27 April 2010
Barristers set to go head-to-head with solicitors for work with new corporate vehicle
Who's the boss: will solicitors instruct barristers in future, or the other way round?
Barristers were yesterday given the tools to bolt a corporate vehicle onto their chambers which can bid for work, instruct solicitors and also bring clerks and others into ownership roles.
The Bar Council’s new business model, dubbed ProcureCo, raises the possibility of barristers competing with solicitors for work. It aims to give sets of chambers increased flexibility in bidding for work in new and existing areas of practice and in areas where they face increased competition.
In a letter to members, Bar Council chairman Nicholas Green QC said ProcureCo “will increase the ability of chambers to market themselves to new and existing clients by creating cohesion and uniformity of approach to clients”.
He explained: “They will give the bar the ability to bring together a range of skills so that a comprehensive legal service can be provided to clients. For example, a ProcureCo might win a contract for work with a block purchaser which requires the skills of a solicitor in conjunction with those of the barrister. The ProcureCo will call upon the barristers in the connected chambers for part of the work and might instruct solicitors on a ProcureCo panel for the solicitors’ services.”
Mr Green said chambers are considering setting up, or have already set up, ProcureCos for a diverse range of work including international matters, City advisory work, ADR and mediation, arbitration and local authority instructions. He added that the Bar Council is also in discussions with the Legal Services Commission about the use of different models for direct contracting between the bar and commission.
Mr Green said the model will not always be necessary for a chambers that wishes to contract with a purchase, such as a local authority. For clients who continue to instruct on a case-by-case basis, the ProcureCo might simply replicate what the present clerks’ room already does, he said, even though limited experience to date suggests it may still be useful. However, “where a local authority or other block contractor wishes to outsource large volumes of work, then, for the bar to be able to take on the work, a more sophisticated (and therefore necessarily more complex) model is needed. It is at this point that the new model may be very effective”.
From a regulatory point of view, ProcureCo cannot provide reserved legal services itself, meaning it must procure the services. The Bar Council suggests that it should be a company limited by guarantee – so as to minimise the risk of conflicts arising by members of chambers holding shares – but it said the company could be limited by shares.
Ownership of ProcureCo is “essentially a commercial matter for each chambers”. One model could be that chambers as a whole owns the ProcureCo and a committee of chambers becomes its board. Alternatively, members of staff – such as clerks and practice managers – could be part-owners “and in any event may very well play an important role in the management of the company, whether on the board or otherwise”.
In theory ProcureCo need not be owned or controlled by any members of chambers, the Bar Council admitted. “However, from a regulatory perspective, it is desirable that those who control ProcureCo are subject to the code of conduct and from a commercial perspective it is desirable that members of chambers retain control.”
The Bar Council has made available on its website guidance notes and model documents, drafted by London law firm Field Fisher Waterhouse, to help barristers set up ProcureCos.
Following the launch of the model, Mr Green said: “I am aware from numerous conversations with members of the bar and with clerks and practice managers that the bar needs greater flexibility in what is a rapidly changing market place. I am confident that the bar will take the model terms and modify and develop them to suit their particular needs. I have been encouraged by the fact that individual sets of chambers are already setting up ProcureCo-type vehicles designed to give chambers new opportunities.”
He also revealed that he has asked circuit leaders to organise local discussion forums so that debate about new business models and related issues can continue and experience be shared.
By Legal Futures
Tags: Alternative business structures, Bar Council, Barristers
Leave a comment