Martin Partington: Spotlight on the Justice System

Keeping the English Legal System under review

Posts Tagged ‘legal services

The Future of the Legal profession – a view from the Law Society

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I argue in my book that change is the key to understanding what is currently happening to the English legal system, and within that the legal profession.

In January 2016 the Law Society published its own challenge to the legal profession, looking at current trends and how they may have developed by 2020.

The press release accompanying publication of The Future of Legal Services states:

Changes to legal services will have an inevitable impact on the solicitor profession. We have identified the key drivers for change in the current landscape of legal services, and attempted to predict how solicitors’ and lawyers’ interests may change in the future, where they will face competition and what opportunities may present themselves in a changing market.

This report presents findings drawn from a range of sources: a literature review, round table discussions and interviews with a range of practitioners across different practice types, firm visit reports, and the outcomes from a series of three futures panels.

The key drivers of change in the legal services market can be clustered into five groups:

  • global and national economic business environments
  • how clients buy legal services (including in-house lawyer buyers, as well as small and medium-sized businesses and the public)
  • technological and process innovation
  • new entrants and types of competition
  • wider political agendas around funding, regulation and the principles of access to justice

It seems inevitable that solicitors and lawyers face a future of change on a varied scale, depending on area of practice and client types. Business as usual is not an option for many, indeed for any, traditional legal service providers. Innovation in services and service delivery will become a key differentiating factor.

Two particular points stood out to me from an initial reading of what the Law Society has to say:

  1. They clearly take the view that the current model for the small ‘high-street’ practice has little future, particular as current practitioners retire. It is not a sustainable model for the future.
  2. The Law Society notes that 25% of practitioners now work as in-house counsel, so the amount of reliance of the corporate sector on firms of solicitors in private practice would seem to be reducing.

At the same time, the Law Society is convinced that imaginative and innovative lawyers will be able to develop new forms of legal service which will both offer them a living and provide a needed service to the public.

The report reinforces the view that students coming new to the study of law will have a lot to keep up with if they are to understand the professional world they may hope to enter in just 5 – 6 years’ time.

To see the report, go to http://www.lawsociety.org.uk/news/stories/future-of-legal-services/

Written by lwtmp

February 2, 2016 at 6:25 pm

Regulation of the Legal Profession: Competition and Markets Authority gets in on the act

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After the regulatory upheavals which led up to the Legal Services Act 2007 and the creation of the Legal Services Board, lawyers might have been forgiven for thinking that the regulatory playing field might be left untouched for a bit. But no. The Competition and Markets Authority announced in January 2016 that it was going to take a close look at competition in legal services provision by launching what is called a Market Study.

The Press release of the annoucement states:

The Competition and Markets Authority (CMA) will examine long-standing concerns about the affordability of legal services and standards of service. Concerns have also been raised about the complexity of the current regulatory framework.

In light of these concerns, the CMA’s market study plans to examine 3 key issues:

  • whether customers can drive effective competition by making informed purchasing decisions
  • whether customers are adequately protected from potential harm or can obtain satisfactory redress if legal services go wrong
  • how regulation and the regulatory framework impact on competition for the supply of legal services

The announcement also stated: According to recent surveys …  around one in ten users of legal services in England and Wales have said that the overall service and advice provided to them was poor value for money …, [and] amongst small businesses, only 13% said they viewed lawyers as cost-effective and around half agreed that they used legal service providers as a last resort to solve business problems.

The outcomes of a Market Study are very varied, and may range from a finding that all is well and that no further action need be taken, to a full scale investigation into the particular market.

The time line for the present study is that after a very short consultation (ending early Feb 2016) an interim report will be published in July 2016, with a final report at the end of the year.

For further information go to https://www.gov.uk/government/news/legal-services-study-launched-by-cma

This also provides links to some of the reports on which the case for launching the Market Study is based.

Written by lwtmp

January 24, 2016 at 12:00 pm

Increasing competition in the legal services market

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HM Treasury has just published (30 November 2015) a policy paper: A better deal: boosting competition to bring down bills for families and firms.

It notes that 40% of the average persons post-tax income is spent on buying essential services, including
Housing costs including mortgage repayments: £4,880
Energy £1,280
Clothing £1,180
Insurance £875
Telecoms £725
Water £385
Health products and services £325
Legal and Banking £35
Total £9,685

The policy paper sets out its aim of ensuring that there os more competition in all these markets to drive down costs to the indovidual and small business. This is also part of the drive for increased productivity.

