Cord Brügmann*
A. Introduction
“I don’t like mandatory bars. They are self-serving, tend to turn into guilds, and do not care about access to justice.” This introduction I heard not long ago from a senior EU diplomat. My answer – he was a Frenchman –: “This statement is probably as correct as ‘I don’t like cheese.’ Wouldn’t you agree that there are so many different types of cheese that nobody can say there isn’t a kind of cheese they might like.”
This paper shall give an overview of how the lawyer 1 profession (B.) and its regulation (C.) evolved, which types of regulation exist, which challenges they face (C.), and which conclusions regulators should draw (D.). One main finding: The actors in the field of regulation should collaborate more internationally, look beyond their peer-groups, make stronger efforts to find a common terminology for specifics of regulation and strive for more empirical research on legal services and regulation to have a basis for evidence-based regulation (E.). This text is not a legal analysis of regulation but follows a descriptive approach.2 Jurisdictions differ especially when it comes to the legal relationships between government and private actors, so a purely legal perspective would stress divergences rather than show commonalities.
Lawyers provide legal services. Legal services are highly relevant for any society, no matter if one looks at them from an economic perspective or from the perspective of how a society deals with conflicts and the prevention of conflicts: The legal services sector accounted for more than 850 billion USD annual turnover worldwide in 2017,3 more than 20 % of which generated in Western Europe.4 Legal services are provided in the public interest,5 like medical care or the services provided by engineers and architects. According to European law they deserve special protection6 because of their relevance for the administration of justice. Thus, the quality of legal services in a jurisdiction is an indicator for the state of the rule of law in a country.
B. Evolution of the Lawyer Profession7
I. The beginnings
In early societies there were no specialized individuals who advised and represented clients, since the law was not regarded as a special subject matter. Also, it was considered as everyone’s duty to speak on his own behalf. In ancient Athens, a society with more formalized law and procedures, parties in court proceedings were able to obtain assistance. It was possible to have someone else prepare in writing a statement for court which then had to be memorized by the litigant.8 In the Roman Empire, similar functions existed. Like in Athens, legal advisors were initially not to receive a fee. Their compensation was an honorarium which was not enforceable. The more formal the law became, the more it became important for parties to a contract or to a dispute to have assistance by an adviser and someone who would represent them if necessary. While in the beginning, the advisory and representative roles were split into two occupations, in modern age the two occupations unified in many jurisdictions.9
II. Professionalization
At the beginning of the modern age, professionalization of lawyers accelerated in Europe. Professionalization here is understood as the development of standardized education and rules for admission, some form of association of members of the evolving profession, adoption of standards for professional conduct by the profession, and the taking shape of a disciplinary system to enforce these standards.10
* The author is lawyer admitted to the Berlin Bar, and a historian. As advisor and consultant, he works with authorities, private clients and international organizations.
1 The term “lawyer“ is used in the sense mentioned in Directive 98/5/EC of the European Parliament and of the Council of 16 February 1998. “Lawyer“ describes individuals licensed to practice law independently.
2 The text is in large parts based on research for a report I submitted 2018 on behalf of the International Bar Association (IBA) as an expert consultant to a working group created by the Ethiopian Federal Attorney General’s Advisory Council for Law & Justice Reform. The author wishes to thank Péter Köves, Chair of the IBA Bar Issues Commission, for sharing their perspectives on regulation.
3 Statista, Size of the legal services market worldwide from 2013 to 2021 (in billion U.S. dollars), available at https://www.statista.com/statistics/605125/size-of-the-global-legal-services-market/ (last visited: March 19, 2019).
4 ReportLinker, Legal Services Global Market Report 2018, Press Release, February 2018, available at https://www.prnewswire.com/news-releases/legal-services-global-market-report-2018-300616640.html (last visited: March 19, 2019).
5 For an excellent overview over the role of the lawyer profession see Hans-Jürgen Hellwig, Die Anwaltschaft zwischen Rechtspflege und kommerziellem Wettbewerb [The Lawyer Profession between the Administration of Justice and Commercial Competition], BRAK-Mitt. 2008, 92-98.
6 ECJ, Judgment of July 25, 1991, Säger, C-76/90, paragraph 17; ECJ, Judgment of December 12, 1996, Reisebüro Broede, C-3/95, paragraph 38.
