish fingers, whereupon the argument is effectively over and we will all in time join up. Or they are like my unfair comparison with communism, and will in time implode from their own contradictions. Of course, both sides will continue to make their case. But no power on earth can make an idea disappear whose time appears to have come.

Jonathan Goldsmith is secretary general of the Council of Bars and Law Societies of Europe, which represents around a million European lawyers through its member bars and law societies. He blogs weekly for the Gazette on European affairs