The current and future structure and internal organisation of the legal profession : a new institutional perspective
Economic analyses of legal partnerships are conspicuous by their absence. Recent theoretical developments within increasingly interconnected areas of law, economics and organisation facilitate more useful analysis of such issues. The resultant theoretical framework provides an ideal backdrop against which regulatory and related internal and external organisation issues concerning the legal profession in general, and law firms in particular, are discussed. Regulatory issues are discussed in the context of primary information collected during interviews with law firms. Partnership is one of only two currently legitimate practice options for UK solicitors in private practice, the other being sole practice. Presently prohibited corporate and multi-disciplinary practice (MDP), are under current consideration in response to growing pressure to attenuate restrictive regulation. Current proposals for further deregulation threaten professional partnership as an institution. Conve ntional wisdom argues partnership with joint and several liability is appropriate for legal service provision, where partners monitor each others' work quality and have an incentive to through cross-guaranteeing personal liabilities. Mutual monitoring, although important, is not the sole function of partnership, which performs a pivotal role in the wider professionalisation/ socialisation process of the lawyer, and in screening processes within firms. The comprehensive set of strengths and weaknesses of partnership and alternatives thereto are empirically assessed. Certain partnership problems, particularly those of large multi-partner firms, would likely simply re-emerge within alternative practising arrangements. Large firms confront mutual monitoring difficulties, reluctant delegation of decision making authority and cumbersome decision making procedures. The current tendency of growth in partnership size places great strain on partnership and question its longer term viability. The survivability of traditional screening procedures and informal incentive-penalty-reward systems within large modern partnerships are assessed within this thesis. Permitting a wider set of organisational options may do little to ameliorate these and other problems.