Answer:
According to the breed standard of the American Kennel Club (AKC), a Lakeland Terrier's tail should be docked so that the tip is in level with the occiput when the dog is standing in a show position.
However, if you are not showing your dog, there is no reason why you should dock your Lakeland Terrier's tail. Docking causes great pain to the dog, and may also be illegal in some countries such as the UK.