Is regulation stifling innovation in the legal sector, or is the current level of regulation necessary and appropriate?
I have a strong view on this and the direct answer is “yes”. Quite simply because more often than not, regulation creates a barrier to implementing a change within my legal practice…or at the very least, makes it more challenging than it should be.
In a previous publication of Modern Law, I reminded readers that innovation can be a new way of doing something that is already being done. Take a CRM system (client relationship management). To engage properly with existing and prospective clients, a good robust CRM system is essential for law firms to cultivate their crop of clients and cross-sell services; along with releasing important need-to-know information.
The UK is far behind in the development of UK-based CRM systems (and by that I mean businesses and their servers located in the UK) when compared to the US. Businesses in the US have been the leaders in CRM systems for decades and we are well behind in offering comparable products here. A few companies are showing promise but they are no match the leader, Infusionsoft.
Regulations restrict our ability to use this product, or in fact any product using servers based in the US. Why? The Patriot Act in the US means that a government body can obtain access to any and all information held by a business with servers in that country without permission or even a court order. Quite clearly a wide remit and open to abuse. Yet a UK based law firm cannot use any product or service where client data is held in the US as that contravenes the SRA Code of Conduct and in particular confidentiality.
I’m not advocating for one minute we do away with the time-honoured, well respected and necessary duty of confidentiality. However it does create a barrier to innovation when a CRM system is only looking to hold some basic contact data. That information will be publically available for most clients, especially corporate clients.
My point is that there are certain regulations that law firms face that stifle innovation and creativity. We are denied access to the available tools out in the world beyond our shores. Regulations whilst necessary can be an absolute block as I’ve illustrated or they can take up time and resources which can be precious leading to a breakdown in effective planning and implementation.