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Special Committee to Improve the Delivery of Legal Services learns about English legal regulation

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Rule booksA legal firm in England sees a creative way to meet end of life needs.

It not only offers wills and probate services, but also funerals and cremations for its customers.

“It sees itself as in the industry of death,” said Crispin Passmore.

Passmore was involved with the 2007 law that rewrote legal regulations in England and Wales and was later executive director of the agency that regulates solicitors.

He spoke to the October 7 meeting of the Bar’s Special Committee to Improve the Delivery of Legal Services.

The committee is charged with studying “whether and how the rules governing the practice of law in Florida may be revised to improve the delivery of legal services to Florida’s consumers and to assure Florida lawyers play a proper and prominent role in the provision of these services.” The committee has already heard from people involved in changes that have been made in Utah and California in its quest to get a wide range of information. Members have made no decisions or recommendations.

Passmore said there’s no evidence the 2007 innovations, including allowing nonlawyers to own law firms and for nonlawyer companies to provide expanded legal services in England and Wales, has caused public harm or difficulties.

A variety of alternative business structures (ABS) have developed where law firms have brought in nonlawyer partners, nonlawyers have bought or set up law firms, American law firms have purchased English law firms, and some firms are listed on the stock market. Sometimes, Passmore said, an ABS can be sole practitioner who brings a spouse in as a partner for tax reasons. Or even offers funeral services.

“There are all sorts of examples of firms with very, very different structures with very, very different financial models that are operating in the legal markets,” Passmore said. “There’s no evidence it causes any problems, there is no evidence of more consumer complaints, there is no evidence there is more problems with ethical practices.

“All the research tells us it’s actually probably the opposite, but it’s tentative to say that. Nonlawyer ownership seems to match…with better customer service, better complaints handling, and increased innovation.”

There are differences between the U.S. and England.

Passmore said England and Wales did not have unlicensed practice of law regulations and nonlawyers have traditionally provided what would be considered legal services in this country. Areas carved out for solicitors and barristers were the result of old political deals rather than experience based, he said.

“The vast majority of legal services have always been delivered in part by people who are not lawyers and businesses that are not owned by lawyers,” Passmore said.

The 2007 law still retains legal titles such as solicitor, legal executive, and barrister, and tight regulations on who can use those titles. Areas where one must have those credentials to practice are controlled by criminal statutes, although the courts tend to interpret those restrictions narrowly, Passmore said.

Since the reforms have passed, about half of new legal businesses involve alternative business structures, he said, and about 10% overall are now ABSs.

The alternative approaches, Passmore said, bring innovations. In response to a question, he said the lack of innovation is not from law firms being short of money but rather their practice of distributing profits every year. ABS firms may invest more to grow the capital structure of the firm.

The beneficiaries, he said, are small businesses and individuals who otherwise wouldn’t be able to afford legal services but make too much to qualify for legal aid.

Passmore also said the reforms simplified ethical rules. He said when he was with the Solicitors Regulation Authority, ethical rules were around 800 pages. Now he said there are two sets: a code of conduct for solicitors and a code of conduct for regulated firms. Each is six to seven pages.

The rules, Passmore said, tell lawyers and those in legal businesses what their ethical obligations are, but not how to meet those obligations, particularly if they are economic matters.

“Ethics is about behavior and values and economics is how you organize a practice,” he said. “Once you realize it’s an economic and not an ethics [rule], it’s hard to justify.”

The ethical rules are the same for lawyers in small or large practices, whether the firm has nonlawyer partners, or is entirely owned by nonlawyers or a private company, he said.

Immediate past Bar President John Stewart, who chairs the special committee, said he hopes to have speakers from Arizona and Utah at future committee meetings as subcommittees continue their work.

Subcommittees are looking at fee sharing rules, advertising rules, lawyer referral services rules, how ethical rules work and can be altered to allow for creative delivery of services, and engaging Bar members and the public in the committee’s activities.

Stewart said he hopes to have reports and recommendations from subcommittees in January and February. The committee’s final report to the Supreme Court and the Bar Board of Governors is due next summer.

The committee’s next meeting is November 9.

A report on the effects of the English legal reforms can be found at: https://www.sra.org.uk/sra/how-we-work/reports/innovation-report.

The special committee’s webpage has reports from other states, the ABA, and private companies on legal reform efforts at: https://www.floridabar.org/about/cmtes/cmtes-me/special-committee-to-improve-the-delivery-of-legal-services/.

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