Chapter 3: Four policy choices for legal services regulation
There is much which unites the legal services regulatory regimes of the wealthy common law jurisdictions, as Chapter 2 demonstrated. They espouse the same official account of why legal services must be regulated: to protect clients, to prevent negative externalities, and to safeguard positive externalities from legal service provision. These jurisdictions also draw on the same regulatory toolbox, which contains rules about entry, conduct assurance, conduct insurance, and business structure. However, this shared frame of reference does not relieve policy-makers from making four important choices in designing legal services regulatory regimes. This chapter will show that they must make choices about: 1. Occupational Structure: whether to institute occupational unity (e.g. a single occupation of lawyer), as opposed to occupational multiplicity (e.g. barristers, solicitors, conveyancers, etc.); 2. Governance: how much scope to allow for self-regulation (regulators led by and responsive to practitioners and independent from the state), as opposed to state regulation; 3. Insulation: whether to pursue regulatory insulation of legal service providers from business relationships with non-clients (e.g. through prohibition of non-lawyer investment in firms), as opposed to regulatory openness to such relationships; and 4. Unit of Regulatory Focus: whether individual legal service providers should be the exclusive focus of regulatory efforts, as opposed to also regulating the firms and enterprises in which they work. These four choices are not binary options. Each allows a spectrum of policy responses.
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