A. INTRODUCTION

5.1 We consider in this chapter the impact of specialisation and the consequences of different ways of regulating specialisation. In considering regulation of specialisation, we concentrate on different types of fields of practice schemes; that is, schemes for regulating advertisements about fields of practice. As we have mentioned earlier, ¹ there are few proponents of other ways of regulating specialisation, such as prohibiting non-specialists from working in specialist fields.

5.2 We look at the impact of specialisation, and of fields of practice schemes, in relation to

• fragmentation of the profession;
• the quality of legal services;
• identification of appropriate practitioners for particular work;
• the speed and cost of legal services;
• particular sectors of the profession (namely, general practitioners, small or outlying practices, and young practitioners).

More detailed consideration of each of these matters is contained in our Discussion Paper, Advertising and Specialisation. ²

B. FRAGMENTATION OF A PROFESSION

5.3 A substantial danger of intensive specialisation within the legal profession, and of fields of practice schemes which encourage such specialisation, is that the profession may become excessively fragmented. ³ Associations of practitioners specialising in particular fields may acquire dominant power over the number of practitioners who work in their field, over those practitioners’ styles of practice, and over many of the rules of professional conduct which those practitioners must observe. This may occur without any vesting of statutory powers in these associations. The associations can become, in practice, largely autonomous sectors of the profession, the members of each of which work principally or exclusively in one field of practice in which they have acquired a dominant, or even monopoly, position.

5.4 The New South Wales Bar Association is an example of a body which has developed into being the de facto regulatory body for one sector of the profession without having been vested with any statutory powers of regulation. ⁴ Recent activities of the Family Law Practitioners Association referred to in the previous chapter, may constitute the early stages of a similar development of de facto power over part of the profession. ⁵ The process of fragmentation is clearly apparent in the history of the medical profession in New South Wales; the Royal Colleges and several other specialist associations have acquired extensive de facto control in their respective fields.

5.5 The extent to which fragmentation occurs can be affected substantially by the introduction of fields of practice scheme. For example, if a scheme adopts membership of a specialist association as the criterion for determining which practitioners may advertise themselves as specialists, it is likely thereby to reinforce or increase the associations power over practitioners in the field in question. Of course, a scheme may strengthen greatly an association’s position merely by permitting membership of the association to be advertised. Moreover, some schemes can cause fragmentation regardless of whether specialist associations develop. For example, a high level scheme is likely to have the effect of excluding from a field all practitioners save those who concentrate their practice solely or overwhelmingly in that field.

5.6 The dangers of fragmentation posed by a high level scheme were referred to in a submission to us by the Bar Association

“such a scheme”, the Association said, “encourages ‘elitism’ of specialists and the consequent combination of specialists in elitist groups, which could well restrict the attaining of specialisation, limit the areas or fields of specialization to those serving the interests of the wealthy, and increase the costs of specialist legal services which would otherwise be available without such a scheme.” ⁷

The Professional Organisations Committee, established by the Government of Ontario to report on the organisation of several professions, including law, said that

“formal specialisation creates serious dangers of balkanizing the professional field by fragmenting it into a series of narrowly defined functions.... We would need to be confronted with much more substantial evidence than we have of massive information breakdowns in the legal services market for us to be persuaded that these dangers are worth running.” ⁸

5.7 We described the process of fragmentation and its dangers, in greater detail in our Discussion Paper. ⁹ In its response to that Paper, the Law Society said that under its proposed fields of practice scheme “central unified control of specialists would prevent any possibility estimates the extent to of fragmentation of the profession”. ¹⁰ In our view, the Society under which de facto power can be acquired by a specialist group despite control remaining, in theory, in the Society. Moreover, it overlooks the practical difficulties which may arise in seeking to control a specialist association which is organised on a national basis or which includes barristers as well as solicitors amongst its members. The number and strength of such associations has increased in the last few years and can be expected to continue to do so. Recent experience in the United States demonstrates the difficulty which State regulatory bodies and professional associations can have in seeking to exercise effective control over high level fields of practice schemes established by national specialist associations. ¹¹

5.8 We regard the dangers of excessive fragmentation as being of fundamental importance in any consideration of possible fields of practice schemes or other means of regulating specialisation. Some of the adverse consequences of fragmentation are referred to in the course of the remaining sections of this chapter.

