the lsa: past, present, future - legal services board€¦ · the lsa: past, present, future ucl...

The LSA: past, present, futureUCL LLM students

12 March 2019

Robert Cross

Research Manager

Overview

2Legal Services Board

• Why was change necessary?

• What regulatory changes have been made?

• What's changed so far?

• What's the future?

Overview






How the LSA came about

4Legal Services BoardLegal Services Act 2007 (LSA)

Putting consumers first 2006

ClementiReview 2004

Competition in

professions 2001

No need to change? The sector has grown


Unregulated legal businesses(20% £Tnvr UK)

Sources: ONS, LSC, LAA, MoJ, SLAB, NILSC, NILSA – UK WIDE

Use of lawyers limited for individuals


Source: Legal Services Benchmarking Survey 2012

Why people don't choose lawyers


Source: Consumer use of Legal Services, Optimisa, 2013

Why are there unserved consumers?


• “our findings indicate that use of lawyers may be more

fundamentally driven by whether or not people characterise

problems as being “legal”...... To the extent characterisation

is linked to people's understanding of the law, it raises questions

around public legal education. To the extent it is linked to problem

severity, or the stage that problems have reached, it raises

questions around the accuracy of people’s cost-benefit

assessments and the appropriateness of characterisations. To

the extent it is linked to the supply of traditional legal services, it

raises questions around the functioning of the legal

services market”

Source: Horses for courses? Pascoe Pleasence, Nigel J Balmer, Stian Reimers, LSB 2010 – LSB emphasis

Overview






10

Regulatory structure 2010 onwards

Legal Ombudsman

Legal Services Board

LSCP

Legal duty to promote the regulatory objectives


1. Protecting and promoting the public interest

2. Supporting the constitutional principle of the rule of law

3. Improving access to justice

4. Protecting and promoting the interests of consumers

5. Promoting competition in the provision of services

6. Encouraging an independent, strong, diverse and effective

legal profession

7. Increasing public understanding of the citizen’s legal rights and

duties

8. Promoting and maintaining adherence to the professional

principles

Source: LSA 2007

Codified ‘Reserved’ activities.....and enabled regulatory change

12Legal Services Board Source: Part 3 LSA 2007, LSB website rule change applications

Statutory titles


Protected Unprotected

Solicitor Notary

Barrister Costs Lawyer

Registered Trade Mark Attorney

LawyerLaw Practitioner

Patent Attorney Paralegal

Legal Adviser

Attorney

Advocate

Non Lawyer ownership: What is an ABS?

Legal Services Board 15

a. Equity can be raised from a broader

base of potential partners, members or

directors;

b. Non-solicitor employees may be

rewarded by partner, member or

director status, with a direct stake in

the organisation;

c. The ability to diversify the range of

legal services provided by the practice;

d. Equity can be raised from outside the

legal sector without the need for non-

lawyer involvement at the

management level

Source: Law Society

The ABS suitability test


You must:

1. uphold the rule of law and the proper administration of justice;

2. act with integrity;

3. not allow your independence to be compromised;

4. act in the best interests of each client;

5. provide a proper standard of service to your clients;

6. behave in a way that maintains the trust the public places in you and

in the provision of legal services;

7. comply with your legal and regulatory obligations and deal with your

regulators and ombudsmen in an open, timely and co-operative

manner;

8. run your business or carry out your role in the business effectively and

in accordance with proper governance and sound financial and risk

management principles;

9. run your business or carry out your role in the business in a way that

encourages equality of opportunity and respect for diversity; and

10. protect client money and assets.

Source: SRA Handbook

Overview







ABS - aims

Source: Evaluation: ABS and investment in legal services

Growth of ABS


• 2017:

• 19% are new

firms

• 37% did not

offer legal

services

before

getting their

ABS licence

• 23% provide

other

services

• 68% have

less than 50

employees

• 17% are

wholly

owned by

non-lawyers

Source: Evaluation: ABS and investment in legal services, 2016 LSB ABS survey n = 204

ABS and investment


Source: Evaluation: ABS and investment in legal services 2017

Investment in the UK legal sector over time

20Legal Services Board Source: ONS data

Levels of innovation over time


Source: Technology and Innovation in Legal Services 2018, LSB

ABS and innovation


Source: Technology and Innovation in Legal Services 2018, LSB

Number of lawyers grown by 22%

23Legal Services Board Sources: Approved Regulators

Number of entities largely static

24Legal Services Board Sources: TLS, SRA

Upheld allegations of misconduct falling

25Legal Services Board Sources: SRA performance reports

Public perceptions

26Legal Services Board Sources: Legal Services Consumer Panel, Annual Tracker Survey, You Gov.

http://www.legalservicesconsumerpanel.org.uk/publications/research_and_reports/index.html

Responses to problems – Small Businesses

27Legal Services Board Sources: Legal needs of small businesses 2013-2017 BMG Research

Trends in representation at court

28Legal Services Board Sources: MoJ Family Court statistics

Consumers experiences

29Legal Services Board Sources: Legal Services Consumer Panel, Annual Tracker Survey, You Gov.

http://www.legalservicesconsumerpanel.org.uk/publications/research_and_reports/index.html

The cost of going to law has risen


Sources: ONS. LSB

• 2015 -

One hour

of

litigation

costs 47%

of an

individuals

average

weekly

earnings

Price differences for the same service

31Legal Services Board Sources: Prices of Individual Consumer Legal Services 2017, LSB, BMG Research

Price differences: reasons?

