Are you shore …?

Yet more news emerges of large commercial law firms setting up “near-shoring” or flexible resourcing operations. The idea, presumably, is to be able to carry out lower value work at a lower cost, freeing up the more costly resources to do higher value work. By “more costly resources”, we’re probably talking associates (and possibly more junior partners).

It follows that these associates have over the years being doing lower value work than perhaps they ought to have done. More significantly, if these alternative models are successful in achieving their objectives then the result will be less work for them.

This tempts the question how will this work be replaced ? I’m sure the aim will be to win more higher value work, but as more and more firms adopt this model it will become the norm, not a differentiator. They can’t all increase their share of a finite market.

How then will firms adapt to this self-inflicted work redistribution conundrum ? Will they reduce hourly billing targets – and corresponding revenue – to more civilised levels ? Will we see pay cuts ? Or even redundancies ?

It seems unlikely that high value work will cascade down from partner level, unless the plan is to free partners to do more “rainmaking”. Of course, more and more firms are also increasing their specialist business development teams, doing the rainmaking at a much lower cost than partners.

I can see the law firm of the future being less top-heavy, with partners not being judged on rainmaking or hours billed, but on the ability to effectively and profitably select, deploy, manage and nurture teams of less experienced lawyers, while progressively building the firm for the future. I’d suggest this is a more healthy strategy for the individual, the firm and the effectiveness of the market.

As firms follow the crowd and join the queue to set up their “near-shoring” and flexible resourcing operations, you have to wonder whether they are really looking any further ahead than the firm in front of them ?

“New normal” or business as usual for the Bar ?

While the Bar is widely perceived as being a “traditional” profession, I am of the view that many overlook the fact that it has long been operating in a highly-demanding marketplace and is thus well-equipped to cope with the current “new normal” market conditions which the wider legal services market seems to be only just waking up to.

Here is the link to my article on the subject for LexisNexis Future of Law blog.

Public Access to the Bar – main event or sideshow ?

Recent headlines seem to suggest that the Bar is gearing up to “by-pass” solicitors and embark upon an all out war with them for business in these increasingly competitive times. This is on the back of figures published in a recent joint Bar Council and Bar Standards Board report, projecting that the number of barristers qualified to conduct Public Access work is set to rise from the current 20% to 50% by the end of 2015.

Public Access is therefore increasingly being talked about as a major opportunity for the Bar and threat to solicitors. But how informed is this debate ?  Is there a genuine market shift in play or is this merely paranoia-induced hype ?

What is “Public Access” ?

Put simply, Public Access means accepting instructions from a lay client, as opposed to a professional one. “Professional Client” is defined quite broadly in the Bar Handbook, but in reality it means solicitor in the vast majority of cases.  What being “instructed” by a solicitor actually means is surprisingly unclear in the Code of Conduct, but I think it is generally taken to mean receiving instructions, papers and/or information on the authority of a solicitor, whether or not the preparation is actually physically done by a paralegal, legal secretary or other person within the organisation instructing.

Relevance to the market

I think it is important to point out here what types of work barristers can already do without being authorised for Public Access.  Here, I think the waters have been muddied by the common reference to “direct access”, which has no prescribed definition.

First, barristers have always been able to accept instructions from large corporations or indeed any organisations that have their own in-house legal function (assuming it contains a qualified lawyer).  Some of the largest corporations (notably banks, insurers and utilities) and public bodies, with a regular requirement for litigation services have instructed the Bar directly (ie. without the involvement of a private practice solicitor) in large volumes for many years. And I mean many years – certainly dating back to the 1990s if not before. Public Access is therefore of no relevance to this significant segment of the market.

Secondly, since the International Practice Rules were introduced around 15 years ago barristers have been able to accept instructions directly from overseas lay clients (although this excludes litigation after the point of issue of proceedings, when a solicitor is required).

Thirdly, again for about 15 years, barristers have been able to accept instructions directly from members of various recognised professions, such as accountants, tax consultants, surveyors and architects.

All in all, this renders Public Access completely irrelevant to a significant part of the legal services market.  This does of course still leave the not insubstantial domestic consumer and SME markets, but it is important to set the context for any debate about threats or opportunities presented by Public Access by first recognising the restricted reach of its potential impact.

Authorisation for Public Access work

The position, particularly with regard to the perceived threat to solicitors, is put further into perspective when you consider what qualifying for Public Access actually entails.

Basically, it involves paying a fee in the region of £400 in return for a 1.5 day course.  For many barristers, this is a relatively small investment of time and money particularly when you consider that it also takes care of a full year’s worth of CPD points.  I’m not sure it requires a decision of any great magnitude to embark upon this and I believe that many barristers will not do so because of any great appetite for Public Access work, but rather they are happy to leave the door open for opportunities of special interest or those that may come at a convenient time, when business is otherwise quiet.  To use the ubiquitous taxi metaphor, it’s like turning the light on but leaving the taxi in the driveway.  (Having gone down this route, I should add that the controversial “Cab Rank Rule” does not apply to Public Access work).

Where I’d suggest the debate has got a little hysterical, is the widely reported perception that the increase in Public Access authorisations represents a wholesale strategic re-positioning of barristers’ business plans with a view to a major onslaught on solicitors’ territory. More likely, it is a sensible investment of relatively small amounts of time & money to put oneself in the frame, without obligation, for possible opportunities while meeting mandatory CPD requirements. Along the way, one might also learn a bit more about client engagement and gain a better understanding of some of the work of solicitors. In my view, “taking over the world” does not feature highly in the list of reasons to go down this route.

