Great article in the Financial Post below on the impact that events involving Quindell may have in Canada.

I am fascinated by the Canadian debate. In contrast to England and Wales, where the external ownership of law firms was imposed by government, the exploration of ABS in Canada has been led by a legal profession that is self regulating. The dynamics are therefore very different.

In Ontario, an open consideration of ABSs by the Law Society of Upper Canada led to the polarisation of their recent elections for Benchers. Candidates who were anti ABS were openly supported by the Ontario Trial Lawyers Association. According to the Financial Post article those candidates now form a majority of elected benchers.

As I have observed in a previous post, the way in which the debate over ABS is framed by those who oppose them misses the point. It seeks to contrast "good" lawyers with "bad" ABS and Quindell is grist to this mill. In reality there are also bad lawyer and indeed I have acted in relation to a fair few. I have particular recollection of a solicitor who acted for a client who suffered catostrophic injuries at work and who told clients that the insurance company had offered a figure that was 10% of what they had really offered and it was a good deal. He took the rest. This was done by a solicitor who knew that the money he was stealing was intended to provide for the client and their family because the client could no longer work. No one is suggesting that this should lead to us abolishing the legal profession.

When thinking about whether to regulate ABSs there are two things that need to be considered. First is the market for legal services, second is the legal profession. They used to be the same but the emergence of legal services that sit outside the legal professions, turbo charged by the internet, means that this is no longer the case. There is therefore a real issue as to whether to regulate the legal services market or the legal profession. The choice is not necessarily a binary one. By permitting and regulating ABSs the legal profession would be embracing some of the new entrants and in doing so strengthening its own regulatory framework. The experience of England and Wales is that many ABSs turn out to be law firms that just want to reward employees who are not legally qualified. They are not that scarey.

To simply say no to widening the types of regulated legal businesses risks leaving lawyers as bystanders in a diversifying market where they will become just one type of provider of legal services. That may be a logical choice based on preserving a particular brand identity in a new market but I am not sure that the current debate is asking the right questions.