Cab Rank – whose rule is it anyway ?

The recent LSB-commissioned report on the Bar’s “Cab Rank Rule” seems to have sparked plenty of debate, including a seemingly hysterical reaction from the Chair of the Criminal Bar Association and, mercifully, some measured and informed responses from respected commentators Lucy Reed of St John’s Chambers and Professor Richard Moorhead of UCL.  The report effectively concludes that the cab rank rule is no longer effective or relevant in the modern legal marketplace.

Having worked in chambers for many years, I am not entirely surprised that members of the Bar take seriously any criticism of a principle that goes to the very heart of their core professional values: the need to ensure fair representation and access to justice for all, to support the principle of the rule of law and to protect and promote the public interest.

But let’s look at the context. The report was commissioned by the Legal Services Board, in line with their regulatory objectives.  These objectives can be found here but you needn’t bother clicking on the link, as they can also be found in my previous paragraph.  In other words, the LSB and the Bar seem to be completely aligned in their objectives.

You could ask about the reason behind the report and its timing. The LSB provides us the answers on their website under the helpful heading “Why this ? Why Now ?”  One of the stated reasons is to explore whether :

“… the cab rank rule could potentially both undermine its own aim to improve access to justice (by reducing opportunities for specialisation and so the provision of niche services) and also damage other regulatory objectives, such as to promote competition.”

While this is a clear indication that protection of the Bar’s competitive position is a consideration for the LSB, this reason seems to me to be fundamentally flawed. The cab rank rule explicitly only applies to a barrister accepting work “in any field in which he professes to practise” (para 602 of the Code of Conduct).  Barristers are clearly free to profess to practice in the area(s) of specialisation of their choice, so this particular concern is in my view misconceived.

The LSB’s reasoning gathers significantly more strength in its assessment of the effect of the exclusions to the cab rank rule (set out in paragraphs 603-607 of the Code of Conduct) as:

“perhaps recognising that its absolute status is less relevant in 2013″

and tellingly:

“The fact that so much legal aid work, where access to justice may be thought paramount, is exempt …”

You can now add to this exemption any work where instructing solicitors do not agree to the standard contractual terms recently prescribed by the Bar Council.  If the Law Society’s reaction is any guide, then this means the cab rank rule will be applicable to an ever decreasing amount of cases, for reasons of the Bar Council’s own making.

Moving on from theory to practice, in basic terms the cab rank rule exists to prevent a scenario such as one where a barrister refuses to accept a case on the grounds that he disagrees with the principles or beliefs of the potential client, whether personally or in the context of their case, thus denying them fair representation.  I can only speculate as to how many barristers, when faced with the prospect of a hopeless case, for a client they don’t like, for a solicitor offering no prospect of repeat business, for a small fee, in a distant court, when they are behind on their paperwork and have other, more attractive offers on the (clerk’s) table decide they are compelled to accept the brief purely because of the cab rank rule. I would suggest that this scenario is as common as, say, a taxi turning down a fare.  In any event, no harm would be done as another taxi, or barrister, would be waiting in line.

Looking from a different angle, let’s consider the rigour with which the cab rank rule is observed. The report rightly highlights the lack of any relevant data on this.  I don’t believe any is needed, as I am convinced that it has never, ever been breached.  This may sound surprising, but less so if you look in detail at the rule itself, particulary the broad and hugely subjective exceptions outlined in paragraphs 603-606 of the Code of Conduct.  It’s hard to avoid comparison with the well-know quote from the Life of Brian : “what have the Romans ever done for us ?”

The discretion afforded to any barrister in deciding whether to accept an instruction is so wide as to render the practical application of rule meaningless.  How can you possibly define a breach, much less prove one ? Issues such as availability, expertise and reasonable fees are very much in the eye of the beholder.

I agree entirely with the report’s summary :

“While it can be lauded as a professional principle enshrining virtuous values, as a rule it is redundant.”

It now lies with the LSB to consider the report in the context of its statutory objectives and taking on board the views of stakeholders.  Its ambit quite rightly encompasses the entire legal services market, not just the Bar.   It has invited responses from representative bodies, which I hope they will receive from the Law Society and CILEx as well as the Bar Council and specialist bar associations.

Whatever the outcome, no single branch of the profession has any claim to a monopoly on righteousness.

To conduct litigation or not to conduct litigation ….

…that is the question.  A rather important question for barristers’ chambers (and not just a smooth and catchy title).

