Beringer: Profession will get the regulation it deserves
The legal profession has “tried effectively to outsource its soul to its regulators” by substituting acting ethically with the absence of illegality, according to the former senior partner of Allen & Overy.
Guy Beringer said it was “much easier for any organisation to demand to be told what it cannot do rather than to have to work out for itself what might best serve the public interest”.
Speaking to the annual International Conference of Legal Regulators – held this year in London – the City law grandee and honorary KC said he appreciated “that telling a conference of regulators that regulation has led to an amoral business environment may not be welcome”.
He went on: “Each generation of the legal profession has believed that it faces challenges of unprecedented complexity and it has constructed new rules to deal with them. But I think in all of that, the profession has forgotten the fundamental point that it must serve the public interest.
“It must discern the public interest for itself. It cannot expect a regulator to translate the public interest into a set of rules.”
Mr Beringer spoke about lawyers being in a ‘public’ profession, where their duty to the public outweighed any conflicting duty to the client, and how they receive privileges and benefits in return.
“I’d suggest that the growth the regulation and rules has, over the past 50 years, led to what you might characterise as a lazy and self-interested substitution of the absence of illegality as a goal in place of the pursuit of the public interest.
“You might say the profession has tried effectively to outsource its soul to its regulators.
“That’s not just a feature of the legal profession. It’s happened right across the business world. It’s much easier for any organisation to demand to be told what it cannot do rather than to have to work out for itself what might best serve the public interest.”
As a result, the absence of illegality “has displaced ethical decision-taking and to a degree behavior has therefore become a process rather than a question of morality”.
The practical implications he outlined echoed some of the work of the Institute of Business Ethics’ taskforce on business ethics and the legal profession, which he chaired and reported last year [1].
“If you take the issue of client selection in civil matters, the commercial end of the profession needs to work out how it exercises its complete freedom to select its own clients, because that’s what it has. And it needs to ensure that the public understands how it exercises that complete freedom [in an ethical manner].
“If you take the issue of access to justice, the profession needs to work out how we have managed to arrive at a position where half the population cannot afford legal advice. Now, the profession doesn’t have to fix the problem, but I think it might be wise to have a rather more sophisticated answer than simply demanding increased government spending.
“If you take the issue of money laundering, the profession needs to work out how it counters charges of enabling because it’s judgment which is required and not mere absence of illegality.”
“And if you take the issue simply of maintaining the public confidence in the legal profession and in the justice system, you might ask when was the last time this appeared on the agenda of any commercial law firm? And you probably won’t get an answer.
Mr Beringer urged lawyers to recognise that regulators could not do their thinking for them.
“In the end, the profession will get the regulation it deserves if it does not do its own thinking, but it cannot really complain if external forces do it instead.
“And this thinking should begin with the question of what is a public profession? An understanding of the nature and duties of a public profession will give the context for ethical behavior and ethical training, but I don’t think ethics can be taught in a vacuum. So regulators should urge firms to do this sort of thinking openly and collectively.”
If lawyers were to maintain the barriers to entry – such as the reserved legal activities – that they benefit from in return for acting in the public interest, “this requires that the public believes that the public interest is being served and it also requires that confidence in the profession is maintained”.
This meant the public interest and commercial self-interest “are very closely intertwined”, Mr Beringer said.
“If the public loses confidence in the profession, well, it may well choose to remove the privileges that the profession enjoys.”
The large commercial law firms needed to appreciate that this was a risk to them, Mr Beringer concluded.
“The greatest service I think a regulator can provide is to draw this fact to the attention of the profession. You might even suggest that law firms spend less time looking in the rule book and more time looking in the mirror.”