C. QUALITY OF SERVICE

5.9 We turn now to look at the impact of specialisation, and of various levels of fields of practice schemes, on the quality of legal services. ¹²

I. Advantages

5.10 One of the most important advantages of specialisation was referred to in a submission to us by the Law Society:

“A practitioner who is more highly qualified in an academic sense and who has greater depth of practical experience in a particular field of law should be better able to perform legal services in that field than a general practitioner who provides general services in all or most fields of law to his client.” ¹³

These benefits relate partly to the speed and cost of legal services, which we, consider later in this chapter. But they relate also to quality of service. A practitioner who is specially familiar with a field is less likely to be unaware of, or to misinterpret, the relevant law and practice. Moreover, detailed knowledge of official procedures and personalities in a particular field is often of great importance. These advantages of specialisation have increased in significance as the growing complexity and diversity of Australian society has been reflected in the laws and legal system by which we are governed. The emergence of new fields of practice, and the rapid changes in law and technique in many traditional fields, have made it increasingly difficult for a practitioner to provide skilled service across a wide range of areas. Furthermore, specialisation enables lawyers to restrict their work largely to those fields which interest them most or to which their talents are best suited. Increased job satisfaction can improve greatly the quality of a practitioner s work.

5.11 A fields of practice scheme can increase the likelihood of obtaining the advantages of specialisation to which we have referred. It may encourage practitioners to undertake special training and may assist them to develop and maintain an extensive practice in particular fields. However, these beneficial consequences should not be exaggerated. For example, training which consists solely of lectures and theoretical examinations, or practical experience which is concentrated but short-term, does not necessarily improve substantially the quality of a practitioners work and certainly does not guarantee competence. Some lawyers are adept at passing examinations but have no practical bent, while others are the reverse. Moreover, a lawyer may spend most of his or her time working in a particular field without doing that work as competently as some practitioners who rarely undertake it.

II. Disadvantages

5.12 In some circumstances, a high level of concentration in a particular field can adversely affect the quality of service provided by a practitioner. This may occur, for example, where a client’s problems do not fit neatly into one field of practice. In its response to our Paper, the Bar Association emphasised that problems of this kind commonly arise. ¹⁴ Even if the assistance of other practitioners is sought the overall quality of service may nevertheless suffer from a lack of co-ordination and a diffusion of responsibility, and undue expense and delay may be caused. As we pointed out in our First Report, concerning the general regulation and structure of the profession, difficulties of this kind already arise from the division of the profession into barristers and solicitors. ¹⁵

5.13 Even where work falls entirely within a specialist s field, it sometimes may suffer in quality as a result of intense specialisation Specialists can develop excessively rigid and preconceived responses to problems in their field, rather than seeking fresh or innovative solutions. ¹⁶ It is relevant to note in this context that many of the practitioners who are widely regarded as the leaders of the profession by fellow lawyers are Queen’s Counsel who do not specialise intensively in any particular subject area of law. Their services are highly sought after because of the breadth of their knowledge and experience, and because of their ability to integrate, or to draw analogies between different fields of law. An analogous point has been made by the Law Society in another context, when putting the view that clients with conveyancing work will obtain better service from the all round legal skills of a solicitor rather than the narrower skills of specialist conveyancers of the kind found in South Australia (land brokers) and Western Australia (settlement agents). ¹⁷

5.14 A former President of the American Bar Association, speaking of both the legal and medical professions, has said:

“Both professions have undergone increased specialisation, and the result has been a decrease in the continuous physician- patient or attorney-client relationship. With increased impersonalisation, the warm human relationship between the professional and the patients and clients has disappeared.” ¹⁸

Another possible disadvantage was referred to in a submission to us by a suburban Law Society in Sydney:

“Not all areas of the law are equally remunerative and specialisation could lead to some areas being neglected, with the possibility that such expertise as built up in those neglected areas is of an inferior standard to other areas.” ¹⁹

D. IDENTIFICATION OF APPROPRIATE PRACTITIONERS

I. Advantages

5.15 A major advantage of specialisation is that, provided it is accompanied by a scheme which permits some advertising about fields of practice, it can greatly assist clients to find their way to a lawyer whose skills are appropriate for their needs. There is, however, a wide variation in needs for assistance in identifying appropriate practitioners, and in the type of assistance which different fields of practice schemes can provide. We look first at identification by clients or their lay advisers, and then at identification by lawyers.