7 Of course, the following paragraphs cannot give a comprehensive overview of the evolution of the lawyer profession. However, they give an impression of a history which is worth learning more about. For the German reader, Uwe Wesel, Geschichte des Rechts. Von den Frühformen bis zum Vertrag von Maastricht [History of Law. From early Manifestations until the Maastricht Treaty] (1997). gives a good introduction to the history of law.
8 Wesel (fn. 6), paragraph 109.
9 According to Jörg-Detlef Kühne, Umbruch der Anwaltschaft: Beginn der Selbstorganisation – Deutschland und Frankreich [Transformation of the Lawyer Profession: Start of self-regulation – Germany and France], in: Anwälte und ihre Geschichte [Lawyers and their History], Deutscher Anwaltverein (2011), 123-140 in Germany during the 1920ies the different occupations of Advokaten, Advokatenanwälten, Prokuratoren, Justizkommissaren and Rechtskonsulenten were already regarded as subgroups of one lawyer profession. The English language term “legal profession” which includes solicitors, barristers, notaries and some other legal services providers indicates that the same is true for common law jurisdictions with a “split profession”.
10 Hubert Treiber, Professionalisierungskonzept und Formierung der Anwaltschaft (1830-1870) [Concept of Professionalization and Formation of the Lawyer Profession (1830-1870)], in: Anwälte und ihre Geschichte [Lawyers and their History], Deutscher Anwaltverein (2011), 161-187, 164.
An important driver for professionalization was the need for good legal education. In the 11th century, it was the university of Bologna, where the teaching of Roman law began.11 Jurisdictions began to require studies of the law at universities and/or a practical training as a prerequisite for admission. It can be said that with a more sophisticated and professionalized judiciary the need for well-educated and trained lawyers grew in order to provide equality of arms between the different professions within the legal community. In the present day, in almost all countries of the world, it has become mandatory for a person providing a legal service to be trained and experienced in law. At least certain parts of legal services are activities reserved for individuals trained in law, whose professional conduct is regulated more or less strictly.
C. Evolution of Regulation
Regulation is part of every process of professionalization. Differences can be seen regarding the institutions that regulate the lawyer profession, while by and large, the contents of regulation are quite similar.
I. Contents of regulation
1. Main elements of regulation
The main elements of regulation are admission to the profession, quality control, and a disciplinary system.
a) Admission
Admission systems reach from government-controlled admission to exams taken solely by the profession. The issues of registration, certification and licensing as well as eligibility cannot be answered without looking at legal education: The traditional path to admission is theoretical (academic) and practical training, hence a system of professional socialization. This concept of legal education aims to assist a future lawyer in her or his development to become a more or less fully capable member of the profession upon admission. The opposing model would be a pure knowledge-based system without regulation as to how a candidate requires the necessary knowledge. Skills acquired in a practical training stage do not play a role for admission.
b) Quality control
Quality control can be exercised in a preventive manner, for example through requirements for continuing education, or by a system in which manifested instances of poor performance are sanctioned subsequently.
c) Disciplinary system
Disciplinary system models range from disciplinary panels within the profession to a court-based system. Nowadays, in most modern jurisdictions, all disciplinary systems, wherever they may be based, have adopted procedural rules compliant with standards of due process and possibilities for judicial review.
2. Core values
With regard to content, a common understanding has developed12 that the core values of the lawyer profession, laid down in statute, code of conduct or by court decisions, are independence, avoidance of conflict of interest and confidentiality.
a) Independence
Independence includes independence from the government as well as independence from the client. Even though concepts like “officer of the court”13 or “organ of the administration of justice”14 exist, this does not mean that the lawyer is more obliged to the institutions of government than to the client. Independence of the lawyer from the government is one important precondition for the client’s trust in his or her lawyer. Independence is not a privilege for the lawyer, but a duty toward the client. The duty to be independent gives the lawyer the freedom to stay committed only to the law.
b) Avoidance of conflict
Avoidance of conflict of interest forbids the lawyer to be in a position in which she or he cannot fully represent the interests of the client. It includes the prohibition to take clients if representing them would violate the duty to avoid conflicts. In many jurisdictions, the client cannot even permit the lawyer to represent in conflicting situations. This shows that the core values are not just privileges, but duties which can actually limit the lawyer economically.
c) Confidentiality
The main aspect of confidentiality is that in most jurisdictions the lawyer is allowed to refuse to give evidence in court proceedings and before authorities, which may extend to everything which the lawyer becomes aware of during her or his mandate. The duty of confidentiality is secured by laws and codes of conduct. In France15 and Germany16, for example, it is secured by criminal statute making the breach of this duty a criminal offense. The extent of the attorney-client privilege varies in different jurisdictions.
