- absorb accumulated capital surpluses; and
- maintain compound growth in capital accumulation.
One means by which this can occur is through deregulation. This opens up previously-restricted areas for increased capital expansion in several ways: through increasing competition, through removing restrictions on external capital investment, and so on.
This process can currently be seen at work in the legal profession in the UK. Until now, solicitors have been prohibited from sharing their profits with non-lawyers. This has prevented solicitors from entering into partnership with other professionals (such as accountants) or accepting external capital investment. Non-lawyers have been unable to employ solicitors to provide legal services.
All this is now changing with the (gradual) implementation of the Legal Services Act 2007. This will allow solicitors to enter into partnership with other professionals and to accept external investment, and will allow non-lawyers to employ solicitors to provide legal services, albeit still subject to extensive regulation.
While the effects of this remain to be seen, there is broad consensus over certain likely effects. In particular, two predictions frequently made (though not to unanimous support) are as follows:
- Small high-street law firms are seen as being under severe threat. Many will end up being driven out of business by new commercial providers (“Tesco Law”). Many of those that survive may end up in “Specsavers”-style franchise operations, of which an outfit like Quality Solicitors may be a nascent form.
- Many larger firms are expected to seek external investment, or even to float on AIM or the Stock Exchange.
In each case, this is likely to lead to a major cultural change for lawyers. In particular, many senior lawyers will cease to be “capitalists” – partners owning a significant share of the business and having a say in how it is run – and become employees.
Many who today would be sole practitioners or in small partnerships will end up employed by “Tesco Law” or the Co-op instead, just as high-street butchers have ended up working behind supermarket meat counters. In the large firms, most of those who today would be partners will remain employees, albeit very well-remunerated ones in many cases. Even if they own shares in the plc that has replaced their LLP, that will be more in the nature of an employee benefit than a genuine stake in owning and running the business.
In short, a higher proportion of lawyers will be “labour” and a lower proportion will be “capital” (and those who remain capitalists will have diminished power next to their external investors). It’s no exaggeration to describe this as a proletarianisation of the legal profession – provided we expunge from our minds all associations of the term “proletariat” with manual labour, flat caps and horny-handed sons of toil, and focus instead on the technical meaning of “those who sell their labour to capitalists” (which therefore includes many whom we would regard as “middle class”).
Perhaps the result won’t be quite as extreme as I’ve described it here – though the stockbroking partnerships of “the old City” were no doubt as confident of their continuing existence in 1986 as most law firms are today. But the basic point will remain the same: external capital will have new avenues (however closely-regulated) in which to absorb surpluses and pursue compound growth. And the law will complete its transition from being a profession (with a slightly sniffy approach at times towards the whole grubby business of “trade”) to being a business. (Not in all respects a bad thing: it’s not as if the legal profession of old was a by-word for great customer service. But still a significant change.)
As Marx and Engels put it back in 1848:
The bourgeoisie has stripped of its halo every occupation hitherto honoured and looked up to with reverent awe. It has converted the physician, the lawyer, the priest, the poet, the man of science, into its paid wage labourers.