BACKGROUND

In December 2004 Sir David Clementi finally concluded his wide-ranging review into the provision of legal services. The potential consequences of his findings could bring about the most significant wave of change to the legal profession in its history, and create a markedly different landscape from that which you are working to enter right now. What is the reason for the review, what will happen in the immediate future and how will it affect future entry to the profession? Essentially, how will it affect you, as someone at the beginning of his/her legal career?

Why?

The reasons for the review stem back to Labour's election victory of 1997. The government has carried out comprehensive reviews and subsequent reforms in numerous public and private sectors in its ensuing eight years in power. For example, the provision of financial services has been radically altered by the creation of the Financial Services Authority (something which the revised content of the LPC and PSC will have made you aware).

It's no secret that as lawyers we routinely receive bad press and are frequently put in a similar bracket to politicians and estate agents by the media. Around 17,000 complaints a year to the Law Society's Consumer Complaints Service have fuelled this perception. Consumer groups in particular have always taken issue with the way that the profession is self-regulatory. As things stand, a client complaint will pass through the ranks in a firm until the partner who deals with complaints or the practice manager makes a decision on its merits. If the client remains dissatisfied, he/she can take the matter to the Law Society.

Unfortunately, it isn't quite that straightforward, with the government identifying 23 individual regulators of legal services. These include:

• the legal services complaints commissioner, an office created in October 2003 by the Lord Chancellor, Lord Falconer;
• the Lord Chancellor himself;
• the Master of the Rolls;
• service regulators, such as the Council for Licensed Conveyancers; and
• large purchasers of legal services like the Legal Services Commission, which technically instruct lawyers how to operate.

However, the Law Society is still a body created and run by the profession, and the public perception has always been that the handling of complaints is a 'closed shop', with lawyers looking after the interests of other lawyers.

THE REVIEW

The government felt that it had to do something to correct this general perception. Sir David was commissioned to carry out a wholesale review of the provision of legal services in England and Wales. The brief he was given was total. Not only did he look at reforming the way the profession is regulated, he considered the fabric of the profession itself, specifically in relation to legal disciplinary practices (LDPs, where solicitors, barristers and/or legal executives set up together) and multi-disciplinary practices (MDPs, where solicitors or other legal professionals, and accountants or other non-legal professionals set up together).

It is important to remember that the review covers the provision of all legal services, not just those offered by solicitors, barristers and legal executives. The activities of patent agents, licensed conveyancers, will-writers and trademark attorneys are all considered by the review and could consequently be subject to wide-ranging reform.

The Consultation Process

A consultation paper was produced, setting out the various issues under review and inviting responses from all interested parties. Three regulatory models were considered:

Model 'A' would at a stroke replace the Law Society, the Bar and the Institute of Legal Executives with a single "super regulator". The Legal Services Authority would regulate the provision of all legal services, in the same way that the Financial Services Authority governs the financial services sector.

Model 'B' would affirm the status quo, with the Law Society, Bar and ILEX still dealing with regulation, representation and training, but with an additional upper tier created to review their actions. The Legal Services Board would act in a similar way to the Strategic Rail Authority in the way it oversees the running of the rail network.

Model 'B+', a variation of Model B, would see the professional bodies devolving representation from their regulatory functions.

The TSG/YSG Joint Response

The Law Society produced a response to the consultation paper, but both the TSG and the Young Solicitors Group (YSG) wanted to make their own statements on the potential future running of the profession. By joining forces and producing a joint response, the groups were able to set out a unique position on behalf of the combined membership of 104,000.

A joint working party created a thorough response to the consultation, coming up with its own unique 'Model A-'. The crux of the solution was that a Legal Services Board (LSB) should oversee the other professional regulatory bodies, dealing with complaints and discipline within the profession. The Law Society, Bar Council and other professional bodies would retain their regulatory and enforcement functions, and continue to be responsible for training and standards. However, these bodies would no longer carry out the dual function of regulating and representing the profession. Separate, independent professional bodies would be created to protect the interests of solicitors, barristers, licensed conveyancers and others. LDPs and MDPs could also flourish under the authority of the new LSB.

Please click here to see a copy of the JOINT RESPONSE.

The Conclusions of the Review

Sir David has essentially concluded his review by following a version of B+, which takes on board many of the recommendations in the TSG/YSG response. The LSB would become a reality, while an Office of Legal Complaints would also be established.

In effect, the LSB would be an independent legal services regulator accountable to Parliament. It would promote the interests of consumers and the public over the interests of legal services' providers. While not reaching conclusions on quite such a radical scale as those envisaged by Model A, Sir David acknowledged that rather than starting from scratch, the present system needs effective reform. Crucially, the LSB would be run by a majority of non-legally trained staff, while both its chairperson and CEO would come from non-legal backgrounds.

The Law Society, Bar Council and other professional regulatory bodies would have to separate out their regulatory and representative powers as envisaged in the TSG/YSG response.

The Office for Legal Complaints would function under the supervision of the LSB. Meanwhile the legal services ombudsman and the legal services complaints commissioner would also be abolished, removing some of the current regulatory maze that consumers find so confusing.

Meanwhile, LDPs would be permitted, with a general code of practice to be agreed and enforced by the new LSB. Non-lawyers would be able to become partners in these businesses. Sir David sees LDPs as being the acid test, with their success allowing for the possibility of MDPs in the future, provided adequate regulation is in place.

HOW WILL THIS AFFECT TSG MEMBERS?

The practical consequences of the Clementi Review for students and trainees are that much of the client care and conduct good practice that is being taught now will be superseded in the near future. LPC students at present receive an early introduction to the ubiquitous 'guide' and trainees have a working knowledge of its contents by the time they are admitted to the roll of solicitors at the conclusion of training.

If the review's recommendations become a reality, a new and much clearer complaints system will be the biggest difference, and the managing of client care will likely receive greater emphasis during the training process, particularly as firms get to grips with a new regime. Furthermore, in the event that LDPs become a reality, the breadth of experience available on a training contract has the potential to be greatly enhanced, especially working with non-lawyers within a firm.