Law Management Blog

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Rule 9 Gets Another Bashing

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The Law Society Gazette recent publish an article that informed us all that the world has gone mad.

The Law Society’s council voted to change its policy on referral fees yesterday. It adopted a motion by council member Sue Carter to alter council’s existing policy

It does not really matter if you agreed at the time or not to try now to unravel agreements with suppliers is going to be highly costly and disruptive. The rule change (to allow referral fees) has not in my opinion ever led to the client being disadvantaged in anyway and it certainly is not unprofessional. What it does give us is a level playing field upon which to compete when other bodies come into the market. If we are unable to pay fees in the event that the Law Society is successful in their efforts then can we assume that everybody will be banned from paying them? Marketing groups, insurers, banks in fact the very people who are set to enter our arena yet are unlikely to be regulated by the SRA! Yes some solicitors may not be as good at abiding by the rule as others, yes maybe it needs changing with regard to the introducers auditing provisions but we have the SRA to enforce rules and I am sure they will.

This attacks the one principle that we must have in 2011-2012: a fair market place. A level playing field where we are able to compete because if we can not there is a very strong possibility that a very large number of firms will die!

An LSB spokesman said ‘Our business plan makes clear that we are sympathetic in principle to the views of some stakeholders, including the Law Society, that there is a need for a consistent regulatory approach across the sector as regards referral fees. This is why it will be the first issue that we will ask the Legal Services Board consumer panel to advise us on.’

I hope this at least indicates that the LSB have an eye to the bigger picture.

Yes the Law Society have to convince the SRA and the LSC would have to take the same line but if this is the judgement of the councils wise and mighty should we not be worried? Maybe they should debate if the professions subscription should be stopped to them or at least voluntary as they are now a representative body, or should that be unrepresentative?

Written by Andrew Hodges

November 24, 2009 at 5:51 pm

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