Being lawyers (or academic, in my case), it is hard to avoid an analogy with directives from the European Common Market affecting our domestic laws (with the regulations constituting a higher tier) and how different legal sectors could be regulated. It has been articulated elsewhere how reliable the “market approach” to legal services has been, so I don’t wish to go over this ground again. I do however wish to mention that it may not be helpful to leave the market entirely to its own devices, as you may certain ‘unprofitable’ areas of law, naming no names, shoehorning other areas of law out of the market, perhaps primarily involved in social welfare. This would be a great tragedy in itself, but also if it were allowed to compromise the education of future lawyers. Commodification also has been specifically dealt with, elsewhere, and I don’t wish to go over the arguments here either.

So should there be a ‘Superregulator’ for all parts of the law, including barristers, traditional solicitors firms, ABSs etc.? The intuitive answer is possibly no, as each division of the legal services ‘market’ will have its specific needs which need to be addressed. Like Directives, if there were seen to be a need for a ‘Superregulator’, maybe it could hand down directives  for the Bar Standards Board, Solicitors Regulation Authority, or otherwise, to follow?

However, I was struck by a post by Prof. Stephen Mayson (from the College of Law) last night. It implied that there might be perceived inequality in ethical standards between different areas of the legal market. If there were to be perceived inequality, I feel that this could impact on competition within legal services, in that this might constitute ‘a barrier to entry’ (to use the Porter terminology) for alternative business structures. However, I am very much reminded of a completely different area in which self-regulation has been discussed until the cows come home – that of cloud computing. Here it’s argued that cloud providers should be talking the same common language, such that a customer/client can switch between cloud providers with ease (a notion called ‘interoperability’); it’s particularly important so that the public can confidently trust any particular cloud provider, whatever they are charging for their services which may be fundamentally different in quality and cost.

Let’s try that sentence switching the word ‘cloud’ by the words ‘legal service’. Here it’s argued that legal service providers should be talking the same common language, such that a customer/client can switch between legal service providers with ease (a notion called ‘interoperability’); it’s particularly important so that the public can confidently trust any particular legal service provider, whatever they are charging for their services which may be fundamentally different in quality and cost. It (for the time-being) works, emphasising that Stephen Mayson is right to warn against anything which could unwittingly cause a ‘barrier-to-entry’.

There are two aspects of the marketisation of legal services which dangerously have gone unaddressed, which I suggest ought to be of be importance to my senior academic colleagues. Firstly, you are not comparing like with like in this new market; even if you are able to compare legal services on measures of price and cost, you will run into difficulties in comparing the social value of a transaction, whether it be an acquisition of Instagram or a sensitive immigration case of a Ugandan citizen in West London. It’s the same reason ‘Monitor’ ran into problems as the regulator for the brave new world NHS. Secondly, you should be very conscious of where genuine partitioning or arbitrage of the legal services markets exists. Again, cloud providers may be able to charge differently according to supply/demand, quantity of services sold (e.g. bulk discounting), or different segments in time or geography. This is well known to the economists already due to Pigou’s elegant theory of price differentiation in competitive markets; unless the legal services regulators consider this too, I guarantee they will run into trouble in the long-run.