Posted by Charles Feeny, director of Legal Futures Associate Complete Counsel
The Legal Services Act 2007 signalled the commencement of a period of radical change in the regulation and provision of legal services. It is not surprising, given the instinctive conservatism of most lawyers that, nearly a decade on, this inevitable transformation is perceived as still in its infancy.
The Legal Services Board recently commented: “Looking ahead, our view is that more progress needs to be made and the pace of change needs to increase. We need to continue to break down regulatory barriers to competition, innovation and growth, empower consumers and enable the need for legal services to be met more effectively.”
The board considers that in the long term, further legislative reform may be necessary to accelerate the process of change. Importantly, one must appreciate how radical the change required is to overcome what are highly entrenched working arrangements. Several features of our legal system prior to 2007 might be described as arcane, particularly the way in which the Bar has operated.
With hindsight, it seems remarkable that there was a rule underpinned by a perception that it would be unethical for a barrister to attend a solicitor’s office to meet a client. Barristers were perceived to be a class apart, operating from their own territory and through a clerk as an intermediary.
The culture of chambers further reflected an earlier age. The conventions go well beyond defining minimum standards of behaviour acceptable in most working environments. Rather, these conventions extend into manners defined by social class, exemplified by acceptable dress and forms of address, in particular between barristers and their clerks.
The justification for the maintenance of these traditions is that it reinforces the best traditions of the Bar in the form of independence, intellectual excellence and resolution.
However, the reality of this working environment is that it excludes many. The Bar remains stubbornly white, male and middle-class. The supposed justification is in reality a pretext for the maintenance of instinctive conservatism and class distinction. There can be no rational contradiction between a lack of independence or intellectual excellence and the wearing of a waistcoat with the bottom button done up.
The critics of deregulation emphasise the difficulty of maintaining standards where businesses are more fluid in their structure and operations. They suggest that the public will be poorly served by less qualified employees of alternative business structures (ABSs).
However, this ignores the fact that law firms already rely heavily on such individuals. Paralegals have become part and parcel of the provision of legal services. Although employees such as legal executives, court clerks or paralegals are subject to supervision, once they obtain a level of competence and experience, supervision often becomes nominal, as in many industries.
It cannot be seriously suggested that the proper use of such employees would dilute the quality of services provided by an ABS.
The provision of legal services through ABSs and similar providers will increase access to the legal profession. Those who are unable to obtain training contracts or pupillages will be granted an alternative route to legal employment. Whilst major firms and chambers do operate objective criteria, these tend to focus disproportionately on educational attainment. This creates an inevitable bias towards those who have traditionally joined such firms and chambers, since they have come from the social class with best access to educational provision.
Those who, as a result of less opportunity, have apparently achieved a lesser standard will be able to learn and develop through a practice at an ABS. Ultimately, they can rise to the same level as would be possible through a conventional route in a law firm or chambers. The small size of an ABS will mean that its employees are quickly exposed to clients and will be quick to learn on their feet.
The regulatory bodies believe that the process of change needs further stimulus, but it may be that they are being unnecessarily pessimistic. As with any process of transformation, there will likely be a tipping point at which the momentum for change will become dominant and those who resist change will have to bow to it. The legislative framework creates sufficient scope for business models, which through trial and error will ultimately achieve the best solution.
Against this background, the development of a Bar Standards Board (BSB) licensed entity (the formal name for an ABS), which is promised by 1 October, may be the catalyst for significant change at the Bar.
The BSB has indicated that such an entity would still be expected to offer what might be described as traditional barrister services, specifically advice or advocacy. Such an entity would enable barristers to employ paralegals (as many do already) but more importantly to offer a wider range of services through them and charge for that service.
Given the likely introduction of fixed fees in personal injury and clinical negligence litigation, such entities could be used to take over cases wholly for trial, ushering in the advent of the ‘trial lawyer’ in the English legal system.
The commercial and administrative structures of many law firms are not coordinated in a way that necessarily accommodates trials well. Trials are perceived as unpredictable and result in significant time away from the office. Such distraction from daily case management will be seen as increasingly unattractive in the context of fixed fees.
A licensed entity could offer to take over cases bound for trial, subject to agreement as to division of the fee. The licensed entity could then undertake activities ancillary to the trial process – for example, late proofing of a witness could be carried out through the use of a paralegal.
This arrangement could also work to the commercial advantage of the Bar in terms of the apportionment of a fixed fee. Law firms might perceive the ability to pass on a case for trial as commercially attractive, as it would enable them to concentrate on their core business i.e. cases that are fit for settlement. Few cases proceed to trial and the commercial dynamic here would suggest that the division of a fixed fee should reflect the reality that the cost would be earned at trial.
It might be argued that such an arrangement would deprive a client of continuity in their legal representation. However, given that cases are often passed around by fee-earners within a law firm and instructions routinely taken by telephone, such continuity is generally illusory.
A client would be sanguine about losing continuity if the consequence was that they got the best possible representation at trial. It is suggested that the BSB licensed entity will be in the position to provide the best representation, as those involved with preparing the case will then argue that case in court.
The BSB licensed entity therefore has the potential to create the British equivalent of American trial lawyers. This will hopefully create the most effective and economic form of trial representation. Further, it will have the potential to create career paths where one can progress from a paralegal role to a trial advocate.
This will increase access to the legal profession for those who are not initially seen as attractive in the current pupillage system.