MPs fear firms, chambers and law centres collapsing

Neill: Many lawyers struggling

MPs have expressed concern that law firms, chambers and law centres may collapse because of the impact of Covid-19.

They also called on the Ministry of Justice (MoJ) to set out how it will ensure Covid-19 does not disproportionately affect the incomes of Black, Asian and minority ethnic, or state-educated, legal professionals.

However, the justice select committee indicated that the profession’s pleas to extend business rate relief to law firms and chambers will go unheeded.

In its report on the impact of the pandemic on the legal profession – following one last week on the courts – the committee recounted how the reduction in legal activity during the pandemic has hit lawyers’ incomes.

While they have been able to use some of the general financial support schemes offered by the government – and there have been some changes to the way legal aid is paid – there were “gaps” in the support.

“Legally aided services, that were already under significant financial strain following many years of reductions to legal aid budgets, are under great pressure. We are concerned that as a result of coronavirus some barristers, solicitors, and law centres may collapse.”

With “pent-up demand” set to be unleashed once measures to control coronavirus are lifted, “it is imperative that the Ministry of Justice takes action to prevent the collapse of legal services providers”. The committee continued: “Without this there is a clear risk that those seeking legal advice and representation will find that it is not there when they need it.”

The government support to date “cannot compensate for the significant drop-off in the amount of work being done and remove the risk of a collapse in legal services providers”.

One problem for junior barristers has been the requirement to supply a 2018/19 tax return to access the self-employed income support scheme.

The committee recommend that the MoJ consider the Bar Council’s proposals for using alternative evidence – as well as help for self-employed practitioners whose profits are just above the scheme’s £50,000 threshold – and “that it report back to us on whether it decides to adopt the proposals and, if not, provide the reasons for that decision”.

It made a similar demand over the Law Society’s proposals for payment and repayment of monthly legal aid payments to law firms and not-for-profit providers, and further grants for law centres and other not-for-profit providers at risk of collapse.

In reporting back on the latter, the MPs said the MoJ should state what provision it would make for users of the centres that ceased operations

Lawyers have questioned why they have been excluded from business rate relief, and the committee reported Lord Chancellor Robert Buckland “suggested that his requests to the Treasury were unlikely to be fulfilled but that he was looking for other imaginative solutions”.

Again, the committee said the MoJ should look at how it could help legal services providers with their business rates, explain why if it did not.

The committee added: “It is important that the legal professions properly represent the society they serve, not least because they form a large part of the pool from which the Judiciary is drawn.

“The MoJ should set out what it will do to make sure that coronavirus restrictions on the justice system do not disproportionately affect the incomes of Black, Asian and minority ethnic or state-educated legal professionals, nor reduce their ability or desire to enter and work in the courts and tribunals system.”

Committee chair Sir Bob Neill said: “Let’s be honest about this. I know some people won’t have a lot of sympathy for lawyers who dress up in fancy gowns and speak a language of their own.

“People are under the misapprehension they are all on comfortable incomes. Some are, but very many, especially given their recent big drop in workload, are not.”

Mr Buckland said he was working “very hard, not just with the Treasury but internally, to see what more can be done to help the flow of regular income to the professions, particularly those at the sharp end of legal aid”.

Law Society president Simon Davis said: “In these challenging times, it is vital that the wheels of justice continue to turn. The government must heed the select committee and our calls on supporting legal aid firms through the crisis.

“To preserve access to justice and the rule of law, the government must also commit to uprating legal aid fees and updating the legal aid means test.”

Chris Bones, chair of the Chartered Institute of Legal Executives, said: “Forget ‘Suits’: for many, justice in the UK depends on professionals who often live hand to mouth and wait months to be paid by the government for doing a public service to ensure that those without means get the same chance as those with fat wallets.

“With so many still furloughed and now being made redundant, this need is greater than ever. The contents of this report should not be a surprise to the government [but] I hope that hearing it from the select committee will galvanise the Ministry of Justice to move from talking about support to actually providing it.”

Leave a Comment

By clicking Submit you consent to Legal Futures storing your personal data and confirm you have read our Privacy Policy and section 5 of our Terms & Conditions which deals with user-generated content. All comments will be moderated before posting.

Required fields are marked *
Email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.


Economic turbulence and the impact on law firm risk and protection

What does a slowing economy mean for various practice areas – from conveyancing and immigration to crime and family – and firms’ professional indemnity insurance prospects?

Time in context – understanding the time you have and how to accept it

For those who haven’t yet read Oliver Burkeman’s Four Thousand Weeks, you need to know this: it’s a time-management book like no other, already a classic.

Client money theft – how bad is the problem?

PII brokers’ raison d’être is to deal with complex and life-changing matters which threaten the existence of a law firm or its members’ future standard of living.

Loading animation