A Bar Standards Board consultation has recently been opened on the new Bar Handbook (which is to replace the current Code of Conduct) and entity regulation.  As you would expect, it involves a detailed and wide-ranging review of all aspects of the Bar and there is much to consider.

The section that particularly caught my eye was the one providing for barristers to be permitted to “conduct litigation” (Part C of the consultation paper at page 29 - PDF).  This comes as no surprise to anyone, having been talked about for some time: Legal Futures reported in May 2010 that a Bar Standards Board survey had found that the majority of barristers wanted this capability.

This could well prove to be a fine illustration of the adage “be careful what you wish for”.  Back in those days (recent developments in the legal services market genuinely make 2010 feel like a different era) I suspect many, like myself, saw this as little more than a convenient step to enable, for example, London sets to help out provincial instructing solicitors by issuing or lodging the occasional pleading or application notice; or possibly firing off the odd letter to the other side.  Saving duplication and cost - what harm could there be in that ?

In the post-LSA era (by which I mean the climate that his existed since, not just because of, the LSA coming into force) the implications are far more wide-ranging.  Sets may be thinking seriously about the possibility of increasing market share and generating additional revenue streams through conducting litigation.  For some this may seem an obvious step in order to progress existing good relationships with key corporate clients, where there is mutual benefit in expanding the currently limited scope of service into a full offering at a very competitive cost.

Of course, it is easy to talk about competitive cost, when this is a benefit that is enabled by the low resource base of the typical chambers setup.  The question arises as to whether the low cost base can be maintained if the required resources to properly conduct litigation are assembled: the resources required to deal with correspondence (often urgently, with little regard for whether or not the relevant barrister is tied up in court) , to take full responsiblity for deadlines, procedural expertise to deal with formal steps in proceedings as well as the knowledge, understanding and personal skills required to deal directly with non-lawyer clients.  At the very least, we are talking about acquiring and/or training additional personnel (which might include solicitors), adopting new processes, additional compliance requirements, new IT infrastructure and probably a significant increase in insurance premiums.  It would also require a change in culture, with barristers being ready and able to step in to “somebody else’s case” as and when circumstances dictate (which they invariably do most unpredictably, as any solicitor knows).

Even if the chambers did possess the capability to adapt in this way, careful thought would need to be given to the extent to which any cost advantage may be eroded, as this is the key to the service being of relevance to the consumer.  Otherwise, why would they choose to take the risk of going anywhere other than their existing, trusted solution in the form of solicitors ?

So yes, this all looks a but complicated, disruptive and the sort of thing your usual conservative barrister is likely to shy away from.  But in the current climate of increased openness to change and (in some quarters) a genuine struggle to remain commercially viable this is not a step that can easily be discounted, particularly with the prospect of the enabling properties of external investment seemingly so readily available.

Of course, many sets will not be considering any such moves, content that they are doing just fine as they are and keen to carry on unaffected.  Ultimately however it will be beyond their control whether they are affected or not – for example, if a major competitor decided to take the step into litigation, suddenly offering clients the attractive proposition of a full range of services and in doing so creating strong, direct relationships with them and thus access to their stream of work.  A set would need to have the ability to act quickly and decisively as a group in order to respond.  It may need to be sufficiently (or at all) capitalised in order to be able to do so.  “It” would need to actually mean something – preferably a cohesive, like-minded group, rather than a bunch of individuals left over after the rest have jumped ship to the more attractive competitor.

It may be that some sets have already proactively considered these possibilities and decided to protect their position by focusing on their strengths of specialisation and cost-effectiveness, ensuring that they remain indispensable to their core clients by demonstrably valuing them more than ever, through strong relationships and excellent service thus providing a compelling proposition that renders other offerings irrelevant.  But this is unlikely to be achieved by simply carrying on as normal.  Financially pressured and increasingly sophisticated corporate clients will be looking closely at other options, so the challenge of remaining the most attractive one will surely be too great to meet by standing still.

It seems clear that, although seemingly benign at first glance, on closer examination that this part of the proposed new Bar Handbook is capable of causing wide-ranging and perhaps unintended consequences.  I have a feeling that the possibilities I have outlined may be regarded by some as a little radical.  In 2010 this may have been the case.  In 2012, the radical view is the one which expects the Bar to remain immune from such external factors and carry on unaffected, just as it always has done.

Riverview Law: Reinventing the wheel ?

