It is “demeaning” to suggest that non-lawyers becoming involved in alternative business structures (ABSs) are less likely to be ethical, the chairman of the Legal Services Board (LSB) claimed last night.
David Edmonds also pointed to a string of scandals involving lawyers, including that of miners compensation, saying that “I wager the title solicitor isn’t a good predictor” of whether someone will act honestly or ethically.
Speaking on ‘quality and standards in a liberalised market’ at an event hosted by London law firm Russell-Cooke, Mr Edmonds said he wanted “to refute the notion that we cannot trust other professions to behave in an ethical manner, or that businesses ignore the rule of law…
“There have always been rogues in any profession but I remain firmly of the view that it is demeaning in this debate to imply that non-lawyers are inclined to be less ethical than any other group running a business.”
He argued that there is a “normal distribution curve of ethics among the population”, and while he hoped the legal profession would come from the end of the curve which is more ethical, “that is not the same as saying that the end of the curve is only populated by lawyers”.
Mr Edmonds highlighted the string of lawyer scandals to ensure that people did not look “backwards to traditional regulation through some sort of rose-tinted spectacles, dreaming of the time when professional ethics were consistently high and only jolly good chaps were able to practise law”.
The way to address concerns is to regulate not just individuals but the systems and behaviours of the entities in which they operate, he explained, with greater emphasis on business governance, capability and management competency. “New governance requirements within ABSs will ensure accountability for ethical behaviour and professional standards,” he said.
He linked the issue of ethics with the adoption of outcomes-focused regulation, which he described as “the only form of regulation that is compatible with professional ethics”, because being a professional cannot be reduced to detailed prescriptive rules.
Mr Edmonds had a dig at those among the frontline regulators who accuse the LSB of micro-managing: “People and glasshouses spring to mind,” he said, noting the “tendency” of legal regulators over the years to issue very detailed codes, supported by just as detailed guidance. He pointed to the latest edition of the SRA Handbook, which runs to 516 pages, and the new Bar Handbook, which is likely to reach 300 pages.
Mr Edmonds also used his speech to emphasise his belief that there is no “inherent conflict between consumerism and the rule of law”. He added: “Putting the consumer first is a principle of good regulation. But we also realise that all consumers are citizens and all citizens are consumers…
“I want to see the legal profession adopt the same commitment to consumer care as it does to client care – to embrace modern business ethics alongside those of the profession. They are not mutually exclusive and each reinforces the other.”