Lawyers and law firms play a significant role in the business life of Ireland. Their influence extends beyond the confines of law and legal advice and many lawyers have a significant public profile through business activity or media attention. Many long established law firms are well known names at both local and national level. The legal community is relatively small and yet its members have a strong group influence on national life. The legal community have a notable track record in political life – 3 of the past 5 Justice ministers have been solicitorsFootnote 1. However, this influence is not without challenge; a challenge which has increased in recent years based on concerns about legal costs, competition issues and a number of high profile fraud cases involving solicitors.
John Furlong
General outline; size and composition
The general structure and operating environment for law firms in Ireland is similar to that in England and Wales. Solicitors form one division of the legal profession; the other being the profession of barrister. The division between the professions is the subject of regular debateFootnote 2. Under the Solicitors Acts 1954 to 2008, solicitors are admitted to the Roll of Solicitors and are enabled to practise through a Practising Certificate issued by the Law Society of Ireland. This body has been charged with regulation of the profession since 1898 and is also the representative body for the profession although there have been moves in the past number of years to distinguish these two roles.
In 2011, there are just over 13,000 solicitors on the Roll of Solicitors (in a population of approx. 4.5million). Of these, approximately 8,200 hold Practising Certificates. The ratio of practising solicitors has declined over recent years from a figure of 2.1 per 1,000 of the population in 2006 to 1.8 per 1,000 of the population in 2011Footnote 3.
Outside of Dublin and Cork there are few firms with more than 10 members. There are less than 10 large firms on the scale of the London ‘magic circle’ firms and these are based in Dublin and are engaged in commercial, banking financial services and tax practice.
Size of PracticeFootnote 4
Large international firms, mainly based in the UK, have shown some limited interest in establishing a presence in Ireland and a small number of such firms with niche practice areas such as financial services and insurance have opened offices in Dublin in the past few years. A number of the large Irish commercial firms have offices abroad, usually in London or in the US.
The majority of law firms are engaged in general practice – conveyancing, litigation, probate and some non complex commercial work. All solicitors have a right of advocacy in the courts although the take up on this is largely confined to the lower courts – District Court and Circuit Court and to tribunals. There is a continued reliance by the majority of solicitors on barristers for the advocacy of cases before the courts and for the provision of expert technical advice in the form of counsels' opinions. The large commercial firms are the exception and usually generate their own detailed research and advices.
Some indication of age profile of solicitors in Ireland can be gleaned from the following table which indicates that of the 13,800 solicitors currently on the register, nearly 60% qualified between 1990 and 2009.
Solicitors on the Roll of Solicitors by decade of qualificationFootnote 5
In late 2010, the Law Society calculated that 48 per cent of the holders of Practising Certificates were aged between 20 and 39 and 71% were aged under 50Footnote 6.
Regulation, competition, legal costs and other pending developments
The solicitors profession is regulated by the Law Society of Ireland under the provisions of the Solicitors Acts 1954 to 2008. The Law Society is empowered to take disciplinary action against solicitors including the suspension of a Practising Certificate and the ultimate sanction of striking off a solicitor from the Roll of Solicitors.
Law Society Regulations delegate the regulatory functions of the Society to the Regulation of Practice Committee and the Complaints and Client Relations Committee on an annual basis. The Complaints and Client Relations Committee deal principally with the investigation of complaints against solicitors. This structure is complemented and strengthened by the right of members of the public to refer a complaint to the Office of the Independent Adjudicator if they are dissatisfied with a decision of the Law Society.
The Legal Services Ombudsman Act 2009 provided for the establishment of a statutory office of a Legal Services Ombudsman to oversee handling of complaints by the Bar Council and the Law Society. The provisions of the Act have not yet been commenced and in May 2011, the Government indicated that an Ombudsman would not be appointed in advance of further legislative reforms in this area.
There has been some debate in recent yearsFootnote 7 on the topic of appropriate mechanism for regulation. It is likely that there will be a shift to an independent regulatory body in the near future similar to the Solicitors Regulatory Authority in England and Wales. In April 2011, the Minister for Justice, Equality and Defence – himself a solicitor – stated…“The commitment of the Government is to a strategy that is comprehensive, provides more independent regulation of the legal professions, better regulates legal costs and ensures that the complaints procedures are as effective as possible. The strategy, when implemented, will improve the overall system of delivery of legal services in the State.”Footnote 8
Other ongoing issues relate to the control and possible reduction of legal costsFootnote 9 and the encouragement of greater competition in the legal sector. Both of these issues are to be addressed as part of the 2010 EU Financial Assistance Agreement with IrelandFootnote 10 in a Legal Services Bill which is listed for publication in 2011.
The recession and the property slump in Ireland has had a significant impact on the profession and on the numbers employed in the law firm sector. Added to this has been the impact of a number of high profile cases of professional negligence. These have undermined public confidence and trust in the profession and have also impacted significantly on the costs of professional indemnity cover.
