Competition report on Lawyers

P

purple

Guest
Where can I read/get my hands on, a copy of the competition authority's report on the legal industry, er, I mean Profession?
 
TCA

www.tca.ie

There isn't the political will to tackle groups identified in the competition's authority report on the professions.

Its far easier for the authoritis to commission reports, or to listen to Eddie Hobbs complaining about it, than for the authorities to actually do anything about it.
 
TCA

Jumping Jehosophat!..........."The average earnings for lawyers is E121,000". That enlightens me as to why the solicitor doing the probate on my late mother's estate dismissing concerns about costs with the phrase 'these relatively small sums'.

It was clearly to do with the enormous gap in our relative incomes!
 
Re: TCA

I don't think the figures are particularly shocking at all. The report itself clearly states that:

"Solicitors who are owners or partners of law firms tend to have relatively high income levels, with the majority earning over €100,000. This is evidence that partners or owners are able to obtain “leverage” from the work of their associates by charging for associates’ work at higher rates than associates are paid so as to accumulate earnings. Roughly ten percent of owners and partners earn more than €350,000. A small number, most likely part-time practitioners, earn very little."

It seems to me that if I am a business owner, be it as an electrician, IT services provider, haulage contractor, publican, pharmacist or whatever, I am not going to hire employees unless they are going to (among other things) have a positive impact on profits. This is called capitalism and the free market, and is exactly what the Competition Authority wants to encourage (or at least I assume it is - it would be a very strange world indeed if the Authority felt that there was something wrong with businesses looking to hire people and maximise the profit on their employees' labour)

The average figure for solicitors in employment is a much less shocking figure, with median and mean figures being cited for "associates" and "employed solicitors" in the range €31,759 to €49,755. Furthermore, the median income for ALL solicitors is a much more mundane €70,228, and that for business owners is €124k.

A median figure is regarded by statisticians as a better assessment for pay figures, because it removes the distorting effect of the small number of very high earners that you get in any business.

I haven't read the whole report yet - I just went to the average earnings figures when I saw this debate - but in this small section of the report, there is enough sloppy work to make me wonder whether it can be relied upon in terms of research standards. For example:

"The gross value added per worker in the accounting sector is approximately €20,000 less than the legal sector (€62,000 versus €82,000). This suggests that accountants’ incomes are on average lower than those for lawyers."

Oh no it doesn't. It does suggest that accountants who are employees can keep more of what they earn (thus contributing less to the bottom line). It says absolutely nothing at all about average earnings. It might just as easily be consistent with higher average earnings for accountants.

Ah well, why let the facts get in the way of an agenda...........
 
Re: TCA

Sorry, one more small point; the above quoted passage of the report states :

"Roughly ten percent of owners and partners earn more than €350,000. A small number, most likely part-time practitioners, earn very little."

If there is only a small number (of solicitor business owners) earning very little, presumably it would have been easy to check at least a few to see whether they actually are "part time practitioners".

A far more likely explanation in my view is that the majority of the solicitor business owners with very small earnings are those who have only recently set up in business. As a solicitor, (and in common with any other service provider) when you leave the safety of employment, pay for your own office, insurance etc., and advertise your availability to the public, you can often expect to be underwhelmed by the public response for at least a couple of years. The legal profession is young, vibrant and competitive - which is why many solicitors do indeed go into business for themselves (far more so than in engineering or accountancy).

This is only a small point, but the facile assumption in the CA report that the low earners are "most likely part-time" tells me something. It is a little like getting short-changed. Anybody can make a mistake, but when all the mistakes are in the cashier's favour, you have to begin to wonder. In this case, the small number of low-earning business owners might indeeed be consistent with them being mainly part-time, as the report suggests. Equally however, this statistic might be consistent with many solicitors going into business on their own. A high entry rate of new businesses to the market is one of the hallmarks of a properly competitive marketplace. It is my opinion that this is a much more likely explanation of the figure cited

I haven't read the entire report. It may be that I am unfair to the Competition Authority. Perhaps the report has indeed analysed the percentage of law firms which have come into being in the past, say ten years (i.e. new business entrants to the market). Perhaps they have compared this figure with those in other professional services markets. If anyone has read the report and found such analysis, please let me know.


