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.

Taxi for the billable hour …

Much has been written recently (and not so recently) about the shortcomings of the law firm partnership model and in particular the hourly billing approach. I don’t intend to repeat too much of it here and indeed it would be a struggle to add anything of value to Law firm partnership – the Grand Delusion, a most informed and authoritative piece on the subject from Stephen Mayson.

It seems to be broadly accepted in the modern legal marketplace that the hourly billing model is under pressure from clients, commentators and new (and some old) legal practices. The general conclusion is that it drives the wrong behaviours within a firm by defining success in terms of hours billed in preference to value provided to clients. As Lord Neuberger MR (as he then was) summarised in his speech to the Association of Costs Lawyers’ Annual Conference 2012, it confuses cost with value.

But the real damage is done not necessarily by hourly billing in itself, but by the way in which it is too often applied: a misguided aim at the infamous “billing targets”, driven by the need to compensate for the inefficiency of the underlying financial model of the business. With this comes a failure to (or even attempt to) recognise the difference between the hour as a basic raw material and the billable hour as time spent productively in producing an output of value to the client.

For many years I have seen barristers’ fees charged on a time-spent basis. However, the difference in the chambers environment is that no-one is incentivised to spend or charge any more time on a case than is necessary. Quite the contrary, in fact. First, as sole practitioners, barristers tend to have a busy and varied workload and they simply need to get each job done as quickly as possible in order to be able to deal with the next, or risk missing an opportunity. (Of course, doing so without compromising quality is paramount and this balancing act is one of the key challenges facing the busy practitioner).

Secondly, billing is managed by clerks, who are in a unique position of knowledge and understanding about the levels of fees charged throughout the Bar as well as how much a particular piece of work ought to be worth, bearing in mind all the relevant factors. A clerk’s job is to ensure that however much time is spent, a barrister charges a fee which is both fair and proportionate. This kind of scrutiny ensures that even though time-based billing may underpin charging methods, the overriding incentive lies in offering value and thereby staying competitive.

I am not aware of any chambers or indeed any barristers who have hourly billing targets. I suspect this would be counterproductive, as those adopting this approach would stand out from the crowd as expensive and be rejected by the market, resulting in the rapid drying up of instructions. In fact, in most cases these days barristers have to work to fixed or capped fees based on what is acceptable to the market. It is important to add here that in the vast majority of cases “the market” to which I refer is of course made up of solicitors. The irony hardly needs mentioning.

The end result of the chambers approach is the evolution of an effective value-based billing process, even though the means of achieving it may not appear on the face of it to be terribly scientific. Most importantly, it results in proportionality and fairness to the client. It answers Lord Neuberger’s concern by keeping input cost out of the equation. It results in true value.

Of course, the market seems in any event to be moving overwhelmingly in favour of a fixed fee approach.  Indeed, a recent Legal Week Client Satisfaction Report showed that almost 70% of a large sample of corporate clients favoured fixed fees.  In this context it is no exaggeration to say that for a legal practice to be able to survive in (at best) the medium term it will need to be able to adapt rapidly to a fixed fee model.

As I have illustrated above, the Bar is very close to achieving this in its current approach, if not quite already there.  Not bad for a “traditional” profession.  I suspect more fundamental change will be needed by many law firm partnerships.  Any who think they can solve the problem simply by reverse engineering hourly rates will be exposed not only by the Bar, but also by more efficiently structured new market entrants.

The challenge couldn’t be clearer.

Psilkology

Like many who work in the legal business, I very much welcomed last week’s return of the BBC TV series Silk.

Unfortunately for me I wasn’t able to watch it “live” last Tuesday, as I was travelling, but I was able to observe the commentary on Twitter.  As I did so, I found myself somewhat disappointed to read of some of the apparently glaring failings of this new production.  All manner of procedural details and even one or two fundamentals were apparently amiss.  I could hardly bear to watch as, one by one, the legal tweets chipped away at the high esteem in which I held Silk.

I could barely bring myself, a few days later, to actually watch the episode on I-Player.  But I am glad I did.  Yes, of course there were plenty of factual inaccuracies and inconsistencies.  Plenty of drama and enjoyment too, as you would expect.  But what really did grab me was one particular scene which may have appeared innocuous but in fact was an excellent depiction of one of the key roles of the barristers’ clerk and one which I suspect may have been lost on anyone who has not held this position.  Certainly it didn’t seem to be picked up by anyone tweeting on the #silk hashtag.

It was a short scene but, credit where it is due, to my mind it merits attention as a brilliant illustration of the role of psychologist that comes as part of the unofficial job description for any clerk.  Displaying an instinctive sensitivity to Reader’s post-silk rejection disappointment, Billy announces ”your caseload just doubled” while handing him several briefs returned from Martha Costello QC.  But before Reader had time to stop, think and feel slightly patronised by what was effectively a display of pity, Billy passed over another brief, this time not a return but a direct instruction, to the words ”and here’s one of your own, sir”.  A classic distraction tactic, well known to any parent with young children, as they watch them toddle off delighted with a tennis ball, forgetting that it could have been the iPad …

To my mind, this was a masterful – and typical – display of ego management, the type of which forms an essential part of getting the best out of the sort of independent, driven but inherently insecure characters that generally make up the Bar.  In order to maintain an effective barrister-clerk relationship, this sort of sensitivity is needed constantly to maintain the precarious balance between demonstrating to the barrister how much they rely on the clerk, while not permitting this to cloud their belief that it is principally their own brilliance that drives their success.  In my view, this belief plays a large part in giving the Bar with its unique potency, so it is important that it is guarded with such skill when it could so easily be dismissed as pointless self-indulgence.

It is great to observe this sort of nuance being depicted – whether intentionally or not – to the far-reaching audience of Silk.  I am sure there will be plenty more to learn throughout the series.  I will be watching you, Billy …

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.