Exactly Who Should Be Able to Claim Privilege?

When the Australian Minister for Financial Services refers to accountants and tax professionals as "the consiglieri of suburban prosperity", you know a good argument is brewing.

The argument is over who should be able to claim privilege over communications with clients and third parties. At the moment we recognize legal professional privilege. But for a long time accountants have bristled resentfully at their being outside this charmed circle.

During the negotiations over the Legal Services Act 2007 accountants lobbied for the extension of privilege to cover them. Resistance by the legal profession was far too strong and the accountants were forced into retreat. Yet help may be at hand.

The Australian government has issued a discussion paper which considers whether some form of privilege ought to be extended to cover tax practice--tax advice privilege. The Australian Law Reform Commission (ALRC) has suggested privilege should be so extended.

The paper notes that a very limited form of tax advice privilege exists in the US in relation to non-criminal matters. New Zealand has codified some form of privilege also. The UK appears to be in an anomalous situation. At the moment Prudential is appealing to the Supreme Court claiming that tax advice it received from PwC was privileged. The Court of Appeal rejected Prudential's claim after hearing arguments for and against by the Institute of Chartered Accountants for England & Wales and the Law Society.

Arguments for and against seem to take place on multiple levels. There is the security of the tax system which is essential to the mature functioning of the developed state. Tax authorities will have to go beyond the taxpayer's willingness to cooperate. But ideally compliance should be voluntary.

Professions are discriminated against if tax lawyers appear to have an unfair advantage over tax accountants. It can be seen to stifle competition and give monopoly powers unfairly. If you want to see something that bears comparison, have a look at Barak Richman's paper on Rabbinical cartels over the appointments of Rabbis--absolutely fascinating. The arguments adduced by Rabbis are the same as most professions use to claim why there should be no change to their monopolies. It comes down, in large part, to the Rabbis having the expertise which the congregations don't have.

A strong argument put to counter extension is the position of the lawyer as officer of the court who has undergone ethical training. The ALRC believes this can be dealt with by accountants having heightened sensibilities to ethics. They should be ethically trained and continually trained.

There are many other arguments which are covered in the paper. This is a paper worth reading for those concerned with ethics, professions, and globalization.

We know from experience that much Australian thinking has been exported elsewhere, especially in the forthcoming ethical regime in the UK with outcomes focussed regulation. Moreover, the Legal Services Act introduction of alternative business structures will bring this issue to the foreground as multidisciplinary practices grow.

So, maybe now is the time to pull out those DVD sets of The Godfather so nascent consiglieri can learn how to do that intimate and obsequious murmuring into the ear....

Exactly Who Should Be Able to Claim Privilege?

The Age of the Super Lawyer?

Chrissie Lightfoot has written an interesting article in the Law Society Gazette. She argues that Susskind's dystopian future of commoditized lawyers calling up pre-drafted documents and filling in the blanks is partial and ignores the value of intellectual capital.

Lightfoot's argument is that the most expensive piece of real estate is between the ears and so it has to be deployed carefully and profitably. And there are two elements to it. There is the technical ability to draft, to be an advocate and so forth. While it's necessary it isn't sufficient for the role of super lawyer. To be that you need something more indeterminate, soft skills that allow lawyers to be active in divining what the clients might want.

Some will recognize the the technical/indeterminacy phrasing from an article written on the French university-hospital system in the 1970s by Jamous and Peloille. The balance of the ratio determined the status and preserve of the occupation/profession.

If the technicality aspect was favoured then the work would lend itself to routinization and standardization and could be subsumed under bureaucratic control easily. This is often what defeats occupations that attempt to professionalize themselves. William Twining's idea of the lawyer as plumber or Pericles shows how this could play out. In many respects this is the sort of future Susskind sees for many lawyers by virtue of the widespread use of IT.(*)

On the other side of the ratio is indeterminacy which is intangible but not quite ineffable. It is mythical, rhetorical and hard to pin down. But err too far on this side and the work is hard to protect from incursion by others. The clergy don't have the power they used to in administering the spiritual care of their flocks. Much of that work has been medicalized and is done by psychologists or therapists or even psychoanalysts. Although in law the role of the wise counselor still plays well. Many lawyers are lauded for their "judgment", even though it may not appear to be evidence-based.

Of course it suits Susskind's argument to push the technicality scenario as inevitable and ineluctable. Lightfoot is trying to imagine a new creativity for lawyers that embraces both aspects of the ratio. It won't be available to all but it will cut across many fields.

I think there is an assumption in Susskind that bespoke legal work will only occur at the high-value corporate end. This is a big mistake. If anyone has heard Clive Stafford Smith or Shami Chakrabarti speak, they will understand where I'm going with this. Clive heads up Reprieve which tackles death row and Guantanamo Bay cases. These cases make inordinate demands on lawyers who have to display imagination, creativity, and subversive thinking of the best kind. Clive asks law students in his lectures two questions:

• How many hours a week do you work in law school?
• How many hours do you spend thinking about what you will do after law school?

The first is always some high figure, depending on how much the students want to impress. The second is abysmally low. So when Clive says that you don't really care about your career, it brings the students up short.

There are many areas of legal work that will require the best legal skills. We just haven't acknowledged them yet, because ultimately Susskind's argument hinges on money. Money is the lure and the trap. Bill Henderson's work on the bi-modal distribution of starting salaries clearly shows that students face a harsh world. But it is not one that sees the possibilities.

Lightfoot has her heart in the right place but it is geared towards a uni-dimensional kind of lawyer and laweyring. There is more out there. We need to locate it, map it and make sure our students know about it.

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(*) Andy Boon's critique of Susskind's book, The End of Lawyers? is in the Legal Profession section of Jotwell.com. It's entitled "Armegeddon for the Legal Profession?" (Declaration of interest: I'm one of the section editors, so it's worth reading all the time. We have a great selection of contributing editors.)

The Age of the Super Lawyer?