“Trusted to the ends of the earth”. Outcomes-focused regulation and risk-taking in the legal profession


Essay, 2016

11 Pages, Grade: commendation


Excerpt

List of Contents

1. Introduction

2. The job of a lawyer to satisfy clients' needs

3. Satisfaction above all else

4. Risks of dissatisfaction and satisfaction

5. Definition and aim of outcomes-focused regulation

6. Ignoring risks and guidance on outcomes-focused regulation
6.1 Primary legislation
6.2 Regulations
6.3 SRA Code of Conduct
6.4 Turning to secondary sources

7. Conclusion

Bibliography
Table of Cases
Table of Legislation
Other Primary Sources
Secondary Sources

1. Introduction

Lawyers “may be trusted to the ends of the earth”1. This statement might not reflect the public opinion anymore. The scandals around lawyers and their legal opinions in the wake of the financial crisis and the publication of the ‘Panama Papers’ raised the questions, if lawyers satisfy their clients ignoring risks and whether outcomes-focused regulation allows these risks to be ignored due to its wide scope.

To answer these questions, this essay will first explain the role of the lawyer to satisfy clients' needs (2.) with regard to the limitations of satisfying the clients' needs (3.) and the risks involved with the dissatisfaction and satisfaction of clients' needs (4.). Following on from these risks, the essay will look at the definition of outcomes-focused regulation and its aim (5.) and whether this approach allows ignoring the risks (6.). This assessment will focus in particular on the guidance to transactions lawyers in commercial practise. For this purpose a transaction lawyer is a solicitor who gives legal advice on a transaction,2 but does not conduct advocacy.3

2. The job of a lawyer to satisfy clients' needs

It has been suggested4 that there is increasing pressure on lawyers to satisfy clients’ needs. It appears necessary to look if it is the job of the solicitor to satisfy the needs of his client. From a contractual point of view the lawyer is bound to adhere to the terms of the contract.5 He delivers the service for which he is paid, which is the way a lawyer makes his livelihood. Therefore it could be said that it is the lawyer's job to satisfy the clients' needs. The financial interest of the solicitor lies with the satisfaction of the client.6

Further, there is the regulatory perspective. Looking at the Principles of the SRA Code of Conduct ("the Code"), the commitment to the needs of the client can be seen. The obligation of the solicitor is not only to protect the clients’ money,7 but also to act in their best interest8 and deliver a proper standard of service.9

From the mandatory outcomes O(1.2), O(1.4), O(1.5) and O(1.6) it can be concluded that the clients’ needs have to be assessed and taken into account to achieve the Principles. These outcomes refer directly to the clients' needs10 or imply them in the need to "protect their interests"11 and to have "resources, skills and procedures"12 necessary for the particular engagement by the client. The necessity to satisfy the clients' needs is further apparent in the outcomes, which focus on the complaints of clients.13 The Code therefore has the view that the satisfaction of the clients' needs is an integral part of the job of a solicitor.

3. Satisfaction above all else

Having seen that the satisfaction of clients' needs has a prominent standing within the Code with three Principles relating to it, the question arises whether the satisfaction stands above all else.

Firstly, there is the compliance with the law. Legal obligations as under the Proceeds of Crime Act 2002 or the Bribery Act 2010 are above any obligation to the client.14 Statutory obligations override the lawyer’s duty to the client not to disclose information and to act in his best interest.15 Secondly, the public interest prevails in a conflict with the clients' interests.16 The public interest embedded in Principles 1, 2 and 3 is placed above the client's interest, both in the numbering of the Principles and in practice.

Therefore, the clients' needs and satisfaction are placed high, but do not reign supreme.