Appetite and capability 

There does however seem to be an increasing appetite at the Bar for Public Access work and the profile of this route to instructing a barrister has certainly been raised in recent times, not least through the proliferation of web-based marketing portals for barristers.

I’d suggest the vast amount of the buying market does not particularly want to buy “Public Access”. More likely, they have a legal problem, to which they need an effective solution at the right price. That best solution can of course in many cases lie in Public Access, where it is primarily advocacy that is required or specialist discrete advice is needed in scenarios where the legal problem can be clearly identified and “packaged”. There is also the overlap between the work that both barristers and solicitors can do where they tend to be equally-suited (eg. advice on tax or company law). Here, competition is surely a good thing.

Despite all this, I cannot help thinking that it all boils back done to the basic and obvious point that the Bar is all about advocacy. Advocacy is a specialist and demanding discipline, both in terms of training & skills required to do it well and also practice management revolving around tricky diary management of multiple practitioners often in scenarios where courts are increasingly less inclined to flex to accommodate advocates’ availability. Any successful advocate will tell you that preparation is paramount and that time allocated for this is pretty much “sacred” in the diary to the exclusion of almost everything else. Many solicitors will tell you it is the existence of practical constraints of this kind that is the reason why they seek services from the Bar, in addition to the small matter of simply not wanting to do advocacy work themselves.

While inevitably a generalisation I make no apology for stating my view that barristers are simply better advocates than solicitors. An obvious and uncontroversial conclusion, I would have thought; more so perhaps if I remove the labels and say that those with the desire, aptitude and training for specialist advocacy are better at it than those who have none of those things. You could turn this into a debate about “fusion” of the profession, but I would simply point to the US: there are those who are specialist trial advocates and those who are not.  It’s just that the divide is less visible and the labels are less distinct.

Challenges for the Bar

So yes, Public Access is a good thing for the consumer seeking advocacy services in cases which they are either competent to prepare themselves or need little preparation. I make that qualification, because often a client will not know how to prepare or conduct a case to trial or even know what facts & documents are relevant or, significantly, what they don’t know but should explore. Here we are in the territory of solicitors, for whom building, preparing and conducting a case is the day job. While this work is undoubtedly not beyond the capabilities of many barristers, it is not naturally an easy fit.  It dilutes the advocacy specialisation and their self-employed status makes this sort of activity impractical to service on a regular basis.  And no, generally speaking they are not as good at it as solicitors.  (Of course, the impending ABS regime for barristers may create opportunities here, but as with any opportunity it comes with risks.  A subject for another post …)

Other potential barriers to success in Public Access often cited are the inability to handle client funds or to deal effectively with lay clients.  The former issue is now no longer a hurdle at all thanks to BarCo’s escrow account facility.  As for the latter, I have no time whatsoever for this argument.  Solicitors who hide behind this for reassurance – who tend to be the same ones who hide behind anonymous comments on legal media websites – are frankly deluded.  The Bar has upped its game.  I will not explore here the merits of these points; they are put forward as opinions of this impartial observer who has plenty of experience working both sides of the proverbial fence.

The biggest hurdle

I am leaving until last what I feel is the area which will most challenge the growth of Public Access.  Marketing.  I think it is easy to overlook the length and precariousness of the journey of an instruction, from its embryo as a client’s realisation that they may have a legal problem, through to a brief in a barrister’s in-tray (or more likely, Inbox).

In this respect, barristers have the benefit of what is effectively an enormous marketing department, in the form of the 10,000 firms, with a presence every high street in every town, in the cities, spread across regional chains and of course online.  Collectively, they cover every demographic, practice area, consumer type and industry requirement.  Each firm expends to varying degrees time, effort and money on winning business, through a variety of promotional activities as well as the increasingly painstaking effort required to maintain those precious, hard-earned, sustainable long-term client relationships which tend to form the main source of most firms’ income.  Collectively, this creates something of a marketing Colossus that benefits the Bar hugely.  In comparison – and despite commendably increasing efforts – marketing impact and reach of the Bar is minuscule.  It is hard to imagine it will ever approach the scale of that of solicitors and much of the Bar will acknowledge that it will be reliant upon solicitors for the bulk of its business for the foreseeable future.

The marketing of the Bar in its own right is however dramatically improving, with chambers quite rightly aiming to build closer, more direct relationships with its non-professional client base.  Smart sets will be building these relationships to the extent that they are the first port of call for new work enquiries, giving them the option to act directly and/or recommend and bring in trusted solicitors’ firms when appropriate.  In this respect, the balance of power is shifting, which in my view can only be a good thing, as the increasing range of options for selecting a legal team makes the client the winner.

A symbiotic relationship

Of course, law firms will continue to win business from clients who have advocacy and/or specialist needs that they can’t themselves meet, for the reasons explored above. So solicitors will continue to need the Bar, as the Bar will continue to need solicitors. This may yet be challenged by the evolution of new business structures and so it should if this makes for more effective or better value service for clients.

In the meantime, call me old-fashioned but this all sounds to me rather like a recipe for a very well-functioning market.

So, let’s play nicely everyone.

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.