Accountability and the Regulation of the Large Law Firm Lawyer

The regulation of solicitors in England and Wales has undergone great change in the wake of the Legal Services Act 2007. This article considers these regulatory developments through the lens of accountability, focussing on the regulation of transactional lawyers and the large commercial firms. It examines to what extent the Solicitors Regulation Authority's regulatory framework promotes accountability, examining entity regulation, outcomes‐focussed and principles‐based regulation, reporting and disclosure obligations, the Compliance Officer for Legal Practice and the sanctions system. It argues that although transactional lawyers cannot claim the benefit of the ethical principle of non‐accountability, as far as they and their firms are concerned, the regulatory framework is both unnecessary and insufficient. It duplicates the function of accountability to the client and fails to hold transactional lawyers to account for significant regulatory risks that they present, such as the practice of creative compliance.     

Regulating Law Firms from the Inside: The Role of Compliance Officers for Legal Practice in England and Wales

Following the Legal Services Act 2007, which permitted the delivery of legal services through Alternative Business Structures (ABS), the Solicitors Regulation Authority required all regulated legal service firms to appoint Compliance Officers for Legal Practice (COLPs). COLPs are charged with taking reasonable steps to ensure that firms comply with their obligations, which entails interpreting what outcomes‐focused regulation (OFR) requires of the firm. Yet despite their importance, little is known about how compliance roles operate within legal service firms. We addressed this gap through a series of qualitative interviews that explored COLPs’ views of their roles, their attitudes to regulation, in particular to OFR, and to achieving compliance. We found that COLPs are a key regulatory mechanism in the context of firm‐based regulation and OFR and have a critical role to play in protecting and promoting professional values in both ABS and non‐ABS entities.     

Transnational Models for Regulation of Nanotechnology

Like all technologies, nanotechnology will inevitably present risks, whether they result from unintentional effects of otherwise beneficial applications, or from the malevolent misuse of technology. Increasingly, risks from new and emerging technologies are being regulated at the international level, although governments and private experts are only beginning to consider the appropriate international responses to nanotechnology. In this paper, we explore both the potential risks posed by nanotechnology and potential regulatory frameworks that law may impose. In so doing, we also explore the various rationales for international regulation including the potential for cross-boundary harms, sharing of regulatory expertise and resources, controlling protectionism and trade conflicts, avoiding a "race to the bottom" in which governments seek economic advantage through lax regulation, and limiting the "nano divide" between North and South. Finally, we examine some models for international regulation and offer tentative thoughts on the prospects for each.     

Up Against a Wall: Europe's Options for Regulating Biotechnology through Regulatory Anarchy

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Halfway competitive markets and ineffective regulation: the American health care system

Since the late 1960s the U.S. has attempted to develop a strategy for controlling the rate of growth of health care spending. During the 1970s this strategy relied heavily on various forms of regulation. Some regulatory programs were partially successful in moderating spending increases, but they generated significant opposition--particularly from powerful provider groups, who successfully convinced Congress and the states to dismantle most of the regulatory structure and to substitute various forms of competitive approaches to controlling spending. Some of these competitive strategies have been successful in increasing the efficiency of subsections of our health system. But they too have produced "losers," and the government has been pressured to enter the system to minimize their losses. The net result has been a political stalemate between halfway competitive markets and ineffective regulation. With the rate of health care spending growth near historic levels, it is likely that the 1990s will bring a return to a stronger role for government regulation. But it is unlikely that we are any more willing to tolerate the negative fallout from regulation today than we were in the 1970s, and therefore we predict that the proportion of GNP going to health care will continue to grow throughout the remainder of this century.     

Regulatory Threats to the Law Degree: The Solicitors Qualifying Examination and the Purpose of Law Schools

Two major regulatory changes are affecting the provision of undergraduate legal education in England and Wales. On the one hand, the Qualifying Law Degree is being deregulated, meaning law schools are free to make significant changes to how and what they teach. On the other hand, higher education in England has seen a significant overhaul through the creation of the Office for Students, which treats students as consumers. Now more than ever, law schools need to ask themselves existential questions which will not only test their continued relevance or indeed viability within the ‘market’ for higher education, but also the status of the discipline of law as a whole. The regulatory landscape may indeed present a significant threat, but it is also an opportunity to reflect on what law schools are for, and consequently what changes could result from the academic freedom that comes with deregulation. Whilst different law schools will interpret their mission differently, they should caution against either generalised inertia or succumbing to an outcomes-oriented provision that simply prepares students for the new Solicitors Qualifying Examination. Instead, law schools will find their proper purpose in critical reflection and academic self-grounding, providing undergraduate students with a ‘question everything’ mentality, and showing them that law is something to be experienced and not merely learnt.

