The legal profession, for the regulation and representation of which the Council of the Law Society has managerial responsibility, is beset by:
- the exclusion of many small firms from residential conveyancing by the actions of Lloyds Banking Group and other lenders;
- the increasing replacement of private practitioners by state employees in legally aided court work;
- a damaging division in the profession in reaction to each of the above;
- widespread redundancies and short time in the teeth of a grim recession;
- a weak housing market exacerbated by continuing problems from the operation of discredited home reports;
- prospective exposure of the profession to unequal competition with externally capitalised and unqualified legal services providers.
While these problems threaten the survival of an independent profession and call for outward-looking leadership, the Council looks inwards and addresses itself to the writing of its own new constitution. This is the wrong time for that exercise, fails to focus on the real issues of the moment, and does not provide the leadership, regulation or representation which is called, and paid, for in these circumstances.
It is the wrong time especially because the near future holds possibilities which would so change the landscape of legal professional service that further constitutional change is likely to be called for. It would appear to make sense therefore to hold up the changes to the constitution until we find out whether or not the profession is to be joined in the provision of legal services by those ABSs envisaged by the Legal Services Act (Scotland) Act 2010 and whether the Society is to regulate the same or, if not, who is to do so; and it seems to make very little sense to attempt to finalise a constitution while these balls are still in the air.
Solicitors can hardly be expected to focus on constitutional issues when fighting on so many fronts for survival, and it would be an immense misfortune if these distractions led the profession to permit this document to proceed, because it is seriously flawed.
Never mind that our representative body proposes that its ruling Council should not be bound by majority decisions of its own general meetings (article 12.10); never mind that it seeks to continue and exacerbate the conflict of acting as both regulator and representative for the profession; and never mind that it provides for that regulatory function to be extended to other businesses with whom the profession may well be in competition and even conflict: because the real horror show is neatly hidden away in article 16.1.3 which authorises Council to set out in its own standing orders (which cannot be overseen, challenged or adjusted by the members), the detailed provisions for the regulation, including accounting requirements, of the ABSs or non-solicitor-controlled legal service providers promised by the 2010 Act.
Therefore our future profession, in which the members guarantee without limit and down to their houses, chattels and possibly even pension funds, each other’s honesty – but with a clear sight of and control over the strict accounting requirements and standards which govern all concerned – will now be obliged to extend that guarantee to those non-solicitor-controlled entities over whose accounting requirements and standards they will have no input, say or control. The device of regulating ABSs by means of standing orders tacked on to the constitution of solicitors is completely misconceived and proposes an immense threat to the survival of the Guarantee Fund and even the personal financial standing of solicitors.
Further, my own understanding is that the Council may even intend to extend the Master Policy to ABSs/legal service providers under the auspices of article 16.1.3; but surely this would pose an unacceptable risk upon the policy. Nevertheless, 16.1.3 would appear to allow Council to impose this risk upon the profession – through standing orders. On the face of it, the new constitution would allow Council to do these things, all without reference to the membership of the Society and, in particular, without reference to those solicitors whose money funds the Master Policy.
However, even if the foregoing issues are matters of debate and opinion, the constitution is fatally holed below the waterline in article 16.1.4, which simply authorises Council to use standing orders for anything it sees fit. With that provision, no constitution is required and, even if one is put in place, Council is authorised by that constitution to do whatever it sees fit, without restriction by the terms of that constitution, and again without reference to the membership of the Society. The draft constitution is the wrong document at the wrong time and should be voted down.Michael Sheridan is secretary of the Scottish Law Agents Society