Susskind: ABSs will have international ripple effect and break down protectionism

Susskind: remarkable, entrepreneurial and exciting spirit

American opposition to alternative business structures (ABSs) is about protecting lawyers, not clients, Professor Richard Susskind has suggested.

And he predicted that within a decade or so, “most advanced jurisdictions, and many emerging jurisdictions as well, will have liberalised in the manner of England. And even if this does not come about, liberalisation in some countries will give rise to liberation in most others”.

Opposition to non-traditional practice is strong among some US lawyers, with the American Bar Association (ABA) last year ditching plans to explore non-lawyer ownership. Further, online legal services providers face court action from local bar associations over the unauthorised practice of law, and last year senior US general counsel argued that any form of non-lawyer ownership of law firms is bad for clients.

Writing for the ABA’s Law Practice magazine, Professor Susskind said: “I want to challenge whether this is about protecting clients or protecting lawyers. I distinguish between professions that behave as jealous guards and those that act like benevolent custodians.

“From this side of the Atlantic, I fear that many professional legal bodies and some lawyers in the U.S. are veering worryingly toward the first category. We should survive as lawyers because we have the knowledge and experience to bring value in legal affairs that others cannot, and not because we regulate so that competitors are not allowed in the arena.”

He urged US lawyers to recognise that not all the changes in the market in England and Wales have resulted directly from the Legal Services Act, “but this legislation – and here is the central point rather than the particulars of each initiative – is giving rise to a remarkable, entrepreneurial and exciting spirit…

“Crucially, even where there is not liberalization, we are witnessing what I regard as a liberation from the limitations of narrow thinking about the way in which legal services can and should be delivered. No one can know where this might lead. But we can be sure that major change is upon us.”

Professor Susskind said that while many US lawyers dismiss liberalisation as the idiosyncrasy of a small number of misguided jurisdictions, “I predict that when liberalisation leads directly to the development of new legal services that more fully meet the growing ‘more for less’ challenge of clients, this will have an international ripple effect.

“I think it inevitable that when general counsel of major global businesses benefit from or even hear about new forms of far less costly service in liberalised regimes, they will surely demand similar service in their own countries. Law firms in traditional markets, such as the US, may find themselves at a competitive disadvantage.”

    Readers Comments

  • Having spoken to many lawyers in the USA and Australia, I agree that it is inevitable that liberalisation will follow in those and other jurisdictions.

    These lawyers are deeply frustrated that they are being held back from innovating with the aid of investment and feel that protectionism is the main motivation in blocking this.

    The world is such a small place now and pressure will be brought to bear by consumers as well as lawyers when it becomes increasingly clear in other jurisdictions what is happening over here.

    This is not to say that we are exactly exploding with innovation yet, but that is going to change very soon.

  • BCReed says:

    Susskind has a compelling assertion here. One that seems to be true with observing the US profession with a critical eye.

    One should also note that this type of mentality is not exclusive to attorneys but nearly every industry has such behaviors, especially those that have become the respected incumbents and leaders in the industry. They lobby to have regulation enacted that would prevent new entrants into their space with significantly less overhead. We see it in banks for instance or insurance companies. The SEC is a clear example of protectionism, by claiming authority over every financial instrument the mind can devise and then putting restrictions on who can invest based on their wealth. Crowdfunding has been indefinitely stalled due to their protectionist attitudes. These professional bodies claim it is for the public good but in reality it is just seeking to prolong and prevent the entrance of new innovative businesses.

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