There may be fewer criminal law firms as a result of legal aid reform but not fewer solicitors, the Lord Chancellor claimed today.
Questioned for an hour and 40 minutes by the justice select committee, Chris Grayling also expressed his disappointment at what he said was the Bar’s failure to engage with the process.
Mr Grayling said his two priorities were a 17.5% fee cut and ensuring a sustainable structure, and emphasised that his decision this week  to accept a defendant’s choice of solicitor was an example of the government consulting and changing its approach as a result.
Lawyers had made it clear that choice was more important than guaranteed shares of work, as had been proposed, he said.
Mr Grayling said he had not simply cut fees by 17.5% because it was clear that some law firms would not be able to cope with that. “The whole objective of this is to have a managed transition.” He said the Law Society acknowledged the need  for consolidation of the market.
He said he did not care what size firms are so long as they are sustainable: “All I am seeking to is to encourage firms to look at new ways to work together or through alternative business structures (ABSs)… We are not looking to set one size fits all from the centre.”
The development of ABSs and multi-disciplinary practices would lead to a “more vibrant competitive marketplace and not dominated by half a dozen giant firms”.
He stressed he is not looking for bigger cuts, meaning that if a bidder “tips up with half a dozen law students” and says it can do the work for half the price, it would be rejected.
Mr Grayling explained that firms will not necessarily need to have merged or been licensed as ABSs by the time the bidding process begins, but will have to show that they are working on ensuring they have the capacity to do the work. It would be an “iterative” process.
He added that the Solicitors Regulation Authority had made it clear that the length of the ABS application process should not cause a problem. Legal Futures revealed recently  that the authority will consider fast-tracking such applications.
Asked about the impact on lawyers, he argued that “there are a lot of people who are struggling to get enough work to do. So my big concern here is not the availability of enough lawyers”. He said there was no reason why there would be fewer lawyers in criminal law, although they may well be working in different environments.
Countering the argument that his proposals will destroy quality of legal advice, Mr Grayling said it was why he had invited the professions to shape the quality standards. “The Law Society is now doing that with us and the Bar has said no. That does not compute to me.”
He added: “I want to know that where qualified lawyers are required, qualified lawyers are available.”
Mr Grayling said he was also puzzled by the opposition to the Quality Assurance Scheme for Advocates as it would block work being done by “unqualified people who are no good”.
The Lord Chancellor indicated that the timeframe for the new contracting framework – but not the cuts – might change, and that a four-to-six week consultation on the revised proposals is likely to be held in September.
He contrasted the Law Society’s engagement with the Ministry of Justice with the “disappointing” reaction of the Bar – and seemed hurt that the Bar had not recognised that by rejecting ‘one case, one fee’, he had avoided “destroying the independent Bar”.
He predicted that the new regime would be good news for the Bar because the financial structure will discourage law firms from employing advocates. “The tighter environment for solicitors in my view is likely to lead to more work, not less work, for the Bar,” he said. “This actually strengthens independent advocacy, not weakens it.”
Mr Grayling rejected the argument that the flat fee payable whether the defendant pleads guilty early or the case goes to trial will not lead to lawyers coercing people into pleading guilty. “I don’t believe those standards exist in the legal profession.”