This is a copy of my article for The Lawyer (21st Feb 2012) :-

Yet another new entrant to the legal services market emerges.  Again, a new and unique approach is announced, this time to bold claims of a “market disrupting” service delivery model.  Riverview Law is an ambitious new market entrant comprising a mix of solicitors and barristers backed by highly successful and established legal and business service providers.  It is immediately clear from its undoubtedly impressive website that it is promoting a strong brand and has gone to a lot of trouble to understand the needs of its target market.

Re-inventing the wheel ?

The Riverview business model is claimed to have been designed “starting from a blank piece of paper” and “from the customer up, not the law firm partner down”.   I don’t doubt for a moment that this approach has been faithfully and rigorously applied.  It is interesting then that the product of this design bears many similarities in operational terms to the setup of a barristers’ chambers, which I suspect has evolved rather differently.

Both models boast low overheads and flexible legal and support teams.  Enquiries from clients come in to a central customer services unit or clerks’ room.  In Riverview’s case, they are dealt with by “sales advisors” who I suspect perform a role similar to clerks, but with added legal knowledge so as to be able to understand the legal requirements of lay clients, before recommending a solution from their team of solicitors and barristers and identifying the appropriate costing option.

Bar Direct Access

One advantage is already clear.  The Bar has for some time talked a good game about direct access, however it is inherently unable to offer an unqualified service because of the restrictions on the type of work barristers can undertake.  This means that time and effort is required at the outset for investigation as to suitability of each case.  It also involves providing something of a selective service to the client who runs the risk of being told at any time that the barrister can no longer help and that a solicitor is needed.

This does not seem an attractive proposition for a client when compared to the Riverview model which not only enables the completely objective selection at the outset, but also has the flexibility to allow seamless and cost-free transition from one to another as required.  This offers the cost and expertise benefits of direct access, but without the risk.  Barristers are to operate on what seems to be the highest profile deployment yet of the “procureco” model, involving them in the business but at arm’s length thus enabling them to remain in independent practice at their existing chambers while avoiding additional potential for conflict.

Restricted choice ?

A possibly less advantageous aspect is the relatively limited choice of barristers.  I say ‘relatively’ because it has to be compared to the competition which takes the form of the wide choice available at the independent Bar, where it is increasingly common for practitioners to work to fixed budgets often under a not-dissimilar panel arrangement.  Furthermore, Riverview Chambers comprises 43 barristers of which around a third seem to be family law practitioners and only a very small proportion specialise in commercial work.  This constitution is something of an eye-opener in an organisation whose clear focus is on providing services to businesses.

This may be prove to be a shrewd way to barristers (and their chambers) to gain exposure a in this much-coveted area of the marketplace, in return for which Riverview gain their commitment to work at low fixed fees.  There is no reason to suggest that they will not be able do so effectively, but it remains to be seen whether this finds favour with a commercial market populated with clients of ever-increasing sophistication.

The key differentiator ?

Perhaps the feature of Riverview that it sees as its key brand differentiator is its ability to offer bespoke, fixed-price solutions including a fixed monthly spend option.  Working for fixed fees is nothing new to solicitors or barristers, but with this comes the freedom to decline to act on this basis in cases where the amount of work involved is unpredictable.  Riverview is unlikely to have the luxury of this choice.  Having put fixed fees unequivocally at the forefront of its brand, its differentiator will be lost if this approach is not applied consistently.  This means regularly running the risk of operating unprofitably unless this risk can be robustly mitigated.  If it can achieve this then it will certainly give it an edge in the market and it seems confident that it can do so with the application of sophisticated technology.

So is Riverview going to cause the claimed market disruption ? Nobody can doubt that it is an interesting arrival on the legal services scene.  Although it offers no individual facet that is completely ground-breaking, it has raised the profile of the shortcomings customers encounter with existing providers and represents a commendable attempt to harness and apply consistently the best of current good practice.

If it delivers as it promises it will surely prompt many in the business to up their game, bringing about further increases in the quality, value and accessibility of legal services. This can only be good news for the consumer and the health of the legal industry.

Bar overplays independence card

This is a copy of my recent article for Legal Cheek, a legal news and comment website full of lively, provocative and informative material.  And this too …

On Monday the listed Australian law firm Slater & Gordon kicked off the Legal Services Act (LSA) era in earnest when it announced its market-wowing £54m acquisition of Russell Jones & Walker. Amid all the excitement about who could be next, it’s easy to forget that it’s not just law firms considering the potential threats and opportunities arising from the fast evolving landscape, but also barristers’ chambers.

