Ireland: Are Irish Lawyers Anti-Competitive?

Irish lawyers are divided into two branches: solicitors and barristers. Solicitors (who are regulated by statute) mostly do office work and appear in the lower courts. Barristers (who are regulated by their own disciplinary body, the Bar Council) tend to be specialists who provide legal opinions and appear in the higher courts.

In late 2000, Ireland's Competition Authority advertised for two solicitors for its staff. When asked why the positions were not open to barristers, an Authority spokesman explained that the Bar Council would not allow barristers to be briefed by other barristers, only by solicitors. The spokesman admitted that the ruling was anti-competitive but said the Competition Authority was reluctant to take on the Bar Council!

It's not the first time the Bar Council has been accused of restrictive practices. In 1984, Ireland's Fair Trade Commission published its report into restrictive practices in the Irish legal profession. The Minister for Industry, Trade, Commerce and Tourism had asked the Commission to examine practices which led to increased legal costs to consumers and which reduced or limited employment opportunities in the legal profession.

The report considered both branches of the legal profession: barristers and solicitors. Irish solicitors can advertise their services to the public and can now effectively perform all the functions of a barrister. The Bar Council, however, still prohibits barristers from "touting" or from dealing directly with the public.

Those restrictions on advertising and direct access - as well as issues such as legal education, fee fixing and other anti-competitive practices - were investigated by the Fair Trade Commission.

The final report, published in March 1990, concluded: "We believe that competition between lawyers would be of significant benefit to the public. We also consider that the interests of lawyers would be best served in a competitive environment. Unless consumers are satisfied that high standards of service are provided at a reasonable cost, the long-term survival and prosperity of lawyers will not be assured."

Yet today - 17 years after the Minister's initial request - how many of the core issues tackled by the report have been addressed by the Law Society (the solicitors' controlling body) or by the Bar Council, which regulates barristers?

Some of the incidental proposals in the report, such as the establishment of a small claims court or the extension of the Circuit Court's jurisdiction to £30,000 ($33,000), have been implemented. The "two senior rule" has been abolished, though it's still not uncommon to see two senior counsel in some cases.

The Commission also proposed the abolition of pre-determined scale fees for barristers. The Bar Council has now done away with set fees - though current fees approximate remarkably closely to the former scale fees!

The report recommended a system of common vocational training for solicitors and barristers but, eleven years later, that has not happened. Would-be solicitors and barristers still attend separate lectures in Dublin. The English Bar, on the other hand, has accepted the need to broaden access to the profession, and law graduates may now train for the Bar at centres around the United Kingdom, instead of just in London. In Northern Ireland, prospective barristers and solicitors now train side-by-side.

The report also called for the abolition of barristers' wigs. Legislation was proposed to implement the recommendation, but in response to representations from the Bar, the Court and Court Officers Act 1995 merely made the wig optional. In practice, the vast majority of barristers still robe as they have done for more than a century.

Ken Murphy, Director General of the Law Society of Ireland which represents the country's 6,000-plus solicitors, says many of the recommendations of the Report have been implemented by solicitors.

He pointed out that solicitors were now required to have mandatory professional indemnity insurance, the Law Society had power to investigate excessive fees, an advisory committee on legal training had been set up and lay members had been appointed to the complaints committee.

The former chairman of the Irish Competition Authority, Paddy Lyons, who was a member of the group that drew up the Report, agrees with Mr Murphy. "Quite a number of the recommendations were carried through: things like solicitors being allowed to form limited companies or to advertise - albeit with some controls, which I think is quite right. A lot of solicitors agreed with the changes because they recognised that they were to their advantage.

"But in relation to the Bar, there has been virtually no progress. What little change there has been was the first for 400 years, so I suppose we should be grateful. But there's an awful lot more to do."

In the past, solicitors and barristers were both forbidden to tout for business. The Law Society even decreed that "the use of block letters or layout of an advertising nature" in a newspaper notice was unprofessional. In 1988, members of the Law Society voted by a narrow margin to allow advertising by solicitors and, at the end of that year, the Solicitors (Advertising) Regulations 1988 were passed, allowing advertising of services, but not of fees.

The Code of Conduct for the Bar, on the other hand, still absolutely prohibits advertising for barristers. Paragraph 6.1 says: "A barrister may not do or cause to be done on his behalf anything for the purpose of touting, whether directly or indirectly or which is likely to lead to the reasonable inference that it was done for such purpose."

Paragraph 6.2 of the Code adds: "A barrister may not do or cause to be done on his behalf anything with the primary motive of personal advertisement or anything likely to lead to the reasonable inference that it was so published."(Does this include the Internet?)

The former chairman of the Fair Trade Commission, Myles O'Reilly, who submitted the report, said: "We recognised it would take time to deal with these issues. It needed some Minister to make it a priority but unfortunately that didn't happen. But the advertising issue is critical if you are going to have competition."

The report insisted that: "Freedom to advertise goods and services is second in importance only to price competition in the effective operation of a competitive economy. Consumers, at least, need accurate information regarding availability in order to make an optimal choice from alternatives, and averting is a major method of supplying such information. Any prohibition or restriction upon the freedom to advertise is an extremely serious limitation upon competition.

