Lawyers, Markets and Regulation
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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.
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Chapter 2: Why regulate lawyers?

Frank H. Stephen


This chapter examines the case for regulating lawyers. Although from the economist’s perspective it is the case for regulating markets for legal services with which we should be concerned, traditionally the focus has been on the regulation of the professions who supply legal services. In particular the focus has been on the regulation of the individual lawyer. This focus has been shifting in recent years, particularly in the UK, to be on the regulation of the market and the entities that supply these services. Nevertheless this chapter begins by looking at the case for regulating lawyers. First, the arguments put forward traditionally by the profession itself are presented. Secondly, the economic case for regulation as a response to market failure is presented. Thirdly, the advantages and disadvantages of self-regulation are examined and the case for regulatory competition is briefly set out. What reasons have been given traditionally for lawyers being subject to regulation as they are in most jurisdictions? In particular, why are they not, simply, subject to the normal laws of supply and demand as are those who supply other services?

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