On the other hand, perhaps the Competition Authority has an agenda, and does not want to go looking for findings which may not support its agenda.
 
Re: TCA

If you're a solictor worried about the impact of any agenda the Compeition Authority might have, you're obviously new to the place.

It's been in existence since 1991 and it's impact has been.........what?
 
Competition Authority report

The impact of the Competition Authority report (and, to be fair those Tribunals - worst thing that ever happened the profession) is insidious; Even when people have a good relationship with their own solicitor, and are happy with the value they receive, they still seem to have the impression that most lawyers are coining it and ripping off the public.

As a solicitor, this hurts me, for I am sensitive soul.
 
authors of their own fate

For me solicitors and taxi drivers are in the same bracket. For years they both operated in a closed shop, anti-consumer manner yet refused to acknowledge it, much less try and bring about any change.

Unfortunately the taxi drivers met a sorry fate when the government was forced to deregulate, and the situation has gone from one extreme to the other. (Forced by the impact it was having on multi-national business, not on end customers).

I don't think quite the same will happen to our learned colleagues, they have a much stronger lobby group. It was interesting to see the representative from the bar council (or legal council?) on Q&A during the week. For a highly paid advocate he put up a very weak defense of the status quo.
 
Re: authors of their own fate

You are entitled to your view Tiger, but I can't resist asking whether you have actually had dealings with a solicitor, and if so how it went.

It is an odd thing, but most of my satisfied clients (who I like to think make up the majority of my clients) even as they pronounce themselves satisied with the job and the fee cannot resist commenting that lawyers generally are a real bunch of rip=off merchants.

As regards the taxi comparison, there is actually no numerical restriction on the amount of people who can enter the legal profession, which has been rapidly expanding over the past few years, so the comparison really isn't valid.

People need to realise that it takes time to get new professionals out there. When there is a shortage of A&E nurses or vets, nobody seems to feel the need to moan that it is due to "restrictive practices" but everybody loves to have a pop at the legal profession. And yet, bizarrely, most people seem happy enough with their own solicitor!

I am only in practice since the early 1990s, and I do acknowledge that there was more of a "closed shop" in the law in past decades. But by the time I qualified as a solicitor, this had pretty much become a relic of the past. Honestly.
 
authors of their own fate

MOB - I've only had time so far to skim the first half of the report and picking up your comment about 'closed shop' two of the recommendations - if implemented - would open up the profession. The first is to relinquish the requirement that solicitors have Irish Leaving Certificate. The second is the proposal that other educational institutions other than the Law Society (for solicitors) and the Inns of Court (for barristers) be validated to offer trainings.

There appear to be some extraordinary assumptions in this report, though! For example that Ireland should have as many solicitors and/or barristers as other principalities (e.g. the United Kingdom and Australia); that the rising demand for solicitors' services will continue at the pace shown in the past 10 years; that increasing the potential number of solicitors qualifying each year will somehow automatically produce 'better service' (whatever that means) and affordable fees.

Perhaps I am being too hard and the second part of the document will flesh these (highly optimistic!) assumptions out.

Anecdotally - I have had personal experience of one very good and one incompetent solicitor recently. It is difficult to see how any of the proposals in this report could enhance the competence or the affordability of solicitors as they continue to insist they be self-regulated. Given that in Ireland about a quarter of legal work transacted is on behalf of the State it seems reasonable to lay persons that self-regulation in this highly-protected environment is undesirable and not in the public interest.

This is not taking a swipe at solicitors. They are general common-sense observations applicable to any profession.
 
Re: authors of their own fate

It is an odd thing, but most of my satisfied clients (who I like to think make up the majority of my clients) even as they pronounce themselves satisfied with the job and the fee cannot resist commenting that lawyers generally are a real bunch of rip=off merchants.

I think it's possible to be both satisfied with a service AND feel that you've been charged over and above what's fair and reasonable, relative to the work that's been provided. Do law practitioners think they're above the concept of having their charges questioned?

As regards the taxi comparison, there is actually no numerical restriction on the amount of people who can enter the legal profession, which has been rapidly expanding over the past few years, so the comparison really isn't valid.

