Are LLPs going strong or not? Is it now firmly established that they are a ‘good thing’? The main reasons for not converting have not changed. There are doubts in the minds of partners in some law firms that public exposure to their accounts creates a number of problems which have nothing to do with accounting treatments. Equally, the advantages so often expressed for LLP status, for example in respect of tendering and partners’ liability, send out a commercial message about being ‘up to date’, quite apart from the accounting advantages of conversion. Other issues which seem to occupy the minds partners include: Statistics confirm only a gradual move toward LLP status. Why hasn’t the vehicle been seized more enthusiastically? What is it that makes firms take the plunge? Surely it can’t be lethargy holding people back, can it? Any insight into readers’ experiences would be most welcome. Clients (and the firm’s competitors) may not have realised how small the firm is and will therefore take their business elsewhere; The bank may ask for a debenture as security to replace personal liability as a partner, therefore making the transfer pointless.
Are you using text messaging to communicate with your clients? Most of us carry mobiles, so your text reaches your client instantly when there is something significant to report. In many cases, this can be more effective than phoning, when your client might not be available and neither are you when they call back. You don’t have to break your concentration when the call is returned.Even if you send your client an email, they might not receive it until returning home in the evening and might have benefited from receiving the news during the working day. I like receiving a text to confirm my train reservation, or reminding me that my car is booked in for service tomorrow, so I would appreciate similar courtesies from my solicitor. This doesn’t have to wear your thumbs out all day. Case management workflows can cause automated emails to be created at key moments, such as exchange of contracts or completion, and these emails can be converted to text messages by a third-party carrier. The lawyer does not have to do anything, yet the client is informed of the great event almost at the very moment it happens. The message does not replace email or other confirmation, but is an added extra. Text message carrying is relatively cheap and yet creates a great impression on the client receiving the message. You will go up in your clients’ estimation in terms of client service and your reputation will be enhanced.
There is, it seems, no letup for criminal practitioners, with the MoJ’s announcement of further fee reductions last week.The proposals will see cuts for police station representation and Crown court work, which – says the MoJ – are designed to rebalance the budget in favour of civil help. Though obviously unwelcome news for practitioners, the cuts come as no real surprise. In April this year, when the Legal Services Commission launched its second consultation on best value tendering for police and magistrates’ court work, the documents contained a not very thinly veiled threat that if the profession didn’t play ball with the introduction of BVT, there would be cuts in face-to-face advice at the police station. The profession has not let up in its opposition to BVT. Faced with almost universal criticism of the plans and the tight implementation timetable, the government was forced to announce a three-year delay in the national rollout. So now it’s payback time. If the intention is to cut costs, then surely the Crown court is the right place to do this. Frequently cited statistics show that Crown and higher court cases take up one third of the £2.1bn legal aid budget, and very high cost cases, which account for 1% of trials, take up 50%. Many would also say the plan to cut the fees paid to expert witnesses is long overdue. But where is the logic in cutting fees for police station advice or limiting the availability of representation? The MoJ asserts that the duty solicitor scheme has been overused in some parts of the country. What it means by this is unclear – surely the use of the scheme is dependent on how many people the police arrest, not the business plans of criminal solicitors? Skimping on advice at police stations seems a short-sighted way of attempting to cut costs. While it may reduce the cost of advice at one stage, there is huge potential for it to increase costs as a case progresses through the criminal justice system if mistakes are made in the police station.
DownloadsDownload the data page for August 2009 below The data page is the financial rates and data complied for the Law Society Gazette by MoneyFacts Group, the UK’s largest supplier of savings and mortgage data. data page 20 August 2009 (240kb)
Complaints against employment solicitors have risen by almost a third in the past year, while personal injury lawyers saw a 15% rise, the Gazette has learned. However, complaints against conveyancing solicitors fell by nearly a fifth, to 1,184. The latest figures, obtained from the Legal Complaints Service, show that the overall number of complaints from the public is slightly lower than at this time last year, at 6,166 compared to 6,234. LCS caseworker Tim Miller said the complaints figures were largely related to changes in the volume of work overall. The growth in employment complaints, which still form only a small percentage of the total number with 231 complaints, is likely to be linked to a strong increase in employment work during the recession. Miller said a ‘big drop-off in conveyancing transactions’ was behind the dip in conveyancing complaints. However, he warned that more complaints could be generated by law firms closing down partway though a transaction, or if remortgages and repossessions sparked issues relating to previous conveyances. Personal injury complaints rose 15% from 1,077 in August last year to 1,242 in 2009, while the overall number of PI cases dealt with by solicitors grew by 11%, according to the Association of Personal Injury Lawyers. Miller added that solicitors had responded well in adapting to their clients’ needs during the recession.