Identification by Clients or Lay Advisers

5.16 We referred in our Discussion Paper to some of the evidence which convinces us that many members of the public experience considerable difficulty when trying to find a solicitor with the appropriate skills for their particular problem. ²⁰ Some fail in their attempts and it seems that others may be so daunted that they do not resort to a lawyer at all.

5.17 The nature and degree of the need for assistance in identifying appropriate lawyers varies greatly between different types of client Clients such as large commercial organisations, government agencies, business people, and other repeated users of legal services are likely to have relatively good access to information which enables them to choose an appropriate lawyer. ²¹ If these sophisticated users of legal services do need information about lawyers, it will often be about high levels of skills in areas which the clients can specify with some precision. The cost of the specialist skills which they seek may be of relatively little importance to them.

5.18 But most people are in a very different situation from these sophisticated users. In most instances, these people need information which is readily available, easily comprehensible, and indicates lawyers who are likely to be competent in a broadly defined field of practice. ²² Information about specialists with high levels of skill in narrow fields will often be of little interest to those clients because they cannot identify correctly the appropriate field and are unlikely to be able to afford these specialists’ services. Moreover, such specialists are unlikely to be geographically accessible to many clients in outer suburbs and in country areas.

5.19 These different needs mean that the consequences, in relation to accessibility of legal services, of a given kind of fields of practice scheme, will differ between sophisticated and less sophisticated users of legal services. Information about high level specialisation in narrow fields is of greater significance to sophisticated groups, but their need for assistance in identifying appropriate practitioners is less. For other clients, the major need is for assistance in identifying practitioners who are likely to be competent (but not necessarily highly expert) in broad fields of practice.

Identification by Lawyers

5.20 At present solicitors faced with a problem that falls outside their areas of expertise are limited in the ways in which they can identify appropriately skilled practitioners to whom they can refer aspects of the matter or the whole matter. Particular difficulty in identification can be experienced by country or suburban solicitors who are isolated from the Bar and from the large city firms, in which the majority of leading experts are to be found. ²³

5.21 In some circumstances, a low level fields of practice scheme, using broadly defined fields, would be sufficient to meet these present difficulties in identification But in many other instances lawyers seek experts in narrow fields. Another factor to bear in mind is that self-assertions concerning fields of practice may create fewer dangers where they are directed towards other lawyers rather than to clients.

II. Disadvantages

5.22 The major disadvantage of fields of practice schemes in relation to identification of practitioners is that they may be misleading. For example, they may result in practitioners who are not expert in a particular field being identified as expert in it They also may give rise to practitioners who are expert or competent in a field not being identified as such.

5.23 Different types of fields of practice schemes may have markedly different effects on the incidence of inappropriate selection. The main danger of a high level scheme is that it may fail to identify all those practitioners who are expert or competent in a field and, thereby, may not only restrict access to those who do not qualify under it but eventually may reduce the overall supply of expertise and competence in the field. These omissions may occur because the scheme’s qualifications are too high, or because they are misdirected in that, for example, they place excessive emphasis on lengthy training or experience as an indicator of skill. Misdirected criteria also create the danger of identifying as expert or competent some practitioners who do not have those qualities but who, for example, are merely good at passing theoretical examinations.

5.24 By comparison a lower level fields of practice scheme is much less likely to cause inaccurate adverse implications to be drawn about some practitioners. But a low level or medium level scheme may result in some practitioners being wrongly identified as competent or expert. For example, a scheme may aim to identify competence but. may choose inappropriate criteria for that purpose. And as the Law Society stressed in its response to our Discussion Paper, a scheme may aim to identify willingness to act, or competence, in a particular field, but be misunderstood as connoting a high level of expertise.