"A prohibition upon advertising of fees, in particular, will tend to limit effective competition in fees...The Commission does not accept that...advertising lessens the confidence of consumers in the competence, integrity or independence of professionals...The Commission considers that, if price competition is allowed and encouraged, then it is virtually axiomatic that advertising of fees should not be forbidden.

"It recommends that fee advertising by solicitors and barristers should not be prohibited...(and) that any prohibition on direct mailing or cold calling by solicitors and barristers should be removed, subject to rules limiting content.

"The Commission considers that providers of professional services should not be restricted by their professional bodies from advertising. There are grounds, however, for allowing a degree of control to professional bodies in respect of the contents of advertisements placed by their members.

"The prohibition on advertising by barristers, even to solicitors, does not meet with the approval of the Commission and is seen as very much tending to favour established barristers."

Paddy Lyons believes advertising will help newcomers to the Bar to survive. "The Commission was told that some young barristers earned so little that they were starving. While there is a very small number of barristers who earn an obscene amount of money, there are larger numbers who earn less than they would on the dole. But while advertising is still banned, how does the client or solicitor know whom to approach unless barristers can advertise?"

With well over one thousand barristers now practising in the Law Library, the ban on self-promotion can be financially crippling for those who come into the profession without contacts or family ties.

Another recommendation of the report - direct access of the public to barristers - has also failed to materialise. With limited exceptions, anyone who wishes to consult a barrister may only do so through a solicitor. Article 4.1 of the Bar's code of conduct says: "Subject to such exceptions as may be authorised by the Bar Council, a barrister may not act in a professional capacity except upon the instructions of a solicitor."

Article 4.15 adds: "A barrister may not have rooms in a solicitor's office." And Article 4.18 extends the prohibition: "A barrister may not work in a solicitor's office, even though unpaid for the purpose of gaining experience."

The Report criticises this practice: "From the client's point of view, he must retain a solicitor whenever he has need of a barrister, whether the solicitor is strictly necessary or not. The Commission believes that the collective denial of direct access to barristers is open to serious objections.

"It considers that there are many occasions upon which it would be more efficient and less costly if the client could approach and brief the barrister directly. It does not accept that the independence and standards of barristers would be diminished if direct access were allowed...The Commission believes that there should be no rule limiting direct access which is collectively enforced. At the same time, the individual barrister should be permitted to refuse to deal with a client except where a solicitor has been engaged."

Paddy Lyons believes the ban on direct access is nonsensical. "If, for example, the Competition Authority wishes to take an action, its legal adviser - who is an employed barrister - has to instruct an outside solicitor who then has to brief another barrister. It's absolutely daft."

Myles O Reilly agrees that direct access to barristers should be promoted, but believes that, in reality, even if the restrictions are removed, most cases will go through solicitors for practical reasons. But he believes the right should still be available. "It's a bit like solicitors' right of audience in the courts: even if they don't use it, it's useful to have the right."

But Pat Hanratty, Senior Counsel and former vice chairman of the Bar Council, defended the reluctance of the Bar to accede to the proposals on direct access and advertising.

"We got the very strong impression from the Commission that they took on board our views in relation to direct access," he said. We have gone nearly as far as we can on this matter. Public bodies now have direct access to barristers but there's a limit to which our profession can go.

"Effectively, if barristers have direct access to the public, they are holding themselves out to do the work of solicitors. But barristers and solicitors do completely different jobs. In litigation, for example, a solicitor will prepare the case, interview witnesses, take statements. A solicitor also holds client money and maintains client files, but barristers don't have the regulatory framework to enable them to do that.

"Then solicitors need someone to fight the case in court, which is essentially a barrister's job. Although some solicitors exercise their right of audience in the higher courts, it is impractical for most solicitors to do a solicitor's work and a barrister's work. If you went down that road, you'd be talking about a merger of the professions.

"Advertising by barristers would also be undesirable, from the point of view of the clients and of professional standards, and it would add to the cost of the barrister's services."

Mr Hanratty says barristers obtain work by being seen in practice. "Basically, once you get your toe in the door, the Bar is a meritocracy.

"We accept that we have a lot of work to do in promulgating particular types of barristers' expertise among solicitors and a wider audience. But our profession is a very high profile one and most people know what work particular barristers do.

"We also realise there is an income imbalance in the profession, and the issue of low income among junior barristers is a serious one which we shall have to address. A junior hospital doctor gets £24,000 ($27,000) a year once he gets a job, but it would take a very long time before a junior barrister gets to that level of income.

"But the reason for that imbalance is not because young barristers can't advertise. The problem is that there isn't a sufficient trickle down of work from the busier barristers. Admittedly, there has never been a case where the Bar Council has told a barrister 'You are taking on too much work', but barristers do send work back to solicitors if they can't deal with it in a reasonable time. There's plenty of work, but solicitors tend to be creatures of habit who always brief the same barrister."

The Fair Trade Commission report recommended that, if the Bar or Law Society refused to delete or amend their rules or codes of conduct, a restrictive practices order should be introduced, making the clauses illegal. Nothing was done. But now the Competition (Amendment) Act 1996 gives the Competition Authority the right to take action on its own behalf, without a complaint from a member of the public. So will the Authority take action against the Bar?

Don't hold your breath!