The legal system and its structure - Essay Example

The legal system and its structure The legal system of the United Kingdom of Great Britain and Northern Ireland consists of four countries forming three distinct jurisdictions each having its own court system and legal profession. The countries are England & Wales, Scotland, and Northern Ireland. Established in 1801 with the union of Great Britain and Ireland the United Kingdom achieved its present form in 1922 with the partition of Ireland and the establishment of the Republic of Ireland (The UK Legal System). In 1973 the UK joined the European Economic Community which is now known as the European Union and was required to incorporate the European legislation in to the UK law. Consequently the UK legal system developed into a new form. The current system of law includes seven different courts namely, European Court of Justice, European Court of Human Rights, House of Lords, Court of Appeal, Divisional Courts, High Court and the Crown Court (Structure of the court system in England and Wales). The market for legal and judicial services revolves around the function of these courts. Legal and judicial assistance is required by individuals as well as businesses to resolve issues in their daily lives. The legal services industry in the UK includes solicitor firms’, barrister chambers, representative groups, regulators as well as businesses outside of the legal profession that provide consultancy services to individual and corporate clients. The legal service market in the UK generated revenues over £14.3 billion in 2005 and continues to show potential for growth (Business and Consumer Services). But growth does not necessarily mean in terms of revenues for the industry to grow, it must improve upon its existing infrastructure and provide people with better opportunities and results. These markets are inefficient because of numerous reasons, the most important one’s are as follows. Reasons for inefficient markets The most important reason for inefficiency of the market is the high levels of profitability by mid-tier firms. Since firm’s charge a lot more than they should and without proper competition from other law firms the market suffers from imperfect competition. Another factor that accounts for inefficiency is the lack of review of business models for individual law firms, law firms that were established a long time ago still rely on the same business models as they did half a century ago. Another reason that contributes to inefficiency is the traditional approach of large law firms, to delegate as little responsibility to other offices as possible. While the world today is focusing on delegation of responsibilities and eliminating the head office culture, most well known law firms in UK insist upon doing business using the centralized traditional way. On the other hand, law firms in other regions of the world are focusing on decentralization and earning revenues from practices in smaller functional units. Similarly, less reliance on outsourcing has also played an important role in creating an inefficient market. With the help of modern day technology the division of projects has become increasingly easier and hence some aspects of the projects can be outsourced. And with increasing globalization and changing trends, lawyers and professionals have changed their working habits by operating from homes rather than coming to an office. Clients are given greater flexibility to discuss their issues using mediums they are comfortable with. Furthermore, associations with a single law firm for exceedingly long periods causes dependencies on a few individuals. Partners do not move in between firms and tend to stick together to one firm. This establishes a reliance on the firm’s culture rather than developing in a global culture where people move from one firm to another in search of better opportunities. Similarly, restrictive practices by main legal professional bodies also play a vital role in increasing the inefficiency of the market. The restrictive policies prevent different types of lawyers to work together on a similar case with equal opportunities. Hence, due to restrictive measure lawyers are barred from a tough competition for rendering their services. Ways to improve the markets According to the former governor of the Bank of England, the legal services market can be improved by recommending a framework which will be independent in representing public and consumer interest. It must also be comprehensive, accountable, consistent, flexible, transparent and non restrictive. Such a framework can only be formed by the collaboration of the government and the elements of the legal services industry. In order to improve the industry, both the government and the law firms will have to play their respective roles. The industry can be made efficient if individual entities in the system perform self regulation. Self regulation means to find ways to improve upon ones business by learning from ones mistakes and from evaluating performance. If all law firms devise a strategy to plan, monitor and evaluate business practices they will be able to eliminate short comings in their business processes and hence will be able to cater to their customers more effectively. Firms will also need to analyze their situation and decide if they want to go global, will they outsource some aspects of their business and how well will decentralization work for them. The answers to these questions along with the motivation to improve existing practices will cause a positive change in the market. In order to improve the efficiency the government will also have to play an important role. The government will have to intervene in the business by introducing effective policies that are targeted towards specific domains. An example is the government’s intervention in 2002 to put a rest to the restrictive practices in the legal system. Although the bar opposed the decision the government was focused on achieving what it thought was the best for the system, the government resorted to application of fines if the practices were not abolished. A recent example would be the creation of the Legal Services Board (LSB) in 2009, which aimed to ensure that regulation in the legal service sector was in favor of the public. Since, the interest of the consumer should always lie at the heart of the business. Hence, if the government intervenes in business to ensure that customers interests are safeguarded it will create competition amongst the business which is essential for the efficient running of a business system. Yet another way to improve the market would be to increase public ownership to give the private firms a tough competition as well as to provide people with an alternate to the private law firms. If government intervenes in the legal system by increasing public ownership a consumer will have the option of choosing the public domain for a relatively lesser cost as compared to the private law firms. This will help in driving down the prices of the law firms and will bring competition into the market. But if the government decides to intervene in the legal services industry it must have a proper plan and a concrete strategy. The government will have to justify its step to intervene in a private sector, which if done effectively will pay off for the government as well as for the consumers. Characteristics of efficient markets The characteristics of an efficient market are that in efficient market prices adjust rapidly to reflect new information. The degree of efficiency of the market is dependent upon the quality of information reflected in market prices. The most important feature of this market is that individual business entities cannot outperform the market unless they have low costs of procurement of information. Similarly, in efficient markets a business cannot charge a premium for a very long time because people have other substitutes available. Therefore, efficient markets focus on the operational aspect of a business and increase efficiency of the marketplace by increasing the efficiency of individual businesses. Analyzing the efficiency of the legal service industry These characteristics cannot be applied to the legal service industry in the UK. The reasons are that premium pricing for legal and judicial services has been prevalent in the market for a very long time. It is because people cannot differentiate clearly in between the services of one individual or firm from another and hence end up choosing the one that charges the most or is well recognized. Similarly, the legal service sector lacks in technology and usually does not prefer outsourcing even if it saves a lot of their cost. Therefore, operational efficiency is not attainable and hence the market remains inefficient. Conclusion The legal and judicial service sector in the UK is still relying on the practices that were formed by the previous generations. The industry focuses on a concentration of large well known law firms that are renowned because of their presence in the industry for decades. These firms charge customers according to their wish and there is neither regulation nor a strong competition that drives the prices down. The industry lacks regulation by the government and law firms have been reluctant to give consumers advantages, while the government is trying hard to make decisions keeping the interests of the consumers in mind. Although there are ways to improve the system and make it into an efficient legal system, a lot of work is required on the part of the government as well as individual law firms. Bibliography Business and Consumer Services. 10 December 2009 . Structure of the court system in England and Wales. 10 December 2009 . The UK Legal System. 10 December 2009 . Read More