It is a little understood fact that lawyers were at the forefront of developing the EU single market. As early as 1977 The Lawyers' Services Directive came into force and this was followed in 1998 by the Lawyers' Establishment Directive. Much of the credit for this advanced thinking goes to the Council of Bars and Law Societies of Europe (CCBE) an important and highly regarded pan European lawyers group.
However, in recent years things have become a bit more difficult. Competency for the regulation of legal services lies with individual member states. Many member states have self regulatory arrangements that not only restrict ownership to lawyers but in some cases restrict the types of business structures used by lawyers. Others, most notably England and Wales, have moved away from this framework and introduced entity regulation and external ownership. A model that is clearly approved by the EU as such arrangements were part of the terms of Ireland's bailout.
There is now a much wider spectrum of regulatory arrangements for lawyers across the EU than existed twenty or even ten years ago. At the same time there has been a growth in the number and size of law firms wishing to operate across the single market. Such firms currently need to have a complex structures to comply with each member state's laws. In addition, the overlapping provisions in relation to, for example, conflicts, confidentiality and privilege add a further burden and restrict the ability to take advantage of a single market.
There are wider issues. The restrictions in some members states are limiting the development of legal practices that can compete in the single market. Also, as law firms in more liberal member states get bigger, more business focussed, and international, they will challenge the ability of some individual member states to effectively regulate them. At the moment there are limited structure to enable regulators to share information and effectively regulate entities across borders.
As the new EU administration contemplates its program of activities it will be interesting to see whether we might see more reform in the legal sector.