11 Wesel (fn. 6), paragraph 216.
12 See IBA, IBA International Principles on Conduct for the Legal Profession (2011), available at https://www.ibanet.org/Document/Default.aspx?DocumentUid=1730FC33-6D70-4469-9B9D-8A12C319468C (last accessed: March 23, 2019).
13 Anglo-American legal tradition.
14 German legal tradition.
15 Article 226-13 of the French Criminal Code.
16 Section 203 of the German Federal Criminal Code.
II. Regulatory Institutions
Back to historical developments. Different models of regulation of the profession began to evolve around the turn of the 18th to the 19th century. Regulation is understood here as rule-making, administration or application of rules, and supervision. Before the late 18th century, the lawyer profession had mainly been regulated by the government, either by the executive or by courts. In Canada, the year 1797 marks the beginning of self-regulation, when the Law Society of Upper Canada was created by statute. Before, lawyers had been supervised by the judges they appeared before.17 In the USA the first – rather informal and private – self-regulation of the profession began in the 19th century when local clubs of lawyers decided to give themselves codes of conduct to fill “a vacuum of regulatory institutions and standards”.18 The lack of statutory rules also gave room for State judiciaries to develop regulatory framework for the lawyers in their jurisdiction.19 It was only in the 1920ies, when integrated mandatory bars were created, either by statute or by court ruling.20 In Germany, to give an example from continental Europe, self-regulatory bars (Rechtsanwaltskammern) were established in the late 19th century, after private associations of lawyers (Anwaltsvereine) had demanded independence from a government-supervision which was so tight that lawyers were indeed rather civil servants. The demand for self-regulation did match an attitude of growing self-esteem of citizens who increasingly wanted to break free from subservience to the monarchs. In late 19th century Germany, an important element of independence of the profession was unhindered access to the profession, meaning access for everyone who was qualified, without numeric restrictions. Ironically, it was under the reign of the emperor of the Reich when self-regulation in statutory bars was eventually granted to the lawyers in Germany in 1878.21 France saw the development of mandatory bars (barreaus) with a responsibility mainly for disciplinary procedures of their members. The profession reached at least partial independence from government administration in the mid-19th century.22
A different approach can be found in Scandinavian jurisdictions, where voluntary associations were established in the mid-19th century. Norway, for example, has a system of government licensing, while the voluntary Norwegian Bar Association as an entrusted body performs regulatory tasks. In Sweden, like in Finland, membership in the respective statutory bar is effectively mandatory. Although the legal services markets are free, the title advokat (Sweden) or asianajaja (Finland) is reserved to members.23
To sum up, in some jurisdictions regulation was delegated bottom-down from government (legislature, executive) to the profession, by demand of the profession that had advocated for their “liberation” and for the creation of mandatory bars. In others, the profession itself used the freedom of association to form voluntary bodies and to adopt professional rules bottom-up, while there was a parallel government (court) regulation. A third model of regulation developed with governments delegating some of their regulatory tasks to voluntary associations that then perform public administrative functions. It should be mentioned here that the term “self-regulation” is not used consistently in different jurisdictions. It seems to be used synonymously with “self-government”24 and “self-administration”.25 These models have in common that there is no pure, absolute self-regulation. All models rely on legitimization from outside the profession, while making use of the in-depth knowledge of members of the profession to organize details of regulation. Regulation, which limits professional freedom of the individual lawyer, and controls the legal services market to some degree, needs public legitimation, usually through a statute, in some cases though the judiciary. So, we see that historically, regulation has chosen a path of co-regulation in varying degrees.