No you're right, there is no comparison. If you had enough money, you were always free to enter the taxi industry. In the case of law, entry to the industry is a far more tortuous affair. Entry is restricted/controlled by the very people with a vested interest in limiting supply.

You talk about actual experiences with legal practitioners. I know of several who are doing quite nicely in financial terms but who would amount to nothing more than low-life ambulance chasers if forced to operate in a competitive environment (e.g. America).

I know of one in particular who feels so out of his depth that he's contemplating a career change - to a sales assistant. Yet he can't afford to switch.

If solicitors are that confident in their own abilities they should welcome the easing of entry restrictions. The good ones would surely continue to thrive while the poor ones would be left behind.

Or is that a scenario that's too scary to contemplate?
 
experience

You are entitled to your view Tiger, but I can't resist asking whether you have actually had dealings with a solicitor, and if so how it went.

Yes I have. The end results were satisfactory, but the whole process was very drawn out & had to push them to follow up at every stage. What seems to take days in normal business seems to take weeks in the legal one. As for their final bill, it was a complete joke.

Overall impression was that they were a bit 'lightweight'
 
Re: experience

I am only in practice since the early 1990s, and I do acknowledge that there was more of a "closed shop" in the law in past decades. But by the time I qualified as a solicitor, this had pretty much become a relic of the past. Honestly.
Are you saying the 'closed shop' issue doesn't still apply today, particularly to the barrister side of the profession - where numbers entering to the profession are controlled by (yes, you've guessed it) the barristers themselves via the Law Society.
 
Re: experience

The only section of the report that interested me concerned how can anyone qualify as a Solicitor apart from passing the necessary exams? Seems it's one, possibly only, of the last bastions of nepotism.

All of the older professions, accountancy, engineering, medicine, pharmacy, architecture etc. are open to anyone who gets enough points and passes the exams. That is not the case if one wants to become a Solicitor which was clearly indicated in the C.A's report.

A would-be Solicitor has to become articled or apprenticed to an established Solicitor or firm. Correct me if I've wrong. How does anyone who hasn't got family or other connections achieve this? I'd be most interested to learn how. That is not the case with any of the professions listed above.

To make matters worse, Joe Citizen can only access a Barrister through the intermediary - guess how? The Solicitor.
That mechanism was also criticised in the report. I have a lot of sympathy for Barristers who also depend on having contacts with Solicitors. They sit in the Law Library waiting for a brief from a Solicitor - frequently for years.

In the meantime, a Solicitor can make a good income doing conveyancing once established. It is virtually impossible for a lay person to do their own conveyancing - unlike in Scotland where such costs are minute compared to this country.

I am well aware that every profession has a hard time becoming established and probably spends at least 50% of income on overheads. The Solicitors' profession is a step ahead of all the others. Make that ten steps. Or as long as the Great Wall of China.

8)
 
Re: experience

I am sorry to harp on, but I just want to correct a few points:

1. "A would-be Solicitor has to become articled or apprenticed to an established Solicitor or firm. Correct me if I've wrong. How does anyone who hasn't got family or other connections achieve this?"

Well, in my case, and in the case of most of my contemporaries, you send out your C.V. and if needs be you knock on doors. While there is undeniably a tendency for children of lawyers to follow a parent into the family business, I don't know if the tendency is greater or smaller than that for farmers, publicans, pharmacists, accountants and so on. If anybody has access to useful statistics on the tendency for small businesses to remain in a family, (and where the law ranks on such a scale for such tendency), I would be delighted to hear from them.

2. "I'd be most interested to learn how. That is not the case with any of the professions listed above."

I am not so sure. As best I can recall, the only practical route to becoming an accountant (certainly by far the most common route) is to be employed as a trainee while getting through the exams -which seems to take most people two or three years. Also, I think that to become a chartered civil engineer, a relative of mine had to get sponsored by existing members of the institute (there are admittedly a lot of different engineering institutes, and differing grades of membership). Finally (though I myself think this indefensible) I think there is a restriction on qualified pharmacists going into business for themselves (possibly if their qualification is frmo outside Ireland?)unless they have worked some period for an Irish pharmacist first. Come to think of it, I would be a little surprised to hear that one can qualify as a pharmacist without there being a practical element to the training (i.e. some form of work experiencec, perhaps not unlike the obligatory in-house training for solicitors), but perhaps I am wrong in this.