5.25 In assessing the disadvantages of identifying some solicitors as more skilled than they really are, it must be borne in mind that the provision of readily available information which is sometimes inaccurate, or sometimes misinterpreted by users, may be a great improvement on a situation in which information on the topic is, for many clients, very difficult to obtain and when obtained may carry an even higher risk of inaccuracy. Subject to the possible impact of the new Legal Services Directory, the latter situation presently exists in New South Wales.

5.26 We have referred earlier to the way in which some fields of practice schemes can encourage fragmentation of the profession. In turn, fragmentation increases substantially the danger that qualifications for specialist status in a field will be determined solely by specialists in that field and in such a way as to unreasonably stifle competition. As a result, many competent practitioners may be unable to meet the qualifications, and clients and other lawyers may be unable to identify and utilise their competence.

E. SPEED AND COST OF LEGAL SERVICES

I. Impact on Practitioners

Advantages

5.27 One of the most important advantages of specialisation is that it can save time and money for practitioners. ²⁴ For example, practitioners who have dealt with a particular type of problem are likely to need less time to research and consider the relevant law and practice if a similar problem is subsequently brought to them. Moreover, the economies of scale may enable a practitioner with a high volume of work in a particular field to achieve greater efficiency by spending time and money on training, and on the development of libraries, equipment, staff and procedures of a kind specially suited to the field.

5.28 The development of specialisation, and of fields of practice schemes, within the profession can facilitate referrals to appropriately skilled practitioners. This may not only assist practitioners to attract specialist work which they can handle with great efficiency, but may also make it easier for them to avoid work which is likely to be slow and unremunerative for them because they lack expertise in the relevant field.

Disadvantages

5.29 High level specialisation may mean that practitioners have to complete lengthy, arduousorexpensivetrainingcoursesinordertoattainspecialiststatus.Itmayalsomeanthat they have to undergo relatively unremuneratiave periods of practice while building up their specialist qualifications. Their resultant expenditure of time, effort and money may be quite substantial. However, they may be compensated by the level of fees chargeable upon acquiring specialist status.

II. Impact on Clients

Advantages

5.30 If specialisation saves time and money for practitioners, some or all of this benefit may be passed on to clients in the form of lower fees. ²⁵ Even if fees remain at the same level, or increase, clients may nevertheless benefit from faster work. Moreover, if specialisation improves the quality of service, an increase in fees borne by the client may be outweighed by the benefits of, for example, winning a case which cheaper but less expert service would have lost.

Disadvantages

5.31 If lawyers expend substantial time and money in acquiring specialist status, they are likely to seek compensation by increasing their fees upon attaining that status. And the prestige of being a recognised specialist is likely to enable such a practitioner to ask higher fees of a client than can a non-specialist who performs a similar task at a similar standard of quality. It is relevant in this context that under the present Australian medical benefits scheme a higher amount is payable if work is done by a specialist than if the same work is done by a general practitioner.

5.32 A major potential disadvantage of intensive specialisation within the profession, and of fields of practice schemes which encourage such specialisation, is that in various fields a cohesive and relatively small group of practitioners may attain a monopoly, or dominant, position in the supply of services, and, by concerted action, push up the level of fees being charged. This danger was referred to in a submission to us by the Bar Association:

“Formal certification of specialisation can only tend to encourage elitism and monopolisation, with a consequent tendency of constantly increasing ‘specialist’ fees, with the restraints of the market place removed, under the guise of particular service to the public.” ²⁶

5.33 A further potential disadvantage is that the development of narrow specialty groups can lead to clients wasting time and money by having to resort to a number of different practitioners over a problem which should have been resolvable by one practitioner. The resultant double-handling, delays and excessive cost are analogous to those which we described in our First Report as arising from the present division between barristers and solicitors. ²⁷

