There is “notable cause for concern” over the long-term sustainability of the civil legal aid sector, research commissioned by the Ministry of Justice has concluded.
PA Consulting found that, if nothing changed within the next year, 42% of providers would exit or reduce the amount of legal aid work they did.
Four in 10 said they would quit the sector altogether in the next five years if civil legal aid continued as it was.
“It is clear from the qualitative responses that leaving the market is viewed as a last-resort option for many providers who are committed to the cause of the work but may not be able to continue due to financial viability,” researchers said.
PA Consulting is conducting an economic analysis of the market to inform the government’s review of civil legal aid, and part of it is this survey of providers – 228 of the 1,246 contracted providers (18%) responded.
It said: “The evidence paints a stark picture of the challenges experienced by civil legal aid providers and responses indicate that there is notable cause for concern over the long-term sustainability of the civil legal aid sector.
“If the sector continues to operate in its current state, provider responses suggested that more providers will continue to leave the civil legal aid market over the next five years or reduce their level of provision.”
“Smaller organisations, non-family contract holders and providers outside of London reported higher levels of risk.”
Most providers, especially not-for-profits, reported high levels of demand, with some having to turn clients away every week. Housing and debt, and immigration services, were those most in demand.
Six in 10 (59%) of those surveyed expressed dissatisfaction with the civil legal aid sector overall, with the fee system (82%), the ability to build a quality workforce (61%) and the way the Legal Aid Agency made decisions (59%) the main pain points.
The level and structure of fees were the “priority areas to be addressed”, compounded by difficulties with getting paid, while 60% said difficulties with recruiting junior lawyers was likely to prevent their continued provision of civil legal aid.
“This was reported to be exacerbated by concerns around established lawyers reaching retirement age and being unable to pass on their knowledge to the next generation of civil legal aid lawyers.”
A third of private practice providers, and half of not-for-profit organisations, said they had given up at least one legal aid contract, with 65% of law firms saying this was because it was no longer financially viable.
Most organisations (79%) said they continued to offer civil legal aid services primarily because they believed it was the right thing to do, followed by it being habitual (69%).
“Financial reasons are a prominent but secondary incentive,” PA said. “For instance, 37% said they offer civil legal aid because it is a reliable source of income.” For non-profits, there was strong reliance on trusts and charitable donations as the main source of revenue.
Over half (55%) of profit-making organisations reported that the legal aid categories they operated in were not profitable – 60% of them said they were actually loss-making.
“However, nearly half (45%) reported that it is comparable to other profitable work they deliver, suggesting there is a degree of disparity between participating organisations in their perceived levels of profitability. These results should be interpreted with caution given the different ways in which profitability may be measured by providers.”
Family was the area of the highest level of satisfaction and those reporting a profit – 54% of family contracts were said to be profitable (54%), compared with 31% of non-family contracts.
A final key theme was the additional time needed to manage service users: “Providers said that clients often required significant emotional support, which was then exacerbated when clients did not understand legal aid and its scope – and this additional time was not perceived to be accounted for within a fixed rate structure.”