3. "All of the older professions, accountancy, engineering, medicine, pharmacy, architecture etc. are open to anyone who gets enough points and passes the exams. That is not the case if one wants to become a Solicitor which was clearly indicated in the C.A's report."

Perhaps things have changed since the late 80's; but then, all I had to do was get enough points and pass enough exams, together with a period of in-office training. I got a position for such training without any particular legal connections, and without too much difficulty (about 20 letters to different offices, one interview resulted, one job offer). These days, I think that anybody who passes the entrance exams to the Law Society can get a training position without too much difficulty. Mind you, a colleague of mine in Galway tells me that he gets a couple of C.V.s every week from prospective trainees, whereas my firm (set firmly in small town rural Ireland) probably gets less than one every two months, so perhaps I am not up to date with the trainee recruitment market.


4. "To make matters worse, Joe Citizen can only access a Barrister through the intermediary - guess how? The Solicitor."

This is no longer true. For a few years now, barristers have been piloting a "direct professional access" route for consultation. It would be fair to say that the take-up has been very modest, and that a solicitor still remains the normal route by which one consults a barrister. However, even in America, that bastion of free market forces, it is not unusual for lawyers to specialise in court work (which is what a barrister does) and it is not unusual for such specialists to get their work through referral from\consultation by other lawyers.
 
I think that MOB is putting a good case for his profession, but then again that could be the training.
I think that the Legal profession is probably more open than some and if a private practice wants to take on children or friends or whatever then that's their business.
The issue of access to training places for solicitors and barristers is a major issue. My sister is a solicitor and she got a good apprenticeship but she said that the best student in her class (by a mile) was a girl from Tallaght and she couldn't get a firm in Dublin to take her on. As for the exam and interview process for the Bar; it's less than clear what criteria are applied in selecting successful applicants.

I do take your point on the pharmaceutical profession MOB, the restrictions are blatantly anticompetitive and have nothing to do with standards etc.
The reality in Medicine is that it is, to a great extent, a closed shop where those with access to the market can control the supply of doctors coming up behind them. This is particularly pronounced in the area of general practice.

In principal the idea that any professional body or union can both represent and regulate without doing so in favour of it's members and to the general detriment of the consumer is not credible. That applies to any industry or group.
 
I dont think its fair to take one example of a person who found it hard to get an apprenticeship and as a result of that condemn the profession as a whole. The 'best student' in a class is not always the person who will make the best interviewee or indeed practitioner. I have absolutely no relations in law nor, when I was looking for an apprenticeship, did I have any contacts. And at the time when I was looking for an apprenticeship it was considerably harder to get one due to the limited vacancies at the time- now there are much more vacancies. Sure, as with all walks of life, if you have contacts, it does make it easier. But equally I have never known anyone failing absolutely to get an apprenticeship because of a lack of contacts.
 
Apprenticeships

I also do not work in the legal profession but do have a sister that did a degree and she was lucky enough to get 2 offers of apprenticeships, I have also heard the other side of the story. There is no doubt that this will be the most difficult hurdle to pass but I do think that a person will get one if they persist and possible look beyond their geographical area. I am currently changing my career from IT to Taxation but have had no look getting a trainee position. I have completed 1 yr of 3 and about to complete yr2 but cannot get interviews. This is because only 1 trainee is usually hired in the big firms each year so I may well be forced to try and get a position in Dublin leading to a lot of debt as the starting wage would be 20k max, can be as low as 10k. This is the acid test I suppose if you want to move into the area. I have gone through the phone book and have called every accounting firm and asked if there are any positions, in a few months I will do this again, it might be annoying for them but once I get one offer then the ball will be back in my court. Anyway I suppose in a very roundabout way, what I am saying is to be persistent and believe in yourself and the value you can offer and eventually you will be rewared. Ignore stories about how easy it is for one person vis a vis another.
 
I have never known anyone failing absolutely to get an apprenticeship because of a lack of contacts
I take your general point Vanilla but the issue with that girl was her accent more than her contacts. The sister had no contacts either.
Are you suggesting that there is no snobbery in the legal profession?

Moderators: Should this be moved to LOS?
 
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