Although only a small part of the total, the provision of legal services is not going to be immune from scrutiny. In a Consultation paper, to be published in Spripng 2016, ideas will be set  out on new business models, and independent regulators, for legal services.
The White Paper states:

2.10 According to a recent survey by YouGov, 62 per cent of adults have used a law firm or solicitor at some point in their lifetime and the cost of legal services is now considered the most important factor when searching for a legal representative. The government wants to ensure that innovative businesses are able to enter the market, providing greater choice for consumers. Alternative business models are around 15 percentage points more likely to introduce new legal
services than other types of regulated solicitors’ firms.
2.11 The government will launch a consultation by spring 2016 on removing barriers to entry for alternative business models in legal services, and on making legal service regulators independent from their representative bodies. This will create a fairer, more balanced regulatory regime for England and Wales that encourages competition, making it easier for businesses such as supermarkets and estate agents among others, to offer legal services like conveyancing, probate and litigation.

But that is not all. The policy paper promises other initiatives as well. These include:

Saving motorists money on their insurance policy
2.13 The government is determined to crack down on the fraud and claims culture. Whiplash claims cost the country £2 billion a year, an average of £90 per motor insurance policy, which is out of all proportion to any genuine injury suffered. As set out at the Spending Review and
Autumn Statement 2015, the government intends to introduce measures to end the right to cash compensation for minor whiplash injuries, and will consult on the details in the New Year. This will end the cycle in which responsible motorists pay higher premiums to cover false claims
by others. It will remove over £1 billion from the cost of providing motor insurance, and the government expects the insurance industry to pass an average saving of £40 to £50 per motor insurance policy on to consumers.

These changes are likely to have significant impact on those firms which specialise in providing legal services to the victims of road accidents.

Injecting innovation into the process of home buying
2.18 The government wants to inject innovation into the process of home buying, ensuring it is modernised and provides consumers with different – and potentially quicker, simpler and cheaper – ways to buy and sell a home. Encouraging new business models (for example, online only estate agents) is key to enhancing price competition in the real estate sector, but these have yet to penetrate the market.
2.19 In addition, emerging findings from government research suggest that consumers incur costs of around £270 million each year when their transactions fall through and they have already spent money on legal fees and surveys, and many more sales are subject to costly delays. Similar issues can affect businesses trying to buy or sell commercial property – the UK ranks 45th for registering property in the World Bank’s Doing Business index, and improving performance will help unlock additional economic growth.
2.20 The government wants to consider and address the way the real estate and conveyancing markets have developed around the existing regulatory frameworks, encourage greater innovation in the conveyancing sector and make the legal process more transparent and efficient. The government will therefore publish a call for evidence in the New Year on homebuying, exploring options to deliver better value and make the experience of buying a home more consumer-friendly.

The knock on implications for changes to conveyancing are also likely to impact significantly on law firms and conveyancers.

In addition, the Government has promised a further review of how the regulatory structure created by the Legal Services Act 2007 is operating, with a view to making it more efficient. Although nothing will happen immiediately, the legal profession faces considerable policy change which will require innovative and and imaginative reponses, which professionals need to start thinking about now.

The text of the paper is at https://www.gov.uk/government/publications/a-better-deal-boosting-competition-to-bring-down-bills-for-families-and-firms

Written by lwtmp

December 4, 2015 at 5:16 pm

Who is doing legal aid? The statistical evidence

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On 15 June 2015, I wrote a short note on the then recently published Annual Report of the Legal Aid Agency. I deplored the fact that, by comparison with its predecessor – the Legal Services Commission (whose Annual Reports not only reported on how the organisation was doing but also on the work undertaken by legal aid providers, the innovations it was seeking to introduce and the concerns it felt about the overall robustness of the scheme for delivering legal aid services), the Legal Aid Agency’s report was very narrowly focussed on corporate concerns.There was no information about the services being delivered to the public.

What information is provided is now contained in quarterly statistical reports, the most recent of which was published at the end of June 2015. These relate to the period January 2015-March 2015 (inclusive)

The headline findings were:

Criminal legal aid
1.The gradual decline of recent years in crime lower workloads has continued in the context of falling overall crime rates, and the latest quarter saw a 7% fall compared to the same period in the previous year.
2. Expenditure on crime lower has declined more than workloads, down 14% compared to the same period of the previous year.. This reflects the introduction in March 2014 of a reduction of 8.75% to the fees paid for most crime lower legal aid work.
3.In crime higher, the trend in new work entering the system has dipped in the last few quarters. The number of representation orders granted in the crown court in the last quarter was down 13% compared to the same period of 2014. Part of this reduction was due to fewer cases being in the criminal justice system.
Civil legal aid
1.The implementation of the LASPO Act in April 2013 resulted in large reductions in legal help workload and expenditure but trends have since levelled out at around one-third of pre-LASPO levels. In the last quarter new matter starts were 6% lower than in the same period of 2014
2.
Workloads in civil representation fell by a smaller proportion than legal help following the implementation of LASPO, and now appear to be stabilising at around two-thirds of pre-LASPO levels. The number of certificates granted in the last quarter was down 7% compared to the same period of the previous year.
3. After sharp falls following LASPO, the number of mediation assessments in the latest quarter was 19% up compared to the same period in 2014 and the number of starts was up by 33% over the same period.
Exceptional Case Funding
1.This quarter, the proportion of applications being granted was 18%, which is 8 percentage points lower than the previous quarter, but 11 percentage points higher than the same quarter of 2014.
The downward trends revealed here are the clear consequence of the cuts that the Government has made to the scope of the legal aid scheme.
Providers of legal aid
What this quarter’s statistical report also shows are annual figures relating to the numbers of providers of legal aid services.
These show that  in the three years from April 2012 to April 2015, there has been a significant fall in the number of provider offices for both crime and civil work. The fall has been greater for civil (down 20%) than for crime (down 11%) over this period. In the last year there was a 13% fall in civil providers and 4% reduction in crime providers.
Such figures would have led the former Legal Services Commission to ask itself whether there were enough providers in the system to provide a nationally based service, and it not what might be done to arrest the decline. Such sentiments are not aired by the Legal Aid Agency.
Indeed, it is possible for the Agency to argue that as there are still good numbers of providers applying for the various tenders for work that the Agency offers, there are still providers willing to do the work and that therefore there is no problem.
It is also possible to argue that, by comparison with most other countries, per capita spending on legal aid services remains relatively generous.
What is missing from this analysis, however, is any consideration of the age profile of legal aid providers. It may plausibly be hypothesised that many legal aid providers have been doing the work for many years, remain committed to it, and will continue to do it as long as they can. But if no or only very little new blood is coming into the legal aid sector of the legal profession, then the medium to long-term future of the sector must be in some doubt. Such doubts will be reinforced by the continued cutting of the legal aid budget – which are clearly irreversible in the foreseeable future.
I agree with Ruth Wayte, who in her podcast with me (January 2015), made the point that providing legal aid services was an interesting and very worthwhile thing to do, However, if the existing model of providing legal aid services through private practice law firms is not sustainable, perhaps these trends hide the need for a rather more profound policy debate about who should provide legal aid services. Should we be thinking about the development of other provider models?
The statistical report is at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/438013/legal-aid-statistics-bulletin-jan-to-mar-2015.pdf

Written by lwtmp

August 4, 2015 at 11:23 am

What has happened to Legal Aid?

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The big changes to the legal aid scheme, designed to cut public expenditure on legal aid, were introduced in April 2013, following enactment of LASPO 2012.
The first Annual Report of the Legal Aid Agency has now been published. This provides more information on the direct impact this has had on the amount of legally aided work that has been undertaken in the first 12 months since the Act came into effect.

In summary:

• Total acts of assistance and spend – The LAA continued to fund advice, assistance and representation for eligible individuals across England and Wales by funding 1.8 million acts of assistance overall (Civil Legal Aid and Criminal Legal Aid). [2012-13: 2.3 million]. Total net expenditure was £1,709.5 million. [2012-13: £1,916.7 million].
• Number of providers – As at 31 March 2014 the LAA held 1,435 civil and 1,519 crime contracts [March 2013:1,899 civil and 1,599 crime contracts].
• Civil Legal Aid – The LAA funded 0.50 million Civil Legal Aid acts of assistance overall [2012-13: 0.93 million, a 46% decrease in the year]. Civil Legal Aid net expenditure was £800.9 million [2012-13: £941.6 million].
• Criminal Legal Aid – The LAA funded 1.32 million Criminal Legal Aid acts of assistance [2012-13: 1.36 million, a 3% decrease in the year]. Criminal Legal Aid spend was £908.6 million [2012-13: £975.1 million].

What these figures show is the dramatic impact the cuts in Legal Aid have had on civil legally aided matters. There have been huge falls, both in the numbers of acts of assistance, and in the numbers of those with civil legal aid contracts with the Legal Aid Agency. By comparison, criminal legal aid has suffered less, though well publicised actions in particular by the Bar indicate that the fees payable for legally aided work in crime have been subject to considerable constraint.

Lawyers will of course deplore these trends. But it has to be said that there is no indication of any political will to restore funding to the legal aid scheme. This appears to be the start of a new reality, a context in which rather different forms of service delivery to the public will have to be devised.