Quite dramatic changes in the way the profession was regulated started only after the turn of the millennium.26 On the one hand, there was a difficulty to align the regulatory framework which had been created with the image of a solo practitioner in mind, who – as a generalist – dealt with all legal needs of the clients due to superior education and experience, with a reality in which the legal profession had become increasingly heterogeneous: In the UK, for example, law firms had grown, especially since in 1967 the Companies Act’s ban on law firms to have more than 20 partners was lifted.27 In the US, very large law firms were
17 John Pearson, Canada’s Legal Profession: Self-regulating in the public interest?, 92 The Canadian Bar Review, 555-594, 557 (2013). The Law Society of Upper Canada was not a pure self-regulatory body, since the attorney general and solicitor general of Upper Canada were members of the board, and the judges of the province were able to inspect the Law Society’s actions.
18 Fred Zacharias, The Myth of Self-Regulation. 93 Minnesota Law Review, 1147-1190, 1157 (2009).
19 Charles Wolfram, Lawyer Turf and Lawyer Regulation – The Role of the Inherent-Powers Doctrine, 12 University of Arkansas at Little Rock Law Journal, 1-23, 5 (1989-90).
20 Joseph Planck, We, the Lawyers, 47 American Bar Association Journal, 282-285, 284 (1961).
21 Tillmann Krach, Eine kleine Geschichte der deutschen Anwaltschaft. Von den Anfängen bis 1945 [A Brief History of the German Lawyer Profession. From its Beginnings until 1945], in: 2 DAV-Anwaltausbildung, Deutscher Anwaltverein (2005), 47-85.
22 Kühne, S. 136-137.
23 It is characteristic for jurisdictions with less stress on liberal concepts of rule of law that the lawyer profession is almost entirely regulated by the government. These jurisdictions might rather follow the idea of rule by law, using law as instrument of power, rather than as an instrument to limit government power. Often, these jurisdictions have only a very small number of lawyers. The German Democratic Republic, for example, had a rigid system of state regulation for their 600 lawyers. The Ethiopian government, as another example, is working to abandon their state-run lawyer regulation and grant independence by establishing a statutory mandatory bar and by strengthening voluntary associations.
24 The term “self-government” can be found in Canada (Pearson (f.n. 16), Wesley Pue, In Pursuit of Better Myth: Lawyers’ Histories and Histories of Lawyers, XXXIII Alberta Law Review, 730-767 (1995), Paul Paton, “In the public interest”: Threats to self-regulation of the legal profession in Ontario, 1998-2006, Dissertation (2008), Zacharias (f.n. 17).) and England (Michael Burrage, Mrs. Thatcher against Deep Structures: ideology, impact & ironies of her eleven-year confrontation with the professions, Dissertation (1992)).
25 The term “self-administration” seems to be used predominantly in a context of German law, as a translation of the German “Selbstverwaltung”. This term implies that everything an autonomous body of the profession does is – legally – administrative control and not legislation. Legislation through statues is reserved to the parliament in a system of separation of powers.
26 The focus here is on Europe and North America.
27 John Flood, Megalaw in the U.K.: Professionalism or Corporatism? A Preliminary Report, 64 Indiana Law Journal, 569-592, 570, (1989).
formed around the same time.28 A similar development, even though delayed, took place in Germany after the Federal Court of Justice ruled in 1989 that it was possible to have law firms with offices in more than one district. This led to the development of nationwide law firms.29 The General Agreement on Trade in Services (GATS) and the European Union (EU) legislation allowed for cross-border practice and multinational law firms since 1994.30
On the other hand, a growing perception can be noted since the 1980s that self-regulators allegedly considered the public interest insufficiently, especially when it came to the enforcement of disciplinary sanctions against lawyers. Quite an extensive academic debate about reform of regulation started in North America.31 In Australia, the Legal Profession Amendment Act 200032 changed the face of the profession by allowing non-lawyer co-ownership of law firms in New South Wales. It was the UK Legal Services Act 2007, and legislative changes in Denmark that came into effect in 2008, that started a worldwide discussion about necessary regulatory change.
