Independence, Representation and Risk: An Empirical Exploration of the Management of Client Relationships by Large Law Firms
Report for the Solicitors Regulation Authority, 2015
91 Pages Posted: 25 Oct 2015
Date Written: October 19, 2015
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), Steven Vaughan and Claire Coe (of Claire Legal Ltd) 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’.
The report has substantive chapters on lawyer-client engagement via outside counsel guidelines, conflicts of interest and access to representation, the concept of lawyer independence, and the build up of systemic risk in the legal profession due to client terms and conditions.
Keywords: lawyer, regulation, independence, clients, autonomy, risk, conflicts of interest
JEL Classification: KOO
Suggested Citation: Suggested Citation