Weekly round-up: e-commerce, outsourcing, negligence and law firm websites

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By Legal Futures

27 August 2010

E-commerce: European Commission wants to encourage more in the legal profession

Our weekly round-up of other interesting regulation/Legal Services Act type stories begins with the Law Society Gazette’s ever-interesting Euro blog by Jonathan Goldsmith, secretary-general of Council of Bars and Law Societies of Europe. He looks at a European Commission consultation on how it can encourage e-commerce, with lawyers one of the key targets. Outsourcing, comparsion websites and virtual office models are among those issues facing the profession, he notes, concluding: “It always takes a few decades for big changes to reach the legal profession. It seems that they are now about to hit us, and regulators should be prepared. A new vision is required from all of us.” Click here.

Still with the Gazette, I was struck by the comments posted on the story of the recent survey by LawyerLocator (first reported here on Legal Futures, I should point out). The wildly contrasting views on whether the Legal Services Act will bring about revolution or a damp squib neatly encapsulate the internal struggle going on in the solicitors’ profession. Click here

The Financial Times reported earlier this week that the government is pursuing negligence claims against law firms that advised the nationalised Bradford & Bingley on hundreds of buy-to-let loans that are facing losses.

It is alleging that anti-fraud guidelines were ignored by firms that advised on “same-day remortgaging”, a practice that was promoted by buy-to-let investment clubs at the height of the property boom. Investors were encouraged by real estate entrepreneurs to buy property from distressed sellers or developers that were being offered at below market value using a one-day bridging loan. Investors then remortgaged on the same day at the open market value of the property, allowing them to bank a quick profit.

Alleged breaches of the Council of Mortgage Lenders’ code include failing to report that borrowers had acquired their properties less than six months before remortgaging, for example, would be in breach of the lending code. Click here (subscription required).

The recent Panorama programme on will-writers has done a lot of good in terms of exposing the issue to the public and hopefully making them think more carefully about their options. See this article in Money Marketing as a good example. Click here

The launch of legal bidding Bid4fees has caught the interest of Sally Holdaway of consultancy Legal Edge. Her blog suggests that though bidding sites are under-developed in the profession right now, the concept is likely to grow because they offer “a halfway house between obtaining clients through traditional channels and paying referral fees”. Click here

It is often forgotten that two of the eight approved regulators are intellectual property bodies, which have joined forces to form IPReg, the Intellectual Property Regulation Board. It was interesting to see rumours on the IPKat blog that IPReg might lead to a major hike in practising fees, inevitably leading to questions of what IPReg is actually going to do and whether it is worth the money. Click here.

Which? has welcomed a Solicitors Regulation Authority (SRA) decision to refer ACS Law to the Solicitors Disciplinary Tribunal after the consumer group complained about  letters to file-sharers that it claimed were “bullying”. Which? also has a pop at the speed with which the SRA and tribunal are dealing with other, similar complaints, although is pleasingly balanced in giving the SRA a right of reply. Click here. ACS Law has been in the firing line for some time and earlier this year owner Andrew Crossley responded to the criticisms on the firm’s website. Click here.

I’ve been hearing some stories recently about bogus solicitors – there’s one knocking around in the Peterborough area, for example, whose “office” is apparently a pub – and the Daily Mail this week went big on a family who claims they were duped out of the money they put up for a house by bogus solicitors. They are now pursuing a negligence action having instructed “swanky City outfit” Holman Fenwick & Willan. Click here.

In the US, the Minnesota Lawyer website has republished a useful white paper by solicitor Mark Ross, vice-president of legal services at outsourcing provider Integreon, on the ethical issues thrown up by legal process outsourcing and how the conduct rules in both the UK and US handle them.

Though US regulators have given the subject more thought, he finds that in both countries the outsourcing lawyer must ensure adequate supervision is in place by a lawyer within the firm competent to perform the particular legal task and to evaluate the work undertaken by the legal outsourcing company. In addition, in the UK, the Data Protection Act also contains provisions relating to the transfer of data overseas. Click here.

An article by US legal consulting firm Adam Smith, Esq also looks at outsourcing, and raises some interesting issues around low-cost competitors, such as how premium brands should respond, how they change client behaviour (think low-cost airlines) and the risk that they will in time begin to move upmarket.

The article concludes: “The bad news is that the days of charging $300/hour to have Ivy League graduates review documents are over, but the good news is that that mind-numbing experience will no longer be a rite of passage and you might actually have to provide your associates with more interesting work clients will pay for. In the bargain, your associates will be speeding their development into becoming real lawyers.” Click here.

Finally, US law firm consultant Matt Homman has produced this amusing and all-too-accurate Venn diagram of how lawyers and clients see law firm websites. Click here.

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