A 2004 report to the British government by Sir David Clementi33 made suggestions to modernize the regulatory framework for legal services. The British government had felt that the system at the time regulating not only lawyers but other legal service providers, too, needed a reform.34 The report suggested that the regulatory system was inconsistent and too complex; consumer interests were not sufficiently regarded; especially the complaint system, which was regarded as one of the most important tools to satisfy public interest, was deemed insufficient. Following the report a new regulatory system was introduced, which – after further changes – today looks as follows: The Legal Services Board (LSB), created by a legislative act in 2007, is the independent body which oversees the regulation of legal professionals.35 The LSB is accountable to the parliament through the Lord Chancellor, who is part of the government. The Chair of the board is appointed by the Lord Chancellor and must be a lay member. The LSB adopts regulatory objectives.36 Those are principles which guide each approved regulator for a profession. The LSB is also responsible for the Office for Legal Complaints (Legal Ombudsman); a Legal Services Consumer Panel is the advisory body for the LSB. With regard to solicitors, The Law Society of England and Wales is the approved regulator; it delegated the regulatory functions to the Solicitors Regulation Authority (SRA) – an independent division within The Law Society. The Law Society as a whole represents the interest of solicitors as well.37 The SRA sets principles and a code of conduct. Being registered with the SRA and at the same time becoming a member of the Law Society are preconditions for practicing as a solicitor, so membership in both bodies is effectively mandatory. The relationship between the Law Society and the SRA has been a challenge for both.38 As a consequence, the SRA has been advocating for more organizational independence from the Law Society.
The Danish Bar and Law Society had traditionally been an organization with mandatory membership, acting as a regulator in the public interest and at the same time being the representative body of the profession. Through a major reform of the legal framework in 2008, regulatory functions were strengthened. Representative functions were taken from the Danish Bar and Law Society in order to justify mandatory membership and independence from the government. Mandatory membership was seen as not justifiable if the Bar and Law Society exercised functions beyond strict regulatory tasks. Representative functions were only regarded as acceptable as they did “not amount to representing financial, political or marketing issues”.39 As a consequence, the Association of Danish Law Firms was established in 2008 as a voluntary representative association.40 With these changes, the Danish regulatory system moved toward a system traditionally implemented in Canada and Germany. In Canada, the regional mandatory law societies, established by statute, have the obligation to regulate and thus serve the public interest. They exercise self-restraint regarding representation of the interest of the profession. A statement on the Federation of Law Societies of Canada’s – the national umbrella organization’s – website reads: “One of the key strengths of Canada’s legal system is the clear distinction between the function of law societies and that of voluntary associations of members of the profes-
28 Thomas, Pinansky, The Emergence of Law Fimrs in the American Legal Profession, University of 9 Arkansas at Little Rock Law Review, 593-640 (1986); Jack Guttenberg, Practicing Law in the twenty-first Century in a twentieth (nineteenth) century Straightjacket: Something has to give, Michigan State Law Review, 415-491, 441 (2012).
29 Markus Hartung, Großsozietäten und Anwaltschaft [Major Law Firms and the Lawyer Profession], Goltz, Liber Amicorum für Michael Oppenhoff, ed. by Hanno Goltz et al., 37-69, 38 (2017).
30 In Europe, countries like Greece or Italy kept a legal framework for the profession that kept lawyers in small, local firms, where – until today – they practice as generalists.
31 Besides the literature already mentioned it is worth reading Paul Paton, Between a Rock and a Hard Place: The Future of Self-Regulation – Canada between the United States and the English/Australian Experience, Journal of the Professional Lawyer, 87-118 (2008); Deborah Rhode & Alice Woolley, Comparative Perspectives on Lawyer Regulation: An Agenda for Reform in the United States and Canada, 80 Fordham Law Review, 2761-2790 (2012).
32 Available at https://www.lawsociety.com.au/sites/default/files/2018-03/ILP%20toolkit.pdf (last visited: March 24, 2019).
33 Sir David Clementi, Review of the Regulatory Framework for Legal Services in England and Wales (2004), available at http://www.avocatsparis.org/Presence_Internationale/Droit_homme/PDF/Rapport_ Clementi.pdf (last visited: March 23, 2019).
34 This had already been suggested in a 1989 report, suggesting an ombudsman who could investigate how the professional bodies handled consumer complaints: Lord Chancellor’s Department, The Work and Organization of the Legal Profession, as cited in Judith Maute, Bar Associations, Self-Regulation and Consumer Protection: Wither Thou Goest?, Journal of the Professional Lawyer, 53-85, 55 (1989).
