Harmonization or homogenization? The globalization of law and legal ethics - an Australian viewpoint.

• Author: Mark, Steven

ABSTRACT

This Article examines the pressures of globalization on the practice of law and legal ethics from an Australian perspective. The Article first examines the positive aspects of globalization and then turns to the potentially disruptive and homogenizing aspects of globalization upon indigenous and non-Western societies. Next, the Article considers how globalization threatens to disrupt tradition and culture in Western societies, specifically focusing on the tradition of the law and legal practice. Finally, the Author discusses the response of the Australian legal profession to the demands of globalization. The Author examines changes that have been implemented to the legal practice and the structure of the legal services market, particularly in the state of New South Wales. The Article concludes by predicting that globalization has the potential for undermining legal ethics.

1. INTRODUCTION

   As the twenty-first century surges ahead with its rapacious spread of English

   language, English law, and the mighty U.S. dollar under the banner of globalization, one must remember there is an inextricable bond in society between ethics, culture, and identity. This Article will examine the pressures of globalization on the practice of law and legal ethics from an Australian perspective.

   This Article begins with a general consideration of globalization, assessing its positive aspects. The Article then turns to the homogenizing effects globalization can have, particularly upon indigenous and non-Western societies, with its potential for causing social and economic disruption, and more importantly, the rupture of culture and identity.

   The Article then considers how globalization, with its supremacy of market forces, also threatens to disrupt tradition and culture in western societies, focusing on the tradition of the law and legal practice. Will pressures to harmonize national and transnational legal and ethical systems and pressures to push legal practice from the realm of a profession into that of a business result in a homogenization of culture?

   Finally, the Article turns to the Australian experience where the legal profession--like many of its counterparts worldwide--is grappling with how to respond to the demands of globalization. Here, major changes to the structure of the legal services market and legal practice have been implemented, particularly in the State of New South Wales (NSW). As a regulator of the legal profession, the Author foresees many potential problems, including the undermining of legal ethics, which shape the law as a profession and form the backbone of the rule of law.

   1. The Impact of Globalization

   Over the past twenty years or so, one economic philosophy has held predominance throughout the western world. This is, of course, the philosophy of economic rationalism, which holds that market forces above all else should shape our economic and political decision making. It is core to free market capitalism and the driving force behind globalization.

   As globalization commentator Thomas Friedman explains, "(T)he more you let market forces rule ... the more efficient and flourishing your economy will be ... [G]lobalization ... has its own set of economic rules ... that revolve around opening, deregulating and privatizing your economy...." (1)

   In Australia, this philosophy has been embraced with zeal. (2) As a result, the notion of living in a society with all its attendant cultural mores and habits is being supplanted by that of living in an economy. Everything--from healthcare to correctional services, to education and the arts, to the professions, including legal services--is being reconsidered in light of market forces in which profit appears to be the fundamental goal. (3)

   As such, there is increasing pressure on lawyers in Australia to treat legal practice only as a business, perhaps heralding the erosion of its traditional paradigm as a profession. In the State of New South Wales, significant changes to the structure and practice of the profession have been implemented to this effect. Multi-disciplinary practices (MDPs) with the ability to share receipts with nonlawyers, have been introduced, (4) and from July 1, 2001, legal practices--including MDPs--are able to incorporate as businesses. (5) It is the first jurisdiction in the world to enact such legislation.

   One commentator suggests: "Escalating levels of activity in the corporate world--mergers, downsizing, takeovers, expansions and diversifications--have diluted geographical borders and increased client mobility. The market response has been to demand the provision of transnational legal services." (6)

   A number of State jurisdictions in Australia, most notably New South Wales, have responded to this demand by enacting the Model Practice of Foreign Law Bill, the principal purpose of which is to "encourage and facilitate the internationalization of legal services and the legal services sector by providing a framework for the regulation of the practice of foreign law in (Australia) by foreign-registered lawyers as a recognized aspect of legal practice in [Australia]." (7)

   Alongside the move to support the internationalization of legal services, a considered effort to create a national legal services market in Australia has developed over the last decade. Australia is a federation made up of seven States or Territories, each with its own system of laws and regulatory regimes concerning the legal profession. This system would allow practitioners, be they solicitors or barristers licensed to practice in one State, to be equally entitled to practice in any other State that had joined the National Market. (8) The method of joining the market would be for each State or Territory to pass mutual recognition legislation that would allow practitioners licensed in one State to practice in any other State that had passed similar legislation. (9) As of 1995, all Australian jurisdictions have joined the market allowing for freedom to practice by any practitioner licensed in any on of those jurisdictions. (10) This will be discussed in more detail later on.

   As the Legal Services Commissioner in New South Wales, (11) in effect, an independent ombudsman for the legal profession, I must ask myself what is the role of a regulator within this new market driven paradigm? Are the terms of the new structures realistic? Do they threaten the ethical basis upon which the legal profession in Australia is founded? If so, will the professional tradition survive at all? And indeed, what would be the best outcome for clients, or the consumers of legal services?

   In the light of these questions, this Article will examine the recent changes to the structure of legal practice in New South Wales and Australia. Before such examination occurs, however, I want to consider the ethical implications, both positive and negative, of globalization from a legal perspective.

   Globalization is not a new phenomenon. It has occurred over thousands of years through the movement of people and cultures, the expansion of religions, and the development of land and sea trading routes. The present cycle of globalization, however, is focusing the world primarily on economic issues.

   Early last century, globalization, with its spread of free market capitalism, was well underway. A pause occurred with the advent of the Depression and two World Wars and during the subsequent Cold War, with the tension between communism, socialism, and free market capitalism, globalization was kept in check.

   The failure of those alternative systems, ironically marked by events such as the fall of the Berlin Wall and the crumbling of the Soviet Union, signaled a wholesale opening of international markets.

   According to Friedman, three fundamental changes or democratizations enabled the dismantling of the cold war system and the subsequent flourishing of the free market economy: (1) the democratization of technology; (2) the democratization of finance and the resultant deregulation of the markets; and (3) the democratization of information. (12)

   The dynamic ongoing process of globalization involves:

   [T]he inexorable integration of markets, nation states and technologies to a degree never witnessed before--in a way that is enabling individuals, corporations and nation-states to reach around the world farther, faster, deeper and cheaper than ever before, (and in a way that is) ... producing a powerful backlash from those brutalized or left behind by this new system. (13) This brutalization is both economic and cultural. Perhaps the main thesis of this Article, the intertwined nature of culture, identity, and ethics, plays a larger role than is often acknowledged or understood in the resistance we see to the most obvious excesses of globalization. We need to explore the role that law and legal ethics play in both enhancing and constructing unseen barriers to the benefits of globalization.

   While globalization has the potential to deliver higher living standards around the world, that potential can only be achieved or experienced by societies with a significant level of social stability. The growing gap between rich and poor vitiates against such stability.

   Globalisation is like a river. It can bring substantial economic, social and environmental nourishment to those who are in a position to benefit from it. However it can erode, devastate and overwhelm if it rushes too fast or spreads too far. Globalisation can be so ruthlessly exploited by narrow interests that even its economic utility is destroyed. Restraint and guidance are often necessary to maximise its benefits and minimise its dangers. (14) II. GLOBALIZATION OF THE LAW AND ITS EFFECTS IN NON-WESTERN CULTURES

   From an economic standpoint, if countries are to attract capital and flourish in a globalized world, they must display political stability, efficiency, and transparency of operations. These attributes are to be gained through a legal system

   that...