Lawyers, Markets and Regulation

Lawyers, Markets and Regulation

Frank H. Stephen

Frank H. Stephen’s evaluation of public policy on the legal profession in UK and European jurisdictions explores how regulation and self-regulation have been liberalized over the past 30 years. The book surveys where the most recent and radical liberalization involving the ownership of law firms by non-lawyers is likely to lead, and appraises the economic literature on the costs and benefits of regulating markets for professional services. It challenges socio-legal views on professional legislation and highlights the limitations of regulatory competition, as well as the importance of dominant business models. The author reviews the empirical work underpinning these theories and policies. He also evaluates the effectiveness of regulatory competition as a response to regulatory capture.

Chapter 9: Summary and conclusions

Frank H. Stephen

Subjects: economics and finance, industrial economics, institutional economics, law and economics, law - academic, law and economics, regulation and governance


Markets for legal services in most jurisdictions are subject to some form of regulation. In particular, the supply of these services is restricted by regulations that control both the entry of suppliers to the market and the way in which suppliers may conduct their activities. This book has been concerned with why this has been so, how behaviour has been regulated, what the effects of such restrictions might have been and what the impact of their relaxation has been. It also considered the potential impact on both the supply and the nature of legal services of the liberalization of the restrictions on the ownership of suppliers brought about by the Legal Services Act 2007 in England & Wales. This, it is argued, heralds a technological revolution in legal services.Part I was concerned with the ‘Why?’, ‘How?’ and the first of the ‘What?’ questions. Chapter 2 looked at the question of why we regulate lawyers. It examined the traditional arguments proffered by the representatives of the legal professions and exemplified by evidence given by lawyers’ representative bodies to the UK’s Monopolies and Mergers Commission. These linked the regulation of lawyers to higher level social objectives such as the rule of law. They were also linked to the lawyer’s duty to the court. This, it was argued, differentiates the lawyer’s role from that of a businessman. The chapter then moved to discuss the economic justification for regulating markets for legal services.

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