A Taxonomy of Lawyer Regulation

by Noel Semple, Russell Pearce, and Renee Knake

Legal Ethics, Vol. 16, No. 2, pp. 258-283(2013) (published 2014).

Full text: http://ssrn.com/abstract=2396041

What explains the dramatic contrast between legal services regulation in the United States and anglophone Canada, on one hand, and England/Wales and Australia, on the other? In order to help explain these divergent regulatory choices, and to further comparative analysis, this Essay proposes a taxonomy of theories of legal services regulation drawn from these common-law jurisdictions.

Although most jurisdictions employ a combination of approaches, as well as some hybrid methods, the Essay identifies the two dominant perspectives: (1) the professionalist-independent framework, predominate in anglophone North America, and (2) the consumerist-competitive framework found in the common law jurisdictions of Northern Europe and Australia. This theoretical divide, in turn, helps explain why the United States and Canada have largely adhered to a body of self-regulation focused upon aspirations of professionalism and professional independence. Australia and England/Wales, by contrast, have embarked upon market-oriented reform that purports to promote consumer protection and consumer interests. In describing this taxonomy, we recognise jurisdictions sometimes employ hybrid regulatory strategies that combine elements of the professionalist-independent and consumerist-competitive frameworks, such as gatekeeper rules promulgated by the State (as opposed to gatekeeper regulations promulgated by judges or the legal profession). We also acknowledge that regulatory approaches are dynamic and that regulators may very well shift perspectives over time. Nevertheless, organising the claims of commentators and regulators into categories will help to promote analysis and comparison of legal services regulations, as well as to improve the quality of decision-making by those who craft and enforce the rules. We identify, for example, the crucial distinction between how these two approaches construct an understanding of legal services clients. Consumerist-competitive systems identify clients as consumers (who are similar to consumers of other goods and services) and apply this perspective to the particular context of purchasing legal services. In contrast, professionalist-independent systems understand the experience of a legal services client as fundamentally different from that of other consumers and, accordingly, require a wholly distinct regulatory approach.

The Essay proceeds as follows. Part I situates our inquiry in the context of a larger, more fundamental question: why regulate legal services in the first instance? We identify and describe various theories that explain the introduction of regulation, contrasting in particular the private interest (capture) and public interest (market failure) approaches. Part II then turns to an exploration of the regulators’ normative theories on how legal services ought to be regulated. Here we describe the taxonomy of consumerist-competitive and professionalist-independent approaches, including how consumerist-competitive approaches tend to favour government regulation, market-oriented solutions, firm-level accountability, and principles-based regulatory strategies and why professionalist-independent approaches tend to favour self-regulation, individual lawyer accountability, and command-and-control regulatory strategies. We also describe how some jurisdictions employ both hybrid and multiple strategies, and identify unintended consequences that have confounded the intentions of legal services regulators.