Exploring Client Relationships in Large Law Firms

Birmingham Law School

‘Our work shows a striking shift in the balance of power from large law firms to their institutional clients, and a number of areas with the potential for lawyers’ independence to be compromised.’ 

The relationship between large commercial law firms and their clients and the impact of these relationships on professional independence, ethics, standards and risk is of central importance to the effective regulation of the solicitors’ profession. In their report, Independence, Representation and Risk, commissioned by the Solicitors Regulation Authority (SRA), Vaughan and Coe show 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. This shift is not necessarily reflected in the current SRA approach to regulation, which starts from the position that the law firm is setting its own terms of engagement. 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’.