A detailed critique of the IHS overall approach to quantifying regulation. This challenges the IHS methodology in terms of the statistical approach used, and the assumptions made around turnover and productivity because of a lack of objective data.
Thsi report quantifies legal regulation through indexes:
- Market Entry Regulation Index – covers regulations with regard to licensing and reservation (number of exclusive tasks) of certain activities, requirements in education (such as length of education, number of professional exams etc) , and quotas on entry.
- Market Conduct Regulation Index – covers regulations on prices, advertising, locations, business forms, and cooperation.
- Mandatory Intervention Index
To actually build these indices they score elements and weight the results. The regulation indices are constructed by considering the regulations that hold with regard to a number of categories to do with entry into the profession and conduct within the profession. Each index has a range of “0” (no regulation) to “6” (highest degree of regulation). They produce an overall regulatory index by constructing a weighted sum of the scores, with the weights reflecting a judgement regarding the relative importance of each category of regulation.
Summary of european wide investigation into access and regulation.
“Views regarding the overall balance of costs and benefits of trainees differed. The predominant view across firms of all sizes was that they were a net cost during the training period and that they were not profitable until after qualification.” (page 2).
In relation to conveyancing: “In particular, solicitors now undertake additional compliance work in relation to HIP
Argues that courts aren’t very efficient – wants procedures simplified to improve this (not just hiring more judges) – page 12.
Insurance premiums determined by – claims record, areas of law practiced, size of the firm, number and location of offices, supervision levels, fee income, excess, commitment to best practice and risk management, SRA reports, and professional disciplinary record – pages 1&2
Costs of entry to barristers profession summarised (page 16). BVC cost
It costs tens of millions to administer the legal aid budget with 5,000 providers (page 53).
Court costs per head of population quite low in Auk, compared with other EU countries (page 23).
Legal aid “bureaucracy” (page 1) – explained on page 2.
Court fees went up from
Legal aid admin costs represented 6% of budget in 2007/2008 (page 25).
covers that will writing is not a reserved activity, but solicitors aren’t allowed to run it as such as a separate activity – they must comply with regulations that their competitors (page 19).
Discussion on the costs to qualification – especially its impact on would-be BME lawyers (page 65 – 66).
Estimates for regulatory costs (page 26 – 27). More costs – complaints (page 48). More on costs of LSB / OLC (page 66 – 67).
Estimations of costs of regulatory regime as percentage increase in prices (page 27/53).
Highly trained advisors can raise the cost of (advice) provision and reduce access (page 1). Economists justify training and regulation as ways of reducing problem of information asymmetry (page 4). Debate over whether costs are proportionate to benefit obtained (page 7). Points out that the for-profit sector is subject to higher training obligations that the NFP sector (page 7). Discussion about the admin costs of compliance with quality standards (page 25 – 26).
If advice centres employ solicitors, then they have to take on compliance with lawyers code – suggests ring fencing solicitor as a separate entity to reduce regulatory costs (page 9).
Regulatory changes (Woolf) require active case management systems (page xix).Not all costs are regulatory – some audit costs are imposed by third parties such as expense insurers (page 56). Entire report deals with litigation process – so costs of complying with Woolf is pervasive throughout the document.
The role of regulation is to support the profession in the provision of this service
Report argues that many lawyers do not do reserved work, so therefore do not need to be trained to the level to perform such work (page 5) before being classed as a lawyer.
Typical costs to firm who accept referral fees (page 28).
Report suggests that the cost of quality mark accreditation may make it not worth bothering with for some firms (page 22).
Wants contingency fees introduces to remove the need for summary and ex post facto costs assessments etc (page 7).
Report summarises the costs of running the LSB and complaint system
Short (16 page) conceptual report about self regulation – on the one hand, self-regulation means that monitoring and enforcement costs are reduced (because regulator is specialist). On to the other hand, regulators can prevent liberalisation of working practices.
Sole practitioners tend to cause problems, all private practice lawyers must resolve them via compensation fund (page 2).
Ministry of Justice cost
Some people felt the accreditation costs to be on the children panel was too high (page12). Re-accreditation after 5 years (page 71).
New standard of governance, audit, risk management etc expected under LSA regime (page ii). Details of regulations that annoy corporate law firms (page 30 onwards) – client care, conflicts, lack of understanding of firms IT systems etc.
Study covers the extent to which UK legal profession is regulated compared with other EU states – we’re quite low on the index of regulation (page 34 – 35).
NFP organisations may be subject to multiple regulatory oversights – FSA, OISC etc (page 2).
Survey respondents wary of the cost of obtaining QAA scheme for advocates. (page 27).
Referral marketing costs for PI claims estimated to be 23-40% of base legal costs (page 4), compared with 18% for conveyancing.
Survey results: “Firms were mainly positive (over two-thirds agreeing) about the benefit to the profession of an effective SRA and the proportionality of visits in protecting the profession reputation, but were rather more equivocal about whether or not the SRA operates fairly in its contacts with firms (50% agreement). Over three-quarters of firms 78%) thought that the regulatory system places too great a burden on law firms.” (page 4). Then, on page 5- The costs of compliance were excessive for 37% of firms and reasonable for 26%.
regulation should be focused on the underlying incentives and not the business structure. It makes more sense for the restrictions on the composition of management to be determined by the size of the LDP and the concentration of ownership rather than the business structure itself. Small firms could quite sensibly face different restrictions on management composition to large firms, with the former being grouped with partnerships. A decision to be more relaxed about management composition of large firms is also consistent with the analysis of misconduct according to firm size. The paper shows that misconduct and poor quality is heavily focused on small businesses.
The higher the debt/equity ratio in a firm then the more attractive risky strategies are to the company, hence large LDPs or MDPs are far more likely to be at risk of slipping from the
The LSA will give rise to competition between regulators with practitioners assessing the relative merits burdens and cost of each regulator and decide which regulatory home is most suitable for thier practice. Page 2