As her first year in office as Chief Executive of the Law Society passes, Lorna Jack - the first non-solicitor appointed to the post- reflects on change both within and outwith the profession, and offers her view on how lawyers should approach the critical juncture ahead. 

I write this a day after the final evidence for Stage 1 of the Legal Services Bill have been given to the Justice Committee at the Scottish Parliament and exactly a year since I took up post. Both are together on my mind. It was during the week that I started with the Law Society exactly a year ago that the Scottish Government published its consultation document on what later became the Bill. It was two years before that, that the Law Society consulted with its members on their views on permitting alternative business structures (ABS) before forming and voting on its policy at its AGM 18 months ago. It will be at least another year before any solicitors in Scotland will be able to avail themselves of its permissive powers, and that’s assuming we all don’t derail it in the meantime. Why I am reflecting on this? Well in a paraphrase of Sam Cooke, change can take such a long, long time coming. And yet some change – say for example the collapse of some pretty long established financial institutions - can happen overnight.

Around about the time solicitors were receiving their ABS policy papers for our AGM in May 2008, I was in 270 Park Avenue, the offices of JP Morgan in Manhatten, introducing the First Minister to a number of JPM’s senior management. I confess to having been a little star struck when we talked briefly with their Jamie Dimon, one of few financial services CEOs who have survived the crisis and a legend on Wall Street. He was fresh from having done the weekend deal with the Federal Reserve to buy Bear Stearns, preventing its collapse and the wider systemic crisis which would have followed. When the chips are really down and change is necessary the public and private sectors can move together quickly and make change happen, if not overnight then certainly over a weekend. Several JPM acquisitions have followed since.

Of course the legal profession in Scotland is far from the potential billion dollar melt down of the US financial system. We’re not facing such an immediate clear and present danger. Any potential challenge seems far, far away. ABS will not be fully available in England and Wales until 2011 - although we should bear in mind they do now have over 100 legal disciplinary practices, their first stage in delivering ABS in that jurisdiction. One of the first firms through the door was the largest legal aid firm in the UK, Switalskis, based in Yorkshire. That seems to run counter to the arguments that ABS is all about the large London commercial firms. I wonder what Switalskis long term plans might be? And in other places, like the US, they have only just started to think about ABS with the American Bar recently consulting its membership on the same subject in light of the changes in England and Wales. So challenge from elsewhere might seem far off, but I believe it will come.

And what is the danger anyway? Firms from elsewhere can and have already set up in our jurisdiction and compete for clients’ business. But what if they are able to be better capitalised than our own firms? Is that a danger? I believe it is. “Staying well capitalized, healthy and strong will allow us to better serve our clients, our country and our communities”. Wish that was my quote but sadly I’ve borrowed it from Jamie Dimon. In a horrendous financial services market it seems to have served them well as they continue to acquire and progress profitably in an exceptionally tough environment which is becoming ever more regulated. In the same way legal firms with deeper pockets can of course be more acquisitive. If we never allow Scottish firms to raise external funding other than bank lending then such progress can only be incremental or highly leveraged. Not all firms will want to go down this path but it seems a shame to stop those that do, effectively tying one hand behind their back in any competitive battle they face from firms from other jurisdictions or indeed from other advisory professions, that might be better capitalised.

I believe there is room for alternative business models alongside those that are more familiar to us in the legal profession now. Of course that must be predicated on holding on tight to the high professional and ethical standards which Scottish Solicitors’ demonstrate day in, day out. That’s what the Law Society, as the professional body for Solicitors’ needs to ensure. There are many in and outside the profession who are not persuaded that those ethics are automatically challenged by the ownership of their employer. More than 75% of our Solicitors have employed status. They may be working in-house in the private or public sector. They may be at an early stage in their legal careers working for a large or small firm in private practice. They may report directly to a Solicitor or not. To suggest that somehow their independence or their professional ethics are challenged merely as a result of who owns the organisation they work for, is just wrong. Professionalism sits with an individual not an organization and as long as we all work to constantly guard that then an independent legal profession will thrive.

I hope in Scotland we make a decision to be a leader in how the legal and professional services world is changing, rather than passively observe from the sidelines. And of course it would be more than nice to see Scotland economically gain from change, rather than stand by and watch others take clients and market share

Lorna