A “tranche” of top commercial lawyers has “effectively become privately regulated by the clients they seek to serve”, a leading academic has said.
Dr Steven Vaughan, senior lecturer at Birmingham Law School, said some lawyers did not realise they had become “captured” by their clients and thought it was “perfectly acceptable, even desirable”.
Dr Vaughan, himself a former City lawyer, said threats to independence came “not just from clients, but also from the lawyers themselves”, in terms of what they were and were not willing to do.
In a talk hosted by University College London’s Centre for Ethics and Law on the question of whether institutional clients threatened lawyer independence, Dr Vaughan said: “We have a tranche of the legal services sector at the top end which over time and to a degree has effectively become privately regulated by the clients they seek to serve.
“The question then becomes whether this client closeness has devolved into a level of client capture that should make us all concerned, because it threatens the principle of independence.
“Such devolution, such client capture, won’t happen en masse at the same time across the entire legal services sector.
“But I am confident that my research shows that there are pockets of client capture here and there – complex and often hidden, subtle but often powerful – by a number of lawyers and a number of firms.
“I am also confident that some lawyers don’t realise they’ve been captured and some lawyers are happy to be captured. They think it’s perfectly acceptable, even desirable.”
Dr Vaughan said that along with the threats from lawyers and their behaviour, there were threats from regulators, “in how they shape and enforce the principle of independence”.
Dr Vaughan went on: “With the SRA we have a regulator that is rightly looking at the complexity and breadth of its Handbook, while trying to maintain professional standards.
“We have a government that is likely to impose on all regulators the duty to promote competition and growth.”
Dr Vaughan was joint author, with consultant Claire Coe Smith, of a report last October  on the balance of power between commercial lawyers and clients for the Solicitors Regulation Authority.
The debate that followed Dr Vaughan’s talk was held under Chatham House Rules, so lawyers could give their opinions without being identified.
Disagreeing with Dr Vaughan, one leading City lawyer made it clear that he believed that the main threat to independence came not from clients, but from the government.
He gave as one example the interim Briggs report , published this week, which backed the setting up of an online court for money claims worth up to £25,000.
As other examples, he gave the government’s restrictions on judicial review, legal aid cuts, support for alternative business structures and justice secretary Michael Gove’s threatened levy on City law firms.
Meanwhile, a senior in-house lawyer from one of the country’s biggest banks defended the commitment of in-house lawyers to independence, while another in-house lawyer from a major international corporation spoke of “legal shopping”, where the company would approach different law firms to secure the legal opinion it wanted.
Responding to criticisms of the “government law machine” and the pressure it put on its lawyers, a senior government lawyer strongly defended their ability to be independent.
As a well-known professor pointed out at the end, it seemed that each sector – private practice, in-house and government – blamed the other for undermining the independence of lawyers.