Not that barristers chambers are exactly in the hot seat when it comes to LSA-led change. Being predominantly a referral-driven business, chambers tend to adopt a “wait and see” approach based on any changing requirements arising from what the referring law firms are doing. Of course, there’s risk in this approach as it relies on sets being sufficiently agile to adapt rapidly when required.

Chambers’ ability to move fast is far from a foregone conclusion – in no small part because the set-up of barristers’ chambers is unlike most other commercial organisations. Steeped so deeply in tradition and moulded around the expectations of the barristers within it, the chambers structure is inherently ill-suited to change, particularly of the swift and radical variety.

Among the characteristics we often hear cited as the Bar’s key strengths are the fierce independence and individuality of its members: independent thinkers working in their own individual ways to unlock that genius, providing uniquely innovative ways of dealing with the difficult challenges presented by advocacy and specialist legal practice. This is what sets the profession apart, we are told, in enabling the breathtakingly high standards of intellectual ability to come to the fore to the benefit of clients and, ultimately, justice.

While I have no doubt that there is some truth in this, I cannot help thinking that the independence card is rather over-played. Of course it helps to provide high professional standards for each practitioner to be able to work in ways that they feel are optimised for their individual needs; like a writer might prefer to sit in front of their favourite view in order to be inspired, or an artist perhaps painting to music of the appropriate mood.

In this respect, individuality is undoubtedly a strength. But it can also be a critical weakness in a climate where one of the emerging challenges will inevitably be the ability of the organisation to adapt quickly and seamlessly to meet demands from the market to provide uniformity in quality and methods of service.

Here, individuality and independence can really hold a business back – especially if they are applied gratuitously. For example, does a barrister’s individuality really need to prevent them from giving a prompt response to an enquiry about availability, the timing of a piece of work or a simple, unqualified answer to a request for a fixed fee quote? Is it really independence that precludes the prompt provision of billing details in a form that fits in with the organisation’s and client’s requirements?

It is too convenient to accept that a hugely variable standard in provision of such essentials is inevitable, given the characteristics of barristers. The legal market seems to roll with it; I wonder, though, how many other industries would be so forgiving, especially with the effort required to conform to some basic organisational principles pretty minimal?

The tendency towards the individual approach is compounded by the structure of chambers and the resulting organisational culture. A set of chambers is a simple business structure consisting of a group of self-employed barristers billing and receiving payment for their own fees on an individual basis. From their receipts they pay a contribution – typically around 15% – towards shared “chambers expenses”, covering normal business overheads such as rent, staff, marketing and IT.

But is it really right to describe these as expenses in the conventional sense of the word? There is no doubt that, in terms of mechanics, each member does indeed part with a sum of money (usually by way of monthly direct debit) in return for a service. Thus from their point of view, there is a sense of paying a fee for a service – and with that comes the resulting entitlement to their “pound of flesh” (which is understandable: as fee paying customers, why should they not be entitled to expect service in a form that is tailored to their personal preferences?).

But this approach doesn’t sit quite right in the context of commercial organisations. In reality, barristers clerks and chambers administration staff don’t provide personalised services in the same way as you would expect from, say, a hairdresser (where you might specify what style you would like) or perhaps a taxi driver (to whom you might express a preferred route or ask for the heating to be turned up). There are two crucial differences. First, in the chambers scenario, barristers are paying for a shared service that comes from restricted resources that need to be used prudently and fairly in order for the system to function. Secondly and more importantly, chambers provides an enabling service; an essential service without which barristers would be unlikely to be in business at all.

Accordingly, I suggest that a more realistic way of looking at the situation would be for barristers to consider themselves part of an organisation where they are paid 85% commission on their sales. That’s a pretty good deal in most businesses. Putting the payment process to one side, this concept better reflects commercial reality. It also demonstrates recognition of the value of being part of the organisation and serves to promote a mindset of strong commitment to the group and a degree of conformity with its way of doing business, with the ultimate goal of providing services to clients in the most effective and competitive manner.