5.34 In assessing the impact of specialisation on speed and cost it is essential to bear in mind the wide diversity of clients and their problems. In some situations, speed and superlative quality may be important and the client may be willing and able to pay a premium for them. In other situations, they may not be important or, although they are important, the client cannot pay for them. A great danger of intensive specialisation within the profession is that by seeking perfection or by creating conditions in which specialists can force their fees up, it may price specialist services out of the reach of most individual clients and at the same time may reduce the supply of non-specialists who can provide the service with reasonable competence at a lower fee. It may also induce, or compel practitioners to concentrate exclusively in one field, rather than using their work in a remunerative field to subsidise their work in other fields where many clients cannot afford high fees.

F. EFFECTS ON PARTICULAR TYPES OF PRACTITIONERS

I. General Practitioners

Advantages

5.35 The development of specialisation within the profession, especially if allied with a fields of practice scheme, can make it easier for general practitioners to refer matters for which they are not suited to other, more appropriate, practitioners. The risks to both the practitioner and the client of inefficient or incompetent service are avoided. This advantage can be very substantial. It is, however, well-known and accordingly we do not dwell on it here. The potential disadvantages are less widely understood and accordingly we refer to them at somewhat greater length.

Disadvantages

5.36 One of the major disadvantages of a high degree of specialisation within the profession, and of high level fields of practice schemes, lies in the possible adverse consequences for general practitioners. As specialisation develops, so general practitioners are likely to lose work, especially work of the more stimulating or remunerative kind that is likely to attract specialists. They not only lose work in certain fields but, over time, their skills in those fields decline through lack of use. Their income and status declines, with a consequentially adverse effect on the number, calibre and morale of practitioners in general practice. These consequences are especially likely to occur if a medium or high level fields of practice scheme is introduced. Such a scheme is likely to lead many clients to under-estimate the competence of general practitioners and to take their work only to specialists certified under the scheme.

5.37 It may be argued that a decline in the number and quality of general practitioners does not matter because clients will be able to avail themselves of the services of specialists. But such an argument overlooks several major considerations. First, many problems benefit from being handled by a lawyer who has developed over some years a general familiarity with the client and with his or her affairs, rather than by a specialist previously unknown to the client Secondly, many clients may be constrained by financial or geographical considerations to resort to a general practitioner rather than to a specialist. Thirdly, many clients may not know in which field their problem lies and therefore may not know which type of specialist to approach. Fourthly, where a problem relates to more than one field it may sometimes be preferable for a general practitioner to handle it rather than for it to be dealt with solely by referral between specialists in the different fields.

5.38 The medical profession provides an instructive example of the importance of general practice, and of the way in which extensive development of specialization within a profession can weaken general practice. We quoted commentators to this effect in our Discussion Paper and we do not reiterate their views here. ²⁸

II. Small or Outlying Practices

Advantages

5.39 Some fields of practice schemes may be of special value to practitioners in practices which are outside central Sydney or are small in size. ²⁹ The present restrictions on advertising about fields of practice hamper those practices more than they hamper either the Bar or the large city firms, each of which has an established reputation as a source of specialists. Some relaxation of present restrictions might assist solicitors in small or outlying practices to develop specialties and might thereby improve the geographical accessibility of specialists within the profession.

Disadvantages

5.40 The introduction of a high or medium-high level fields of practice scheme might militate in some ways against practitioners in small or outlying practices. Requirements such as high level concentration or extensive continuing legal education are likely to be difficult, if not impossible, for many such practitioners to satisfy, no matter how able and hard- working they may be. ³⁰

III. Young Practitioners

Advantages

5.41 Fields of practice schemes of a relatively low level can be of assistance to young practitioners by making it easier for them to advertise about fields of practice and thereby develop specialties. Advertising is often more valuable to young practitioners than to practitioners who already have an established reputation and clientele.