     

Management-Based Regulation: Prescribing Private Management to Achieve Public Goals

We analyze a little-studied regulatory approach that we call management-based regulation. Management-based regulation directs regulated organizations to engage in a planning process that aims toward the achievement of public goals, offering firms flexibility in how they achieve public goals. In this article, we develop a framework for assessing conditions for using management-based regulation as opposed to the more traditional technology-based or performance-based regulation. Drawing on case studies of management-based regulation in the areas of food safety, industrial safety, and environmental protection, we show how management-based regulation can be an effective strategy when regulated entities are heterogeneous and regulatory outputs are relatively difficult to monitor. In addition to analyzing conditions for the use of management-based regulation, we assess the range of choices regulators confront in designing management-based regulations. We conclude that management-based regulation requires a far more complex intertwining of the public and private sectors than is typical of other forms of regulation, owing to regulators' need to intervene at multiple stages of the production process as well as to the degree of ambiguity over what constitutes "good management."     

Charities and Political Campaigning: The Impact of Risk-Based Regulation

This article examines the effects of the Charity Commission’s implementation of risk-based regulation on the political campaigning activities of charities. In doing so, it draws on the findings of a recent empirical study which explored charity representatives’ awareness of relevant law and regulation and their perceptions of the obstacles they faced in their campaigning work. The article begins with a brief exploration of the emergence of risk-based approaches to regulation, followed by consideration of the legal and regulatory requirements for risk management by charities. Moving to its main focus of political campaigning, the article notes the unique legal issues faced by charities in campaigning work. It provides a comparative evaluation of the 2004 and 2008 versions of Charity Commission guidance CC9 on campaigning and political activity by charities (CC9) in terms of their approach to legal compliance, their formulation of the specific risks of campaigning and their approach to the process of risk management itself. In addition, the article considers the relevance to campaigning activity of the Commission’s current plans for an ‘enhanced approach’ to risk in its compliance work. The article concludes by considering the potential impacts on charitable campaigning of both the Commission’s overall approach to campaigning and its perceived risks, and of further entrenchment of risk principles in charity regulation.

The legal profession of China in a globalized world: innovations and new challenges

ABSTRACT

The legal profession is undergoing fundamental changes; and this is the case not just in established legal markets. Based on a state-of-the-art sketch, this paper identifies and analyzes the latest innovation initiatives and alternative business models in China’s legal profession. It finds that, propelled by market demands and benefiting from technological advancements, the provision of legal services has become highly versatile today, giving rise to various alternative service providers, especially the rapidly rising online legal service portals. Because they are technically not law firms, the exclusivity requirements on lawyer ownership and legal service provision are not applicable to them. In the meantime, the competition for large corporate clients and lucrative business transactions is fierce and will continue to be so, not only within the club of big Chinese corporate law firms, but also between Chinese law firms and international law firms globally. In this course, some leading big corporate law firms in China are observed to have creatively incorporated key corporate features in running their business and compensating their partners, effectively deviating from the partnership?+?pure legal services regulation. Such market realities question the necessity and effect of the regulatory restrictions on law firm legal form and ownership structure, and call for an agenda for related research in the future.     

Client privilege,compliance and the rule of law: Swedish lawyers and money laundering prevention

Can, and will, lawyers police their clients? This article aims to shed light on the private front-line workers of the Financial Action Task Force on money laundering (FATF). The analysis is based on a study of how Swedish lawyers perceive and handle obligations to police clients within FATF style risk-based anti-money laundering/counter terrorism (AML/CTF) regulation. We find that the lawyers were reluctant to taking on the responsibility for AML/CTF, and that their front-line work was directed towards being compliant enough. Relatedly, we identify several practices of separation that serve to mediate between the conflicting aims and interests in the everyday of this form of private policing. Another finding is that the lawyers by and large position themselves as knowledgeable actors, and view risks of AML/CTF as knowable. Nevertheless, lawyers experienced a principle clash between being ‘not banks’, and being front-line workers for FATF. In particular, the lawyers perceived their role as front-line workers to be more complex due to their professional norms and ethics on client privilege, and what they saw as the proper role of lawyers, being in conflict with the obligation to report clients and their transactions. In concluding, we suggest that paying more attention to the everyday experience of front-line workers when devising regulatory tools may be a way to promote engagement in ‘true’ crime prevention on their part.     

