City law firms should be subject to light-touch regulation if a shake-up of the profession is not to inhibit their ability to export legal services around the globe, Clifford Chance has urged.
The world’s largest law firm has told Sir David Clementi, the Prudential chairman leading the review of legal regulation, that a new watchdog should be able to regulate large commercial firms and high street solicitors differently.
The firm has argued consistently that regulators’ demands that solicitors are held to the same rules have hampered their efforts to build a global practice.
In a formal submission, Clifford Chance says there should be a risk-based approach in which regulators recognise the difference between high street practitioners serving people with little legal knowledge and global legal services businesses serving sophisticated multinational companies.
Stuart Popham, senior partner, said: “The one-size-fits-all approach to regulation doesn’t work.” But the firm does call for an overhaul in which the Law Society and Bar Council split their roles as both regulators and representatives of the profession and submit to a new Legal Services Board.
The Bar Council expressed opposition to a “complete severance of our professional organisation”, but accepted that a degree of separation might improve transparency and accountability.
In its submission, the barristers’ body objected to the notion of allowing accountants and lawyers to practice together as advocated by the Office of Fair Trading. It also opposed moves to allow investors or companies to take an ownership stake in law firms.
Separately, the Legal Services Commission, which administers legal aid, called for tighter regulation. In its submission it said: ” …the status quo does more to protect the legal profession than it does to provide a genuinely customer-centric service . . an independent regulator would best serve the public interest.”