Healy O'Connor

Plans to Bring Reform to the Legal Profession

LEGISLATION that will comprehensively reform the legal professions will be published in September, Minister for Justice Alan Shatter said last night.

Speaking at the publication of a report on the solicitors’ profession by Anne Neary and Frances O’Toole, he said the planned Legal Services Bill would move the professions from the 19th to the 21st century.

Referring to a speech of Attorney General Máire Whelan at the Bar Council conference last weekend, Mr Shatter stressed there would be no threat of any nature to the independence of the professions and their capacity to represent impoverished clients.

The reforms would ensure access that was cost-effective and efficient, in a manner that did not inhibit economic growth.

Ms Whelan said legal reform must ensure that barristers could continue to take on unpopular and unprofitable cases in the public interest and the interests of social reform.

Mr Shatter said he was examining how the State and State agencies tendered for legal services, and said he questioned the practice of tendering only for firms with a turnover of €10 million and professional indemnity insurance of €20 million, as had been specified in a recent tender from the Private Residential Tenancies Board.

An initial tender from the Personal Injuries Assessment Board for legal services specified firms with a turnover of €50 million, Mr Shatter said.

He was asking all Ministers to examine tendering policy, which should be based on experience and expertise, reputation and adequate professional indemnity insurance.

Solicitors’ firms should be allowed form limited liability companies and the focus of regulation should be on law firms rather than individual solicitors, according to the report from legal management consultants Ms Neary and Ms O’Toole, entitled The Blueprint Report.

It is based on an examination of 450 firms registered with them for the purpose of auditing their practice and risk management.

They have given practice management advice to a number of additional firms, which also informed the report, Ms Neary said.

The consultants devised a standard for legal firms that is accepted by the providers of professional indemnity insurance and has been endorsed by the National Standards Authority, Ms Neary told The Irish Times.

She said future regulation should be based on such a standard, so that it was clear what was being regulated.

The profession is in crisis, which is reflected in enormous losses for insurers, according to the report.

The reasons for this are complex, including the extension of solicitors’ undertakings (securing title to the property) from residential to commercial property transactions; pressure from clients to close transactions quickly; the departure of lenders from traditional lending criteria, so that the security of the property, rather than the ability of the borrower to pay, became paramount; and the lack of business management skills in many law firms.

The authors say that the existing system of regulation is inadequate because it focuses on individual solicitors rather than firms.

This means that practice and risk management have traditionally not been part of the regulatory process and were often neglected.

“The legal profession needs to be permitted to provide legal services through a framework which facilitates a high degree of choice for consumers and promotes competition and innovation,” the report states.

“Solicitors should be given choices of business structures, whether that is the current model, some form of limited liability partnership or through limited liability companies.”

(Irish Times, Thursday 9th June 2011)

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