Structure and practice areas, traineeships
Partnership remains the basic business model for law firms. This is despite calls from the Law Society over many years for the legalisation of other models such as “limited liability partnerships” (LLP's) more suited to a modern business environment and which have operated effectively in other jurisdictions. The greater proportion of law firms in Ireland comprise of less than 10 members with additional support in many firms being provided by legal executives and law clerks. The traditional career path within the profession is one of traineeship, solicitor, possibly associateship and then partnership. Intending trainees will usually have undertaken a primary degree and increasingly, this will be either as a non law or a combined law graduate. The Law Society is at present the sole provider in Ireland of professional training leading to the qualification of solicitor. Entry to the Law Society's Law School is by an entrance examination in law (FE1) which must be passed by all applicants. Traineeship comprises two significant modules of full time training at the Law Society's Law School in Dublin accompanied by practical training over three years in a solicitors office in a traineeship contractFootnote 11.
Trainees are provided with a wide and general course of training in the Law School. While some will use many of these general skills on qualification, others will specialise in a particular branch of the law particularly if employed within one of the large commercial firms or in firms with a niche practice area. Specialist training is usually provided within the large commercial law firms relative to particular practice areas.
As both a common law and a European Union jurisdiction, there is also scope for lawyers who have qualified outside Ireland to become Irish solicitors. In addition, due to the strong correlation between Irish and English law, many Irish qualified solicitors work and subsequently qualify in England, particularly with the large London firms. Other popular destinations for Irish qualified solicitors include the US, Australia and New Zealand. In parallel and especially during the boom years of the early century, many common law and European lawyers came to work in Irish commercial law firms and many also re-qualified as Irish solicitors. Special dispensation and transfer of qualification arrangements apply to lawyers from certain jurisdictions. In addition, lawyers from other European states enjoy freedom to practice within Ireland.
On qualification, there are no current statutory restrictions in place on setting up practice although the Solicitors Acts do include provisions to allow for thisFootnote 12. The Law Society recommend that newly qualified solicitors obtain a minimum of one year's experience in an established practice prior to setting up on their own.
The high cost of professional indemnity insurance and low levels of work activity in many areas have resulted in a significant level of unemployment or under employment in the law firm sector. Many newly qualified solicitors are currently employed on short term contracts and many have decided to opt for other employment. This includes working as in house counsel for banks, financial institutions and large corporate bodies. While the numbers undertaking traineeships has dropped in recent years, there is still a significant annual throughput of qualifying solicitors.
Solicitors Qualifying by YearFootnote 13
Solicitors on the Roll of SolicitorsFootnote 14
A number of practice areas have undergone radical change in recent years outside of the impact of the economic downturn. Notably, the Land and Conveyancing Law Reform Act 2009 continued a root and branch reform of property law. This substantive change in the law and practice regarding property transactions also includes the introduction of electronic payment of stamp duty and the extension of compulsory land registration to the whole country. This is part of a planned process for the introduction of a capability for electronic conveyancing of land within the next decade.
The growth in financial services activity, spurred by the development of the Irish Financial Services Centre, has resulted in the introduction of new framework legislation in this area. The banking crisis has resulted in a strengthening of regulatory law for credit institutions – a process which is ongoing. Company law which is currently stretched over a large number of Acts and regulations is set to be consolidated in the near future.
Many other areas of practice have been confronted with substantial changes in relevant law in recent years.Footnote 15
Resources and Legal Publishers
Given the general small size of law firms, only the few large commercial firms operate significant library and in house legal information resources. Smaller firms rely on the services of the Law Society's Library team (profiled elsewhere in this issue). Nonetheless, most firms will have invested in copies of the main relevant texts in paper form. The size of the Irish market for either paper or online material is relatively small and fragmented. Legal publishing is dominated by 3 key players – Bloomsbury Professional, Clarus Press and Thomson Reuters (Round Hall Sweet & Maxwell). The Law Society's Handbooks on various areas of practice are also heavily used as are specialist tax publications from the Irish Tax Institute.
The lack of texts in certain areas and the similarities between English and Irish law means that many English texts are heavily used for practical and comparative research.
Law firms also make use of the limited number of specialist Irish legal periodicals which range from the academic thrust of the Dublin University Law Journal to the more practice focussed approach of publications such as the Commercial Law Practitioner and the Irish Conveyancing Law Journal.
Irish law firms are well served by a number of free to use online services including the Irish Statute Book database and the Oireachtas website for legislation, Courts Service and BAILII for case law and the generous availability of official information from government sources through the Irish Government portalFootnote 16.
Popular online subscription services which include Irish materials are Lexis Nexis, Westlaw IE, Better Regulation and the redoubtable Murdoch's Irish Legal Companion. There are also a number of other specialist online services used in the Irish market some of which include specific Irish material. Again, many resources which offer English material – such as PLC or European material (Justis and Eurolaw) are used for practical commentary and comparative research.
The Future for Law Firms
It is clear that the current recession has had a significant impact on law firms. The effect is not just that of lower levels of business activity and legal transactions in many practice areas. There have also been concerted calls for reduction in what are perceived to be high rates of legal costs and for improved regulatory structures. Added to this is the continuing demand for greater competition in the provision of legal services.
It is likely that these factors will combine to produce a smaller number of law firms through closure and amalgamation – with a more efficient operating base and providing clients with legal services at lower cost. Whether the current tentative engagement in the market of some non Irish firms will expand into a greater penetration remains to be seen.
The ongoing appetite for a career in law shows no sign of abating. It is unlikely that the number of persons qualifying as solicitors will further substantially reduce. The challenge will be to accommodate this new generation of lawyers within the changing environment of the Irish law firm.