Factors captured but not significant

• ABS (13/15)

• Age (12/15)

• Sites (12/15)

• Remote services (15/15)

• Displaying prices (10/15)

• Menu of prices (11/15)

• Service delivery methods (11/15)

• Information provided at point of

sign up (8/15)

• Flexible payment options (14/15)

• Freq. of cases costing more (9/15)

Possible factors not captured

• Firm pricing strategy

• ‘Quality’ of service premium:

– Experience of fee earners

– Membership of Accred.

• Firm staffing structure/use of IT

• Fee earner utilisation rates


Price transparency in 2017


Overview






LSB Vision for LSA reform – September 2016


The structure of the regulator

Single regulator covering the whole market

Consumer representation

Independent sector-specific consumer voice, a general duty to consult and engage with consumers

Independence of regulation

Independent both of the professions and government and accountable to Parliament.

Focus of regulationOn activity, with regulation of providers only for

specific high risk activities.Regulation not based on professional title.

Scope of RegulationActivities for which an independent review determines regulation is necessary on grounds of risk to the

regulatory objectives

Regulatory ObjectivesSafeguarding the public interest by protecting consumers and ensuring the delivery of outcomes in the interests

of society as a whole

Transparency and the CMA market study

2016

37Legal Services BoardSources: CMA Legal Services Market Study 2016

CMA 2019: What have regulators done so

far?

38Legal Services BoardSources: Approved regulators

Regulator Market segments affected Transparency requirements Date

BSB

Crime Employment, Family Immigration, Other Welfare (Debt), Wills, Trusts, and Probate

State that clients can contact them for a quotation, their most commonly used pricing models for legal services, such as fixed fee or hourly rate and the areas of law in which they most commonly provide legal services. Additionally they must provide information about the factors which might influence the timescales of their most commonly provided legal services.

After May 2019

Cilex Regulation

Conveyancing, Wills, Trusts, and Probate

-Cost information -Service information e.g. timescales. - Regulatory information – including the Cilex logo -Complaints process.

14th January 2019

CLC

Conveyancing, Wills, Trusts, and Probate

-Cost information -Service information e.g. timescales. - Regulatory information – including the CLC secure badge. -Complaints process. -Referral details – e.g. fees paid.

6th December 2018

SRA

Crime Employment, Family Immigration, Other Welfare (Debt), Wills, Trusts, and Probate

Cost information -Service information e.g. timescales. - Regulatory information – including the SRA digital badge. -Complaints process.

6th December 2018

Others

To be determined After April 2019

Technology hype – Gartners cycle

39Legal Services BoardSource: Scott Brinker, https://thinkgrowth.org/one-thing-everybody-forgets-about-gartners-hype-cycle-ecfe7e9de8ff

https://thinkgrowth.org/one-thing-everybody-forgets-about-gartners-hype-cycle-ecfe7e9de8ff

Technology hype – Gartners cycle

40Legal Services BoardSource: Scott Brinker, https://thinkgrowth.org/one-thing-everybody-forgets-about-gartners-hype-cycle-ecfe7e9de8ff

https://thinkgrowth.org/one-thing-everybody-forgets-about-gartners-hype-cycle-ecfe7e9de8ff

What is the current level of use of technology?

41Legal Services BoardSource: Technology and Innovation in Legal Services 2018., LSB

Drivers and barriers

42Legal Services Board Source: Technology and Innovation in Legal Services 2018. LSB

Users and benefits

43Legal Services Board Source: Technology and Innovation in Legal Services 2018. LSB

Benefits

Workforce impacts?


• IT replacing Qualified solicitors:

• All firms: 2% in 2013/14 and 3% in 2016/17

• Large firms: 3% in 2013/14 and 15% in 2016/17

• IT replacing Paralegals:

• All firms: 3% in 2013/14 and 5% in 2016/17

• Large firms: 8% in 2013/14 and 26% in 2016/17

Sources: The Law Society - 2017 Capturing Technological Innovation in Legal Services, 2018 Forecasts

The LSB’s strategy and new five-year policy

objectives

Promoting the public

interest through ensuring

independent, effective

and proportionate

regulation

Making it easier for all

consumers to access the

services they need and

get redress

Increasing innovation,

growth and the diversity

of services and

providers

The LSB’s strategic objectives 2018-21

The regulators have

appropriate frameworks

for continuing assurance

of professional

competence throughout

the careers of the people

they regulate

The LSB is perceived as

being at the forefront of

enhancing public legal

education

Access to legal services is

increased through the

promotion of responsible

technological innovation

that carries public trust

5 year policy objectives:

Key markers of our success

Source: LSB Business Plan consultation 2019/20

Summary of work packages for 2019/20

Promoting the public

interest through ensuring

independent, effective

and proportionate

regulation

Making it easier for all

consumers to access the

services they need and

get redress

Increasing innovation,

growth and the diversity

of services and

providers

• Ongoing competence

• Responding to EU exit

• Market evaluation

exercise

• Consumer transparency

• Individual legal needs

survey

• Regulatory performance

• Internal Governance

Rules

• Review of PCF processes

including non-regulatory

permitted purposes

• Public legal education • Technology

Other key workstreams

Discharging our statutory duties

5-year policy objectives – laying the foundations

Source: LSB Business Plan consultation 2019/20

Facts and figures are all online:

Questions?


[email protected]

https://research.legalservicesboard.org.uk/

Legal Services Board

One Kemble Street

London

WC2B 4AN

020 7271 0050

Follow us @ LSB_EngandWal

https://research.legalservicesboard.org.uk/

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