The Lord Chancellor has given his strongest hint yet that the government is preparing for a major overhaul of the regulatory regime for lawyers.
Answering questions from MPs on the justice select committee today – focused on his legal aid reforms – Chris Grayling also noted that there is no shortage of law firms in England and Wales.
Mr Grayling said the Ministry of Justice had received a great deal of evidence about legal services regulation following the recent call for evidence. “I think we could do quite a lot and intend to do quite a lot on deregulation, again to ease the cost burdens on different parts of the legal profession,” he said.
He also reiterated his hope that firms will adopt new business structures to meet the challenges of the legal aid reforms. Dealing with concerns about the impact on rural areas, he said: “I expect we will see quite a lot of innovation in the way those firms operate. We may see firms coming together, we may see partnerships across professional services – it’s not for me to judge.”
He dismissed worries about advice deserts, saying: “One thing that hasn’t been suggested to me is there are not enough law firms around. I think the question is about sustainability. One of the benefits of giving them that extra six months [as part of the revised reforms]… is that it gives them more time to adapt to the way they will operate in the new world, to come together in consortia…
“I should say that in rural areas we are not ruling out contracts being held by consortia of firms – three or four firms coming together to bid for a contract.”
But he emphasised that “what I can’t do for either side of the profession is escape the overall financial envelopes. I’ve tried very hard to find areas of easing the pressure, ways to ease the pain, but I can’t take it away I’m afraid”.
Similarly, there was no prospect of any further delays to the fee cuts. He had met with local law societies and groups of local lawyers in colleagues’ constituencies, he said. “One of the messages I got was ‘please don’t compete on price, please just cut our fees and give us a bit more time’.” The government had therefore extended the contracting period until summer 2015 and delayed the full implementation of fee reductions until summer 2015.
He added: “What I don’t have the flexibility to do financially is to delay it all until the summer of 2015 because then we end up with a major problem in the 2015-16 financial year.” This effectively struck out one of the Law Society’s most recent proposals, which was to eliminate the first, staged, fee cut in 2014 and delay the whole cuts package until 2015.