35 solicitors, barristers, chartered legal executives, licensed conveyancers, patent attorneys, trade mark attorneys, cost lawyers, notaries and chartered accountants.
36 Legal Services Board, The regulatory objectives (2017), available at https://www.legalservicesboard.org.uk/about_us/Regulatory_Objectives.pdf (last visited: March 22, 2019).
37 For Barristers in England and Wales the Bar Council is the representative and the Bar Standards Board is the regulatory body.
38 Neil Rose, Legal Services Board slaps Law Society with first ever public censure, legalfutures, May 31, 2018, available at https://www.legalfutures.co.uk/latest-news/legal-services-board-slaps-law-society-with-first-ever-public-censure (last visited: March 20, 2019).
39 Henrik Rothe, The Danish Bar and Law Society, brochure (2019), available at https://www.ibanet.org/Document/Default.aspx?DocumentUid=37C8FF3D-A1A9-436F-AF59-56005D89EF46 (last visited: March 19, 2019).
40 The voluntary Association of Danish Law Firms is not an association of individual lawyers, but of law firms.
sion. The function of law societies is to regulate the legal profession in the public interest. [… .] It is the function of voluntary associations of members of the profession such as the Canadian Bar Association, to speak for and represent the interests of their members.”41 Canada thus separates strictly between self-regulators governed by public law and private associations through a “dual system”.
Germany has statutory public self-regulators as well as voluntary associations. The 28 regional mandatory bars (Rechtsanwaltskammern) with the German Federal Bar (Bundesrechtsanwaltskammer) as their umbrella on the one hand and the more than 250 voluntary local bar associations (Anwaltsvereine) with the German Bar Association (Deutscher Anwaltverein) on the other hand are not as clearly separated from each other as in Canada, because in Germany the mandatory bars have certain representative functions, too. It is generally accepted that self-regulators can exercise representative functions to an extent that there is no danger of a conflict of interest between safeguarding public interest and the economic interest of the profession. An important ruling of the German Federal Constitutional Court from 2017 stressed the commitment of mandatory organizations governed by public law to regulation while accepting a representative function as well.42 In Germany, the process of modernizing self-regulation had started in 1987, triggered by decisions of the Federal Constitutional Court obliging the federal legislator and the profession to create a system of rules which reflects the democratic legitimation of the self-regulator’s powers. This process led to reforms which strengthened the system of self-regulation. The means to prevent conflicts of interest,43 at least on a federal level, is to have separate departments with separate functions within the German Federal Bar. To be noted here are the Ombudsman (Schlichtungsstelle der Anwaltschaft) and the rule-making assembly (Satzungsversammlung).
D. Current Trends and Challenges in
Regulation
Today, we see various different regulatory systems. In most jurisdictions, the lawyer profession is independent from government control. Self-regulation usually takes place within statutory framework. Decisions of the self-regulator cannot be overturned by an executive government authority, but only by the judiciary (co-regulation.) Besides being an instrument of independence, self-regulation takes advantage of the proximity of the lawyer profession to their own issues, hence implementing the governance principle of subsidiarity.
With the pendulum having swung towards less government control over self-regulation until the late 20th century, the trend seems to be that regulatory functions have increasingly been taken from the profession by turning them over to government agencies or by more involvement by lay persons in self-regulatory bodies. However, a closer look reveals that most reforms actually realigned a complex system to create a balance between actors from within and outside of the profession. This actually strengthened self-regulatory elements of regulation.
I. Competition Law
On EU level, it is not the Office of the Commissioner for Justice, but the Office of the Commissioner for Competition which is responsible for European legal framework for the lawyer profession. It was Commissioner Mario Monti, who in a 2003 speech44 suggested that the higher regulation of the lawyer profession is, the more difficult access to legal services for the public becomes. The economic approach proved to be not really expedient, mainly because it looked at legal services as if they were a commodity, not taking into account that the character of legal services might not allow a simple comparison to other services.45 The economic approach, together with a competition law perspective on legal services, helped regulators, though, to review regulation in light of its role to strengthen consumer protection, and to abandon unnecessary regulation. The European debate about deregulation, which has not changed the regulatory landscape drastically, has also opened the debate by demonstrating that it can be helpful to assess lawyer regulation in light of other regulated markets.46 On a European level, a common understanding of liberal professions began to form, after the model of the German Freie Berufe concept.47 The discussion added consumer protection to the public interest as a measure for justification of regulation.