Regulation and Social Solidarity

Justifications for regulation are commonly based on the identification of market failures. This is however inadequate to account for much regulation, and sees regulation as inherently second best to market allocations. This article argues that, although some regulation will be based on market failure, other justifications can be found in the protection of rights and in the maintenance of social solidarity. Theoretical support for this last rationale can be found in the work of Durkheim and Duguit and the concept of public service. To accept this rationale for regulation has important implications both for regulatory policies and regulatory instruments.     

Regulation and Human Rights in Socio-Legal Scholarship

This article sets the scene for a special issue of Law & Policy that brings together the themes of rights and regulation. The articles explore a number of settings where rapid changes in political commitments and economic systems, often stimulated by international developments, place pressures on rights regimes. The articles deploy a variety of methods to draw out differences in both focus and approach in the understanding of rights, when compared with regulation. This introductory article provides a more detailed analysis of these differences in approach, and is suggestive of ways in which they may complement each other. We argue that the articles collectively demonstrate the added valued in juxtaposing rights with regulation. They are suggestive not only of a richer understanding of the impact on rights of broad changes in regulatory frameworks, but more particularly argue for the importance of understanding how processes of institutionalization can underpin or undermine rights regimes, and that regulatory measures may form a key aspect of such institutionalization.     

Smartphone platforms as privacy regulators

A series of recent developments highlight the increasingly important role of online platforms in impacting data privacy in today's digital economy. Revelations and parliamentary hearings about privacy violations in Facebook's app and service partner ecosystem, EU Court of Justice judgments on joint responsibility of platforms and platform users, and the rise of smartphone app ecosystems where app behaviour is governed by app distribution platforms and operating systems, all show that platform policies can make or break the enjoyment of privacy by users. In this article, we examine these developments and explore the question of what can and should be the role of platforms in protecting data privacy of their users.The article first distinguishes the different roles that platforms can have in ensuring respect for data privacy in relevant ecosystems. These roles include governing access to data, design of relevant interfaces and privacy mechanisms, setting of legal and technical standards, policing behaviour of the platform's (business) users, coordinating responsibility for privacy issues between platform users and the platform, and direct and indirect enforcement of a platform's data privacy standards on relevant players. At a higher level, platforms can also perform a role by translating different international regulatory requirements into platform policies, thereby facilitating compliance of apps in different regulatory environments. And in all of this, platforms are striking a balance between ensuring the respect for data privacy in data-driven environments on the one hand and optimization of the value and business opportunities connected to the platform and underlying data for users of the platform on the other hand.After this analysis of platforms’ roles in protecting privacy, the article turns to the question of what should this role be and how to better integrate platforms in the current legal frameworks for data privacy in Europe and the US. The article will argue for a compromise between direct regulation of platforms and mere self-regulation, in arguing that platforms should be required to make official disclosures about their privacy-related policies and practices for their respective ecosystems. These disclosures should include statements about relevant conditions for access to data and the platform, the platform's standards with respect to privacy and the way in which these standards ensure or facilitate compliance with existing legal frameworks by platform users, and statements with respect to the risks of abuse of different data sources and platform tools and actions taken to prevent or police such abuses. We argue that such integration of platforms in current regulatory frameworks is both feasible and desirable. It would make the role that platforms already have in practice more explicit. This would help to highlight best practices, create more accountability and could save significant regulatory and compliance resources in bringing relevant information together in one place. In addition, it could provide clarity for business users of platforms, who are now sometimes confronted with restrictive decisions by platforms in ways that lack transparency and oversight.     

