President's Letter (October 2010)

I hope you enjoyed your summer break and that you have been energised to face up to the battles that face the profession in the weeks and months ahead.

I doubt very much that the legal profession will escape the Treasury’s cutbacks which will be announced in October. Not only will those affect the profession directly, but they will take out money from the economy that enables individuals, businesses and public sector bodies to purchase legal services. There is a strong possibility that they will bring another raft of redundancies in law firms up and down the country.

Firms that have been the beneficiaries of public sector work, whether under PFI projects, the building schools for the future projects or generally, are already seeing the disbanding of legal panels set up by local authorities.

We are also hearing of reports that the Ministry of Justice have submitted proposals to the Treasury for a 25% cut in the legal aid budget. We may be spending far more than other European countries on legal aid but we have prided ourselves as a country where citizens are not denied access to justice. Will the AA, Co-op and others who are chomping at the bit to compete for legal services, step into the breach and fill these gaps with their pro-bono clinics? Time will tell!

By the time you read this edition, the High Court will hopefully have ruled on the application by the Law Society for a Judicial Review of the LSC’s decision to reduce substantially the number of firms in England and Wales who will be allowed to undertake publicly funded family law work. I hope sincerely that the Court will agree that the LSC’s approach to the tendering process was no more than an attempt to reduce the number of providers they have to deal with. Excluding firms who have and continue to provide first class family law services to clients is, in effect, reducing the consumer’s choice and may lead to access to justice being denied to certain individuals.

Although the LSC are undertaking a review into the tendering process, it is feared that this is no more than ‘window dressing’ – so much so that the Law Society has withdrawn from that process. In the meantime, several local groups and individual firms throughout the country have commenced their own Judicial Review proceedings against the LSC – “powder to their guns” is all I say.

Surely the Legal Services Act was meant to improve access to justice by allowing new providers to compete on a level playing field with the profession. How can it possibly be in the interests of the consumer if Lloyds Banking Group is allowed to axe around 2,500 practices from their various lending panels? To allow a bank that remains propped up by the taxpayer to wield such a discriminatory policy is neither in the interests of economic recovery nor the consumer, let alone smaller solicitors’ practices – particularly those in rural communities.

So far, firms in and around Cardiff appear to have been able to cope with the effects of the banking crisis. We have not seen a Halliwells or Fox Hayes style collapse in South Wales. However, we should prepare ourselves as the banks are unlikely to continue to support practices which are not able to meet their strict lending criteria. Is this another means of softening up the profession in readiness for when the banks and others will be allowed to compete with the profession for legal work from October 2011 onwards?

As you read this letter, the PII renewal season will be over for another year. I hope that all of you will have been able to renew your existing policies or will have obtained suitable alternative cover. But at what cost?

Anecdotal evidence suggests that insurers are applying increases across the board of between 10% and 20% to last year’s premiums, regardless of whether there have been any material changes in the profile of your practice or that there is any evidence of an adverse claims history.

This lottery cannot be allowed to continue and the Law Society should now bring pressure on the SRA to introduce changes to the minimum terms imposed on insurers. We should be rid of this archaic and unnecessary arrangement where all practices renew their cover at the same time every year.

I understand that many recruitment consultants, to include our own Premier Legal Recruitment, are reporting an upturn in vacancies in both corporate and private client firms. If the recruitment pages in the Lawyer magazine are an indication, work is beginning to pick up as firms are yet again looking for additional solicitors and support staff. This will be particularly welcome news for debt laden students who are striving to gain entry into the profession as well as those newly qualified solicitors who are seeking their first job post-qualifying.

The future of the profession lies in the hands of young solicitors – we should not shut the door on them now as we strive to work our way through the continuing effects of the banking crisis and all the regulatory and competition changes that will change the profession beyond all recognition in the next five years or so.

Finally, and on a more personal note, I was saddened to hear of the death of Colin Jones. Colin was a contemporary of mine at UCW Aberystwyth. He was a very able advocate and will be sadly missed by his family, colleagues, friends and clients.

Peter Davies


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