II. Regulatory and representative functions
The question to which extent mandatory self-regulatory bodies can and should have representative functions is not fully answered yet. Of course, a systemic risk cannot be denied, if regulatory and representative functions are not kept apart from each other. Separation-of-powers-like
41 Federation of Law Societies of Canada website, https://flsc.ca/about-us/what-is-the-federation-of-law-societies-of-canada/ (last visited March 18, 2019).
42 This decision concerned mandatory membership in chambers of commerce, organized similar to the mandatory bars of the legal profession: BVerfG, Beschluss des Ersten Senats vom 12. Juli 2017 – 1 BvR 2222/12 -.
43 Die anwaltliche Selbstverwaltung. Thesen der deutschen Rechtsanwaltskammern, [Self-Regulation of the Lawyer Profession. Theses of the German Bars] BRAK-Mitteilungen 3/2008, 92.
44 available at http://ec.europa.eu/competition/speeches/text/sp2003_070_en.pdf (last visited: March 24, 2019).
45 Justus Haucap et al., Aspekte der Deregulierung bei den Freien Berufen, (2017) proved from an economic perspective that certain aspects of regulation (admission control and fixed prices) actually can positively contribute to quality and efficiency of services like legal services. The study is available at https://www.freie-berufe.de/wordpress/wp-content/uploads/2017/07/Dice-AB.pdf (last visited: March 28, 2019).
46 Balázs Muraközy & Pál Valentiny, Alternatives to State Regulation: Self- and Co-Regulation, in: Competition and Regulation, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences, 54-95 (2015), available at http://econ.core.hu/file/download/CaR/Murakozy_Valentiny.pdf (last visited: March 15, 2019).
47 See Iain Paterson et al., Economic Impact of Regulation in the Field of Liberal Professions in Different Member States (2007), available at https://www.ceps.eu/system/files/book/1455.pdf (last visited: March 16, 2019); European Centre for Liberal Professions, The State of Liberal Professions Concerning their Functions and Relevance to European Civil Society (2014); for a jurisdiction like Canada which does not know the liberal professions concept, research look at self-regulated professions: see Competition Bureau Self-regulated professions. Balancing competition and regulation, (2007), available at https://www.reco.on.ca/publicdocs/SelfRegulated%20Professions%20Study.pdf (last visited: March 24, 2019).
structures within a bar48 might be one solution, but they are not helpful when a mandatory bar acts predominantly in the economic interest of the profession or when a mandatory bar adopts policies that go beyond their assigned responsibilities. The Canadian and Danish “dual system” models with an explicit (self-) restraint and focus on regulation in the public interest seem to be resilient. They are also an effective means to secure mandatory membership, which remains a key element of self-regulation. However, currently most bars worldwide still exercise regulatory and representative functions with varying degrees.
