Reservation nerds and proud of it

2012: despite "fast-tracking" decision, LSB won't decide on reserving will-writing until next year

Not many people get as excited by reserved legal activities as I do, but Professor Stephen Mayson surpasses even my interest in the subject. And he’s always quite happy for me to describe him as a reservation nerd, so I shall do so again.

For proof, look no further than the 70 closely argued pages that make up The regulation of legal services: What is the case for reservation?, published today. Having uncovered the more than shaky history of the current list of reserved activities last year, he now makes a rigorous examination of the regulatory objectives underpinning the Legal Services Act 2007, the public interest, the various forms of regulation and finally the areas of work that either are or should or should not be reserved. It’s an impressive piece of work.

I have written about it in The Times today as well (and unfortunately a couple of small factual errors have found their way into the final version), but for those of you without the paper or access to the website, there are some key points to consider:

  • Research shows the public think all legal services providers are regulated.
  • Anyone can call themselves a lawyer or a legal adviser or a legal consultant or just plain legally qualified (perhaps they have a law degree).
  • The fact that vast swathes of legal work are unreserved has allowed, for better or worse (and for these purposes I make no judgement), non-lawyers to gain significant footholds in markets such as will-writing and employment advice.
  • With non-legal brands set to enter the market this October with the advent of alternative business structures (ABSs), the scope of reserved legal activities could determine the future shape of the market. Last month the Legal Services Consumer Panel warned that neither law firms nor ABSs should be allowed to dodge regulation by establishing separate businesses to handle unreserved work. The Solicitors Regulation Authority is planning to retain the separate business rule for that very purpose. But be sure that people are already looking into how they can get around it post-ABSs.

Professor Mayson makes his case for expanding the range of reserved activities well, although I think his failure to consider employment advice is a notable flaw as it is one of the markets most penetrated by non-lawyers and has always been second to will-writing in the list of areas about which I’ve heard complaints (which may just be solicitors crying wolf over the loss of market share).

But the frustration for me is just how long this debate is taking to play out. The pressure from Panorama in particular seemed to bounce the Legal Services Board (LSB) into announcing last summer that it would fast-track a decision on whether will-writing should be reserved. Since then, speed has not been especially evident. As I have reported before, .

In parallel to this is the LSB’s work to create a framework in which to make all decisions about reservation, and it will shortly publish a report from Professor George Yarrow, chairman of the Regulatory Policy Institute, on the economic case for legal regulation. Conveniently it looks like this strand of work is catching up with the will-writing project.

Of course this topic is too important to rush, but Russell Wallman, head of government relations, is among those disappointed the LSB is not moving more quickly in relation to will-writing. Where there is a real need, you don’t need to construct theoretical models first, he contends.

I think it a shame that there wasn’t an earlier recognition of how important this is, so that the work on reserved activities could have been done in tandem with preparations for alternative business structures. The two are so closely linked. The LSB argues that a couple of years ago, hardly anybody was talking about reserved activities. Even if that’s true, so what? The LSB should have recognised its importance. That’s what it is there for.

There is one final point of interest from Professor Mayson’s report. He suggests that the regulatory objectives which are core to the 2007 Act should be split into primary and subordinate objectives in order to resolve conflicts between them. So where there is a conflict between the public interest and the consumer interest, for example, the former would take precedence.

During the passage of the bill through Parliament, the then government was very clear that the regulatory objectives were in no order of priority. It will be interesting to see if this suggestion gains any traction.


    Readers Comments

  • Tom Hiskey says:

    I’ve left a comment (in hindsight – perhaps an overly-lengthy comment!) on today’s related post…

  • Thanks Neil for this speedy insight into the new LSI paper. I completely agree that the reserved issue is not only the cornerstone of how the legal industry is likely to develop over the course of the next decade, but also goes a long way to explaining what’s happened in the last ten years.

    Its the obvious forum in which to address the issues already thrown up by “regulatory gap”.

    For me, there is still a lack of clarity from a practical perspective. There are plenty of legal processes which begin with non-reserved work, and then at some point spill over into becoming reserved. How these are handled in the new world ABSs and under the remits of the different regulators (separate business rule or otherwise) remains to be seen.

    Oh, btw, is there an application form to join the Reservation Nerds Club? Is there a badge??

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