Disadvantages

5.42 The development of a high level of specialisation within the profession can make it more difficult for young practitioners to attract work because they have not had time to develop specialisation to any substantial degree. Moreover, it puts increased pressure on young practitioners to devote themselves to one particular field from the outset of their career, rather than taking time to explore their aptitudes and interests in a number of fields. The Bar Association’s response to our Discussion Paper emphasised the disadvantages of placing such pressure on young barristers. ³¹

5.43 These potential disadvantages are more likely to occur if a fields of practice scheme is introduced and imposes qualifications requiring intensive concentration of work, or lengthy experience or training. Not only will attainment of these qualifications take time, but it may be difficult to attract sufficient work to satisfy the requirements concerning concentration or experience. Young practitioners may be put in the invidious position of not being able to attract work without the qualifications, yet not being able to get the qualifications without attracting work. They are especially vulnerable to the danger of specialist groups acquiring a dominant position in a particular field and imposing unreasonably high entry qualifications in order to inhibit competition in the field.

FOOTNOTES

1. Para. 2.3.

2. Chapter 4.

3. For a fuller discussion of the process of fragmentation and its consequences, see our Discussion Paper, Advertising and Specialisation, pp.37-40.

4. See our Discussion Papers, General Regulation, Chapter 2, and The Structure of the Profession, chapters 2, 6 and 7.

5. See para.3.14 of this Report.

6. See paras.3.32-3.33 of this Report and our Discussion Paper, Advertising and Specialisation, pp. 33-34.

7. “The Certification of Legal Practitioners as Specialists” (Submission No.84), p.9.

8. Report (Ontario Government Bookstore, Toronto, 1980), p.193.

9. See note 5.3.1 above. See also American Law Institute- American Bar Association, Enhancing the Competence of Lawyers (Report of the Houston Conference, 1981), pp.465, 467.

10. “Advertising and Specialisation” (Submission No.412), p.9.

11. See, e.g., Specialisation Committee, American Bar Association, Report to the House of Delegates (August 1979), p.9: Esau, (note 3.28.1 above), pp.165-168; Enhancing the Competence of Lawyers (note 5.7.1 above) pp.327, 348.

12. For a fuller discussion of the matters mentioned in paras. 5.9-5.14, see our Discussion Paper, Advertising and Specialisation, pp.40-45.

13. “The Necessity for Participation by Legal Practitioners in Courses of Continuing Legal Education” (Submission No.217), p.4.

14. “Advertising and Specialisation” (Submission No.406), pi).2-3.

15. See pp. 113-121.

16. For a fuller discussion of this point. see our Discussion Paper, Advertising and Specialisation, pp.44.

17. See, eg. Law Society of New South Wales, “Conveyancing of Land and Conflicts of Interests Relating to Conveyancing Transactions” (Submission No.258), pp.26, 37-38.

18. W. Spann Jr., American Bar Association Journal (1977), vol.63, p.314.

19. Eastern Suburbs Law Society, Submission No.73, p.2.

20. See pp.45-47, 210-211.

21. See eg. Law Society of New South Wales, “The Certification of Legal Practitioners as Specialists in Particular Fields” (Submission No.201), p.2.

22. For a similar view, see Professional Organisations Committee, Report (Ontario Government Bookstore, Toronto, 1980). pp.191-193.

23. See eg. Law Society of New South Wales, “Country Solicitors” (Submission No.270). p.1, and “Advertising” (Submission No.218). p.14.

24. For a fuller discussion of the matters referred to in paras.5.27-5.21-). See Our Discussion Paper, Advertising and Specialisation, pp.50-52.

25. For a fuller discussion of the matters referred to in paras.5.10-5.14, see our Discussion Paper, Advertising and Specialisation, pp.52-54.

26. “The Certification of Legal Practitioners as Specialists” (Submission No.84), p.4.

27. See paras.1.45-1.51.

28. See pp.55-50 of this Paper.

29. For a fuller discussion of matters referred to in paras.5.39-5.40, See Our Discussion Paper, Advertising and Specialisation, pp.56-57. And see also paras.11.7-11.8. and 11.17-11.20 of this Report.

30. See eg. New South Wales Bar Association, “The Certification of Legal Practitioners as Specialists” (Submission No.84). p.9.

31. See “Advertising and Specialisation” (Submission No.406), pp.2-4.