If my memory serves me correctly there were some 3,000 barristers in England and Wales when I was called to the Bar in 1977. Now there are over 12,000 in independent private practice (see the Bar Council’s Annual Statistics for 2010). This four fold increase was financed largely by legal aid.
Public funding for civil litigation was reduced considerably by Schedule 2 to the Access to Justice Act 1999. Although few chancery or commercial practitioners and their clerks would admit it, the exclusion of legal aid for matters arising out of the carrying on of a business under paragraph 1 (h) of that Schedule had a devastating effect even on the practices of counsel who did very little publicly funded work. That was because it was the market trader flogging snide jeans or the chap who collected post-mix spirit boxes from pubs and cafés with a heavily discounted former council house to lose would force claimants to take their cases to trial. Nowadays such parties settle at an early stage if indeed they are not deterred from counterfeiting or piracy thus reducing considerably the volume of chancery and commercial litigation.
The Ministry of Justice’s Proposals for the Reform of Legal Aid in England and Wales (Consultation Paper CP12/10 Nov 2010) threaten to have a similar effect on the practices of criminal, family and general common lawyers. Clearly the Bar has to do something if it is to survive. That “something” was companies that could procure work for barristers (“procurecos”) by, for example, bidding for block contracts. Such companies were first suggested, I think, by fellow Mancunian Michael Redfern QC at a special brain storming session of the Bar Council in June 2009 which I attended by telephone. The problem with procurecos, however, was that they cannot actually provide legal services. It is not obvious to the average punter or indeed practitioner what they can do. Although one or two chambers including mine have set up such companies, they are not exactly taking the legal services market by storm.
In his paper on “The Future of the Bar”, Nicholas Green QC envisaged the evolution of procurecos into companies that could actually supply legal services (“supplycos”) (paragraphs 132 – 134). Such companies would have to be regulated to comply with the Legal Services Act 2007. Following the publication of Green’s paper the Bar Standards Board consulted the public and profession on “Regulating Entities” in September 2010. Apparently 75% of the respondents to that consultation considered that it was in the public interest for the Board to regulated entities. At its latest meeting, the Board decided in principle to regulate advocacy focussed alternative business structures, legal disciplinary practices and barrister only entities but not multi-disciplinary practices.
The details of the decision are not yet known but, according to the Board’s press release of the 28 April 2011, regulated entities will be allowed to conduct litigation as well as provide the same services as the self-employed bar. Although that looks like a giant leap forward at first blush, it may not amount to much in practice since BSB regulated entitles will not be permitted to hold client money and there will be a 25% limit on non-lawyer owners or managers of BSBs. Also, the concession applies only to litigation not advising or assisting clients in non-contentious matters which might limit the scope for specialists in tax or indeed my field of IP.
However, never look a gift horse in the mouth. There may be ways around those limitations. The bar needs to be more entrepreneurial and this is indeed a start.