4. Risks of dissatisfaction and satisfaction

With the decision not to place the clients' needs above all else the dissatisfaction of a client can arise. This bares the risk of financial difficulty,17 loss of revenue or client base. The transaction lawyer in particular is under economic pressure to satisfy the clients due to the consequences of the failure to do so.18

However, the risks of blindly satisfying the client are greater then those of dissatisfying as the severity scores for unethical behaviour and breach of regulatory requirements indicate.19 The lawyer's independence20 can become compromised by receiving revenue from only a small number of clients, by the dictation of terms by the clients21 or the supervision by in-house councils.22

Further, the delivering of a proper standard of service23 could be neglected. Even though outcome 1.6 requires taking client needs into account, it is no proper service to the client, who is "opinion shopping"24, if the solicitor only delivers the advice the client is searching for. A lawyer also needs to be "trusted to the ends of the earth"25 and client satisfaction will uphold the trust of the client in his advisor. However, it has to be noted, that the trust of the public in Principle 6 of the Code is not the same as the trust of the individual client. If too much emphasis is placed on the satisfaction of the client, the public perception of the profession as a whole can be damaged.

The rule of law26 is at risk to a lesser degree as the duties to the court are not affected by a transaction lawyer who does not engage is advocacy. It is clear, however, that the Principle is placed as the first one in the Code and therefore has to be taken into account with all activities and prevails over the clients' interests.27

[...]


1 Bolton v Law Society,1994 1 WLR 512, 518.

2 Compare s12 (3) (b) (i) Legal Services Act 2007.

3 Compare s190 (6) Legal Services Act 2007.

4 Amongst others, Royston Greenwood, ‘Your Ethics. Refining Professionalism? The Impact of Management Change’ in Laura Epson (ed), Managing the Modern Law Firm, (OUP, 2013), p. 193.

5 Jonathan Herring, Legal Ethics, (OUP, 2014) p. 116.

6 Ibid, p. 112.

7 Principle 10, SRA Code of Conduct 2011, Version 18.

8 Principle 4, SRA Code of Conduct 2011, Version 18.

9 Principle 5, SRA Code of Conduct 2011,Version 18.

10 O(1.5) and O(1.6), SRA Code of Conduct 2011, Version 18.

11 O(1.2), SRA Code of Conduct 2011, Version 18.

12 O(1.4), SRA Code of Conduct 2011, Version 18.

13 O(1.9) to O(1.11), SRA Code of Conduct 2011, Version 18.

14 Principle 7; para 2, The Principles, SRA Code of Conduct 2011, Version 18; Jonathan Herring, (n. 5), p. 371.

15 Andrew Boon, Lawyers' ethics and professional responsibility (Hart Publishing, 2015), p. 237.

16 para 2, The Principles, SRA Code of Conduct 2011, Version 18. !

17 SRA Regulatory Risk Index, March 2014, p. 10.

18 David Kershaw and Richard Moorhead, ‘Consequential Responsibility for Client Wrongs: Lehman Brothers and the Regulation of the Legal Profession’ (2013) 76(1) MLR 26, 60.

19 SRA Regulatory Risk Index, March 2014, p. 11f.

20 Principle 3, SRA Code of Conduct.

21 SRA Risk Outlook 2016/17, July 2016, p.18.

22 Christopher J. Whelan and Neta Ziv, ‘Privatizing Professionalism: Client Control of Lawyers’ Ethics’, (2012) 80 Fordham LRev, 2577, 2583.

23 Principle 5, SRA Code of Conduct 2011, Version 18.

24 David Kershaw and Richard Moorhead, (n. 18), p. 47.

25 Bolton v Law Society,[1994] 1 WLR 512, 518.

26 Principle 1, SRA Code of Conduct 2011, Version 18.

27 para 2, The Principles, SRA Code of Conduct 2011, Version 18.

Excerpt out of 11 pages

Details

Title
“Trusted to the ends of the earth”. Outcomes-focused regulation and risk-taking in the legal profession
College
University of London
Grade
commendation
Author
Year
2016
Pages
11
Catalog Number
V370671
ISBN (eBook)
9783668482395
ISBN (Book)
9783668482401
File size
563 KB
Language
English
Keywords
Outcomes-focused regulation, Ethics, risk, risk-taking, SRA, Panama Papers
Quote paper
Maximilian Grimmeiß (Author), 2016, “Trusted to the ends of the earth”. Outcomes-focused regulation and risk-taking in the legal profession, Munich, GRIN Verlag, https://www.grin.com/document/370671

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