f/k/a archives . . . real opinions & real haiku

July 24, 2003

Expect More FTC Scrutiny of Anti-consumer Ethical Rules

Filed under: pre-06-2006 — David Giacalone @ 7:56 pm


Recent FTC signals, including Hill testimony today (July 24, 2003) by Chairman Timothy J. Muris, suggest that the Commission will continue to focus resources to help prevent or stop professional rules of conduct that stifle competition or unnecessarily limit consumer choice.


From my stint at the FTC, I know that agency Accomplishment Lists are a good guide to the kinds of activities that insiders consider successful and worthy of continued support.  Today, in describing for Congress the Commission’s accomplishments over the last year, Chairman Muris pointed to competition advocacy efforts aimed at protecting and encouraging the benefits of Internet-based competition.


One of the two examples given was the release on January 24, 2003, of two ethics opinions by the North Carolina State Bar. [discussed in our 7/3/03 posting ]  Muris noted that the opinions eliminate the requirement that an attorney be physically present at real estate closings, and allow non-attorneys to obtain signatures and receive and disburse funds at closings, which were recommendations made in joint comments with the DOJ in December 2002.


Joe Simons, the head of the FTC Bureau of Competition, also recently emphasized the importance of advocacy activities relating to the professions, with most examples relating to the legal profession. Addressing the Annual Spring Meeting of the ABA’s Antitrust Section, Director Simons asserted:



Use of Nonenforcement Tools Congress provided the FTC with a unique collection of capabilities to address competition-related policy issues.  These capabilities include expansive power to conduct studies or perform research about the economy and a broad charter to act as an advocate for competition before other government bodies, in addition to the authority to initiate administrative and federal court litigation. We make full use of these capabilities in pursuing a multi-dimensional approach in pursuing our mission.   As with our merger and nonmerger enforcement work, we apply our nonenforcement tools to those sectors of the economy that have the greatest impact on consumers. . . .


Professions In many regulated professions, regulatory bodies and groups of practitioners regularly attempt to restrict advertising and prevent competition from those outside the profession.  These restrictions result in higher prices, less information, and fewer choices for consumers. When it is not feasible to use our enforcement authority to challenge competitive restraints in the professions, we seek to persuade policymakers of the benefits of competition. Most recently, we and the Department of Justice’s Antitrust Division submitted a joint letter to the ABA urging it to substantially narrow or reject a proposed model definition of the practice of law, which would likely reduce or eliminate competition from non-lawyers in providing certain services. Previously, we submitted a joint letter with the Antitrust Division urging the North Carolina State Bar to approve a proposed opinion that would explicitly permit non-lawyers to compete in real estate and mortgage closing services.  In other advocacy work during the past year, we: provided staff comments to the Alabama Supreme Court on attorney advertising rules, urging that any restrictions should be narrowly tailored to prevent unfair or deceptive acts or practices, and that the rules permit communication of truthful and non-deceptive information, and filed an amicus brief in a case seeking to overturn an Oklahoma law that permits only funeral directors to sell caskets.  (emphasis added)


A July 10th press release announced that Simons will be leaving the FTC as of August 1st. There is no reason to think that his successor, Susan Creighton, who has been Deputy Director of the Bureau since August 2001, will change the Bureau’s priorities. In fact, she seems particularly interested in the work of the Commission’s Noerr Doctrine Task Force, which looks at inappropriate attempts by competitors to stifle competition through the abuse of governmental processes.    Chairman Muris devoted considerable attention to the Noerr Task Force and other competition advocacy activities and priorities, in a major speech given in December 2002, entitled Looking Forward: The FTC and the Future Development of U.S. Competition Policy.

Major Probe of Lawyer Discipline in UK

Filed under: pre-06-2006 — David Giacalone @ 2:29 pm

Today’s edition of Legal Week (UK) reports that “The Government has recruited an industry figure to hold a wide-ranging inquiry into the regulation of the legal profession in a move that could see the Law Society stripped of its regulatory powers.” The official announcement of the investigation, which may take 18 months, is expected to be made today by the Department of Constitutional Affairs (DCA).

The article (written by James Lumley, July 24, 2003) note (emphasis added):

“A key focus of the inquiry will be the Law Society’s position as both the representative body for solicitors and the regulator of the profession, in light of repeated attacks by the Government and the Legal Services Ombudsman on the quality of the society’s complaints handling.”

“[T]he Government is already understood to be preparing to increase the powers of the Legal Services Ombudsman. The ombudsman is expected to be turned into a commissioner, with the power to fine the Law Society and Bar Council if they fail to meet their consumer redress targets.”
“The news comes in the same week that a Legal Week/EJ Legal poll of more than 100 partners uncovered strong support for the Law Society losing its dual role, with 64% of respondents calling for such a move.”

Legal Week also reports that the study will be looking into recent failures to police conflict of interest problems, while tackling controversial issues, including whether multi-disciplinary partnerships should be allowed.

A legal reformer could get envious seeing that there’s a nation where these issues are taken seriously by the Government and the regulatory scheme can be addessed on a nationwide basis, rather than fiefdom by fiefdom.  [By the way, I discovered this Legal Week article while browsing the law-related headlines collected — from around the world, with emphasis on UK and USA — at In the Papers.]

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