Independence, Representation and Risk
The Solicitors Regulation Authority (SRA) has today published a substantial report co-written by Dr Steven Vaughan, Senior Lecturer in Birmingham Law School, and Claire Coe of Claire Legal Ltd.
Concerned with the relationship between large commercial law firms and their clients and the impact of these relationships on professional independence, ethics, standards, the report – Independence, Representation and Risk – shows a shift in the balance of power from law firms to clients, represented by the way in which major corporates and financial institutions seek to impose their own terms of engagement on law firms.
The report draws on 53 interviews undertaken between December 2014 and March 2015 with a mix of senior corporate and finance partners, Compliance Officers for Legal Practice (COLPs), risk officers and others, from 20 leading English and US law firms.
The report shows how clients’ contractual requirements constitute a form of regulation of the law firm by the client. Vaughan and Coe argue that this private regulation of the corporate and finance practices of large law firms and their corporate finance lawyers via contract has the potential to reduce the distinctiveness of those lawyers as legal professionals. As such, those lawyers may be seen by clients as, perceive themselves to be, and begin to behave like, mere ‘service providers’.
Commenting on the report and what it means for the SRA, Dr Vaughan said, “The concept of independence in the SRA Handbook does not account for the complexities of modern practice, or the pressures that lawyers in large law firms face. It needs to be reviewed and redrafted.”
His co-author, Claire Coe, said, “The increasing prevalence of what we have termed ‘shadow client’ relationships, whereby lawyers are appointed and influenced on transactions by parties who are not their clients, was of concern to many of our interviewees and appears to raise very real questions about lawyer independence.”
You can find the full report here: sra.org.uk/reports#independence