Control Modes in the Age of Transnational Governance

The article starts with the observation that there are overlaps in, so far, largely unrelated research programs concerned with the legalization in international relations, on the one hand, and transnational regulation and governance, on the other. The analysis of the literature at the interface between the "fourth strata of the geology of international law" and the "governance in the age of regulation" literatures reveals a substantial common interest in structures of transnational regulatory governance. At the same time, the theoretical toolkit of both strands of literature does not match the task of coping analytically with structures and processes in the overlapping realm. To sharpen the analytical edge, the article elaborates hierarchy, market, community, and design as four ideal types of control modes in transnational regulatory spaces. The application of this model to the empirical analysis of a number of regimes underpins the observation that control frequently occurs in hybrid regulatory constellations involving public and private actors across national and international levels. A key example concerns the prominence of domestic regulatory regimes in underpinning transnational governance processes, where national rules achieve extraterritorial effect as much through competitive as through hierarchical mechanisms.     

How to Win Hearts and Minds: Corporate Compliance Policies for Sexual Harassment

Australian law provides incentives and encouragement for companies to develop their own sexual harassment policies. This paper reports on interviews with equal opportunity officers in Australia's financial services industry responsible for best practice sexual harassment policies. Their experiences evoke three scholarly critiques of corporate compliance as a regulatory strategy: (1) that corporate compliance programs are a means by which employees' lives are regimented and controlled by corporate governmentality, (2) or, even worse, that private management priorities subvert the principles of public‐regarding law while appearing to implement them, and (3) that even where law has some effect, regulatory strategies aimed at producing self‐regulatory compliance will provide insufficient deterrence to effect real change. The data however also show that the best of these best practice officers have themselves created complex strategies to resolve tensions between law and management, corporate goals, and normative pressures. In doing so, they have had to combine their personal, professional, and corporate commitments to "win hearts and minds" to antiharassment values by co‐opting management resources to compliance goals through strategic appeals to both "business case" arguments and the specter of public sanctions. This project of cooption depends on their own position and "clout" within the corporation.     

Enticing Business to Create a Healthier American Diet: Performance‐Based Regulation of Food and Beverage Retailers

The American public could enjoy a much healthier diet if we enticed food and beverage retailers (stores and restaurants) to substantially reduce the calories, added sugar, sodium, and saturated fat that pass through their cash registers—say, a 25 percent reduction in sugar, salt, and fat and a 10 percent reduction in calories. Rather than ordering firms to make specific changes in what they sell, this strategy—called performance‐based regulation—leaves industry to figure out what is the best way to transform the American diet in a positive way. Because it calls for real changes in outcomes, this regulatory strategy could be far more effective than information disclosure policies that rely on consumer choices, and because it does not require adding extra cost to the price of food and beverages, it could be politically far more attractive than taxing unhealthy foods. Appealing to both conservative and liberal values, instead of relying on the professional expertise of public health regulators, performance‐based regulation enlists America's large food retailers to serve the public good—or suffer substantial financial penalties for failing to do so.     

The EU approach to net neutrality: Network operators and over-the-top players,friends or foes?

This paper will mainly focus on the EU approach to net neutrality, notably the adequacy of existing and future EU rules to tackle the issue and the ongoing policy debate. It will also consider whether the market has effectively worked around the regulatory lacunae by looking into the relationships between the telecoms industry, as a regulated sector, and the over-the-top (OTT) players. In this regard, it will explore to what extent there is a real battle between telcos and OTTs or if both parties are already finding their own ways to overcome their (apparent) disputes.     

Regulating Global Financial Markets

This paper discusses the role of regulation in the emergence of a global system of linked financial markets. It traces the origins of the internationalization of financial markets to the emergence of new competitive pressures, rooted in changes in the social structures of savings and investment, breaking down both national systems of financial control and international arrangements for monetary and financial co-ordination. These changes have been accompanied and facilitated by a process of international re-regulation, through informal specialist networks. Although these have facilitated the international diffusion of regulatory standards and practices, and attempted to co-ordinate them, they are greatly hampered by espousing the perspectives of the various markets and firms which it is their task to supervise. Together with their minimalist view of the aims of public legitimation and oversight of financial markets, they have proved inadequate to prevent the destabilizing effects of the new global finance on the world economy.     

Intra-country regulation of share markets: does one size fit all?

A large body of evidence suggests that financial development is greater in countries that impose stricter regulatory requirements on their major stock exchanges, but this leaves open the question of whether or not such regulation should be uniformly applied to all equity trading platforms within a country. On the one hand, regulatory variation permits a wider choice of investment opportunities for investors, lowers the cost of capital for some firms, and enhances price discovery and efficiency. On the other hand, the presence of lightly regulated exchanges can potentially have adverse spillover implications for a country’s other financial markets.