The LAA Annual report is available at https://www.gov.uk/government/publications/legal-aid-agency-annual-report-and-accounts-2013-to-2014

Written by lwtmp

July 31, 2014 at 10:09 am

Co-operative Legal Services: Podcast with Christina Blacklaws

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Co-operative Legal Services was the first large organisation to be authorised by the Solicitors Regulatory Authority as an Alternative Business Structure. In this podcast, I talk to Christina Blacklaws, Head of Policy of Co-operative Legal Services.
She explains how the Co-op wanted to move into the legal services market by building on advice services they had for many year provided to their members. There is still a lot of emphasis on helping people to help themselves. But they wanted to be able to offer full legal services for members (and other members of the public) on issues that affect their daily lives, for example moving house, consumer matters, employment matters, family matters, housing matters, probate issues.
The new service is based in the fundamental values of the Cooperative movement.
3 hubs – in Manchester, Bristol and London – are supported by other staff in the Co-op – e.g. in their banks. They also work with other agencies, e.g. Shelter.
She argues that they key to their service is transparent pricing: each issue brought to the service is broken down into segments and clients pay for those segments of the service that they want.
She also argues that the structure of Co-operative Legal Services is an attractive environment for staff; there are opportunities for staff to develop legal skills to enable them to develop their full potential as lawyers.
To hear what Christina has to say go to http://fdslive.oup.com/www.oup.com/orc/resources/law/els/partington13_14/student/podcasts/Blacklaws.mp3

For more information about Co-op Legal Services go to http://www.co-operativelegalservices.co.uk/

Written by lwtmp

January 23, 2014 at 10:24 am

Provision of legal services – expanding the roles of Legal Executives

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Two decisions from the Legal Services Board (LSB), announced in December 2013, will – if approved by Government – have the effect of enabling legal executives to compete more fully in the legal services market.

The first decision approved at application from ILEX Professional Standards’ (IPS) applications to enable it to authorise members of the Chartered Institute of Legal Executives (CILEx) to practise independently in Probate and Conveyancing. This is likely to pave the way for CILEx members to practise independently in all areas of law. The decision goes to the Lord Chancellor, Chris Grayling, and for subsequent parliamentary approval, anticipated during the course of 2014.

See: http://www.cilex.org.uk/media/media_releases/lsb_approves_practice_rights.aspx

The second decision enables CILEX to regulate Chartered Legal Executives exercising litigation and related rights of audience independently, as well as new rules for regulating immigration advisers.

The ability for individual Chartered Legal Executives already working in a regulated entity to conduct litigation, exercise rights of audience and provide immigration services without supervision requires no further government approval. Thus IPS expects to begin accepting applications from CILEx Fellows in the Summer of 2014. This will benefit thousands of law firms who currently have unnecessary bureaucracies in place to sign-off on the work of experienced Chartered Legal Executives, including those working as fee-earners and partners.

IPS will be able to start authorising independent legal practices offering litigation and immigration services when Parliament has granted powers to set up a compensation fund and to intervene in practices. The LSB has confirmed it will approve IPS’s rules for establishing a compensation fund once Parliament has awarded the relevant powers. This is likely to be taken forward in 2015.

See http://www.cilex.org.uk/media/media_releases/lsb_approves_full_rights.aspx

Written by lwtmp

January 1, 2014 at 11:19 am

Provision of legal services: accountants getting in on the act!

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Competition in the legal services market will hot up even more in 2014, following the announcement that the Legal Services Board (LSB) has agreed that the Institute of Chartered Accountants in England and Wales (ICAEW) should be a regulator of probate services and also licensing authority for Alternative Business Structures (ABS), subject to approval from the Lord Chancellor.

This is an important step by the Legal Services Board in opening up the provision of legal services. In making this recommendation, the Legal Services Board has recognised that consumers can receive legal services relating to probate work from appropriately regulated ICAEW Chartered Accountants that are of equal quality to traditional legally qualified providers.

It has also recognised that ICAEW is a suitable body to licence ABSs which will facilitate the creation of new business structures between lawyers, accountants and other professionals (such as Independent Financial Advisors).

For initial information, see http://www.icaew.com/en/technical/legal-and-regulatory/legal-services-act/alternative-business-structures

Written by lwtmp

January 1, 2014 at 11:05 am

Legal aid – updating the book

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When I was preparing the last edition of the book, in October 2012, the full details of how the legal aid scheme would work once the Legal Aid Agency had started its work, were not available. As a result of the changes that are now fully effective there is a number of points in the book that are now out of date.

1 The Funding Code (see p 273), under which the former Legal Services Commission operated, has been abolished. The new Legal Aid Agency works under the regulations that have been made under the Legal Aid, Sentencing and Punishment of Offenders Act 2012. These include most importantly the Civil Legal Aid (Procedure) Regulations 2012/3098, see http://www.legislation.gov.uk/uksi/2012/3098/contents/made; and the Civil Legal Aid (Merits Criteria) Regulations 2013, see http://www.legislation.gov.uk/uksi/2013/104/contents/made.

2 The Lord Chancellor’s priorities (p 273) are repealed and do not apply to the Legal Aid Agency.

3 Similarly the statement of Objectives for the Legal Services Commission (p 275) has been abolished and does not apply to the Legal Aid Agency

Written by lwtmp

September 5, 2013 at 8:12 am