Many law firms are currently having to face up to some difficult threats to their market share, profitability and ultimately survival. Radical changes in strategy and operations are being considered. In contrast, a minor cultural shift and a little administrative effort may well be all that is needed for the Bar to keep pace comfortably with the demands of the marketplace. There is no reason why the Bar’s treasured traits of independence and individuality should not continue to be potent attacking forces, but unless applied thoughtfully they could contribute to the scoring of a decisive own goal.

The Legal Services Act – what now for Chambers ?

My article in the Sept 2011 edition of Clerksroom Magazine, a free monthly publication for clerks and managers in barristers’ chambers:

You’d have had to be on some pretty faraway planet not to have heard of the Legal Services Act 2007 (“LSA”) and its anticipated impact on the legal marketplace.  “Tesco Law”, “deregulation”, “Big Bang” are just some of the (rather misleading) descriptions you will have been unable to avoid in various media.

Alongside this, we have seen news of a variety of interesting developments in the legal services market.  The prime example is Quality Solicitors – a national network of solicitors’ firms, effectively operating as franchises under the QS brand.  It has been heavily advertised (including a TV advert featuring Amanda Holden) and is in the process of setting up “Legal Access Points” at counters in around 1000 branches of WH Smith, where they offer free first consultations.  Its stated focus is centred on providing easy access to lawyers for the public and high standards of customer service.
We are also seeing signs of expansion and consolidation in the marketplace.  A good example is Parabis, a group that has rapidly evolved into a £100 million business through the acquisition of solicitors firms and non-legal insurance related enterprises.  Parabis have stated their intention to convert to an alternative business structure, as have several other high profile firms which have cited external investment for growth as the driving force.  And of course there is the prospect of Co-Op and other retailers (not Tesco, so far) entering the market.
In the context of the history of the legal marketplace these are undoubtedly extreme innovations, however it is important to point out that they are not in any way dependent on the LSA (the relevant provisions of which are yet to take effect).  They have developed within the existing regulatory framework.  Businesses are pushing the boundaries of existing ways of providing legal services, even before the doors are open to alternative structures and non-lawyer ownership.
So, increased customer focus, market consolidation and external ownership: what has all this got to do with running a barristers’ chambers ?  After all, barristers just want to be barristers, not entrepreneurs.  They want to get on with the business of being independent specialist legal practitioners.  More barristers aspire to being Sumption QC than Lord Sugar and I doubt we will be seeing many appearing on Dragon’s Den.  For that reason (if you’ll forgive me …) it is hard to see barristers chambers taking such large leaps to come up with new innovative business structures.  And why should they ? The tried and tested virtues of quality, specialisation and value have proven to be effective even by the most modern commercial standards.
But what the Bar will have less control over is the huge potential for change in the dynamic of the market in which we are operating.
Consider then the conversations I’m sure many of us have had with solicitors about that “demanding client”, where they apologetically ask for that little bit extra – more work, within a shorter timeframe and for less money – on the grounds that the client is “a big corporate” throwing its weight about.  (You may, like me, have found these conversations more frequent of late).  Now consider what business might be like when this type of client literally becomes the instructing firm, by way of ownership a substantial financial stake or indeed its entirety.  Demands like this might then become the norm instead of the exception, requiring the Bar to up its game in terms of cost and service in order to compete for the large volume of work that these firms will have access to.
We have become used to dictating our terms of service, taking for granted the ability to charge brief fees, booking fees, refreshers and open-ended hourly rates, as well as relying on solicitors to accept liability for payment.  We could see a market where this new breed of instructing firm has little time for what we regard as traditionally accepted practices and chooses to leverage its increased buying power to challenge terms of this sort.  Many of us already see this approach to some extent from providers of bulk work, such as insurers and public bodies.  It looks set to become more widespread.
Similarly, those instructing might simply be looking for a set of chambers to service their needs in a variety of practice areas at a fixed cost and with a uniform level of service.  I suspect they would not be particularly interested in the friction this might cause to our internal management procedures.  There would inevitably be winners and losers in chambers as to who gets the “better” work (and therefore the better fees) and this would be likely to test the cohesion of the chambers structure.
It is fair to say that the Bar has been very successful over the past decade in responding to the increasing challenges of modern practice.  With the emerging potential for much more radical change and at a much faster pace, its ability to evolve is likely to be tested yet further.  The strengths of quality, specialisation and value will continue to be key but this will need to be combined with more astute management than ever.
As we all know, it is one of the main roles of the barristers’ clerk to reconcile the demands of clients with the expectations of barristers.  It looks as though our jobs could be about to get a whole lot harder.