III. Entity-based regulation
With the lawyer profession having changed drastically within the past 20 years, especially with law firms (or law-firm-like collaboration of lawyers) having become normality in many jurisdictions, regulators have started to rethink their models of regulation. Of course, law firms, as many other enterprises, have a division of labor; a lawyer in a firm does not work like a solo practitioner, especially when it comes to law firm management issues and duties connected to tasks beyond the core legal work. Here, the international discussion about compliance and regulation in the private sector can help to find models to regulate entities rather than the individual.49
IV. Multi-disciplinary partnerships
With the emergence of law firms, the question has come up if non-lawyers can own or be partners of law firms. In Australia and England & Wales, this has been possible now for some years. German law has allowed lawyers to partner with certain profession since 1994.50 Ontario chose to allow multi-disciplinary partnerships as long as the “profession, trade or occupation […] supports or supplements [the] practice of law or provision of legal service […].”51 There seems to be a tendency to be more open to MDPs internationally. The regulatory goal is usually not to endanger the level of client protection traditional regulation grants.52
V. Regulation of non-lawyer service providers
One of the major current challenges facing regulation becomes visible when the legal services market is studied from the perspective of (potential) clients. The success of new actors in the market has demonstrated that the legal services market is larger than the markets the judicial system and lawyers serve. The rise of legal-tech service providers53 has shown that there is a market for inexpensive, fast solutions for legal problems that a lawyer with her or his traditional toolset might not have been able to offer. The debate about regulation of those relatively new actors has only started; it remains to be seen if the approach to use the existing criteria developed to fight unauthorized practice of law is adequate, or if new lines have to be drawn to distinguish reserved activities from services anyone can offer without the protection lawyer regulation gives.54 It seems important that any new government regulation considers empirical research on access to justice and legal needs surveys.55
E. Outlook
There is no one-size-fits-all approach for lawyer regulation. Regulation is organized on a national or even regional level, predominantly according to national law. This should not be an excuse to refuse searching for commonalities. There is a lack of objective comparative studies internationally. One step towards benchmarking is the work the International Bar Association, the global umbrella organization of regulators and representative organizations, has done.56 It proves to be a challenge, though, to rely on collections of self-assessments. Also, a lot of economic analyses seem to focus too strongly on a (quantitative) degree of regulation; empirical unmet legal needs studies that use as starting point the perspective of the recipients of legal services have not been accepted universally. Self-governing status carries with it rights and obligations for the profession, like the core values are privileges and duties for the individual lawyer. Within a rapidly changing market regulation has to continuously adjust to these changes in order to serve its goal. This holds true for the regulation of lawyers and for the rules guiding the institutions that regulate the lawyer profession. The German model of lawyer regulation is quite stable and in conformity with EU law. Wouldn’t it make sense for a law faculty in Germany to lead an interdisciplinary and international debate about good, evidence-based regulation?
48 As it can be found in the German Federal Bar, or – differently – in the Law Society of England and Wales.
49 England & Wales was one of the first jurisdictions to adopt models of entity-based regulation. US states followed.
50 See § 59a Abs. 1 Bundesrechtsanwaltsordnung [Section 59a Para 1 German Federal Lawyer’s Code]. Before 1994, only collaboration with chartered accountants and tax advisors had been allowed.
51 Law Society of Ontario website,
https://lso.ca/paralegals/practice-supports-and-resources/topics/opening,-operating-or-closing-a-practice/business-structures/multi-discipline-partnerships (last accessed: March 15, 2019).
52 The question if external, non-lawyer investment should be allowed, goes beyond the scope of this paper.
53 Markus Hartung, Gedanken zu Legal Tech und Digitalisierung [Thoughts on Legal Tech and Digitalization], Bucerius Law Journal 2017, 151-156.
54 Recently a new “paraprofession” was created by court decision in Washington State, USA. The Limited License Legal Technician is a legal service provider with a license restricted to certain fields, created to offer more affordable legal advice. The LLLT is regulated by the same regulatory authority as the lawyers in Washington. This seems to be an interesting experiment; the LLLT has not been in the market for long enough to evaluate if this is a solution to access to justice issues existing especially in the USA. See https://www.wsba.org/for-legal-professionals/join-the-legal-profession-in-wa/limited-license-legal-technicians (last visited March 24, 2019).
55 Legal needs studies are unknown in Germany and other continental European countries. Especially in English-language jurisdictions, governments, public authorities, organizations of lawyers and NGOs have developed a tool set to evaluate access to justice gaps. For an international overview see OECD and Open Society Foundations, Leveraging the SDGs for Inclusive Growth: Delivering Access to Justice for All (2016), available at https://www.oecd.org/gov/delivering-access-to-justice-for-all.pdf
56 See IBA, IBA Global Regulation and Trade in Legal Services Report 2014 (2014), available at https://www.ibanet.org/Document/Default.aspx?DocumentUid=1D3D3E81-472A-40E5-9D9D-68EB5F71A702 (last accessed, March 15, 2019); IBA, The Independence of the Legal Profession (2016), available at https://www.ibanet.org/Document/Default.aspx?DocumentUid=6E688709-2CC3-4F2B-8C8B-3F341705E438 (last accessed: March 16, 2019).