Persuading more solicitors to apply for judicial posts is ‘absolutely key’ to increasing diversity in the judiciary, the chairwoman of the Advisory Panel on Judicial Diversity told the Gazette this week, as the panel published a raft of recommendations aimed at improving diversity on the bench. Baroness Neuberger said law firms should regard it as their ‘public duty’ to encourage their lawyers to take up part-time judicial work, in the same way that they undertake pro bono work. Five leading City firms which formed a working group to inform the review also pledged to lead the way in ensuring greater participation on the bench from City solicitors. Magic circle firms Linklaters, Clifford Chance, Allen & Overy, Freshfields Bruckhaus Deringer and City firm Herbert Smith called for a change in ‘present custom’ so that ‘solicitors in their 40s’ should be encouraged by firms to take on a fee-paid recorder role, rather than firms regarding this as a ‘quick way out of serious work’. The firms agreed to take the lead on the issue and set up a monitoring group to assess what progress they have made. Neuberger’s report makes 53 recommendations to increase diversity. These include ensuring that flexible working is offered much more widely to attract the ‘large numbers of talented women who are lost to the profession when they have a family’. Further proposals include revising the Judicial Appointments Commission’s criteria for assessing merit to include a reference to diversity; simplifying the payment regime for solicitor fee-paid judges to remove tax complications; turning the Judicial Studies Board into a college which would provide courses to support applicants, including those who have had a career break; and encouraging lawyers in the public sector to apply for fee-paid roles in jurisdictions where a conflict is unlikely to arise. Neuberger, who was commissioned by justice secretary Jack Straw to write the 110-page report and sought the views of around 180 people, told the Gazette there needed to be a ‘change of heart’ among law firms in the way they view judicial appointments. She added: ‘The City firms all do pro bono work, and this should be part of it. It also looks very good for law firms to have a judge coming from that firm.’ Neuberger added that she is confident the proposals will be implemented.
Beset by problems such as delays in providing registration log-ins, several insurers not being registered on the system and countless technical hitches involving the online portal, many have described the new streamlined low value road traffic claims process as a shambles. With the Ministry of Justice introducing the new electronic claims procedure on 30 April 2010, and operational information on the electronic portal not being accessible until February 2010, there was little time for preparation and implementation. The resulting IT chaos therefore came as no real surprise, and the procedure was anything but ‘streamlined’ at the start. The electronic portal is designed as a high-volume operation and it is anticipated that approximately 500,000 claims each year (around 75% of all personal injury claims) will be processed through it. Despite negativity surrounding the new scheme, there are undoubtedly benefits to both sides. Simplification of the litigation procedure and the imposition of much stricter time limits means that, where cases remain in the scheme, claimants receive compensation much faster. Whereas previously insurers had three months to investigate claims under the personal injury pre-action protocol, the new procedure substantially reduces the time limit for responding on liability to 15 business days (or 30 business days for claims involving the Motor Insurers Bureau). The scheme also specifically provides for an interim payment to be made to the claimant where a claim is not going to be capable of settlement on receipt of the initial medical evidence or if quantum cannot be agreed. With all communications between claimant lawyers and insurance companies now being carried out via the dedicated secure online portal, gone are the old excuses of delays due to not having received letters and faxes. If a defendant insurer does not respond to the claims notification form or the settlement pack in the allocated time, the portal automatically locks the claim out, avoiding arguments as to whether they complied in time or not. Online standardised forms with mandatory data fields also ensure that the insurer receives all the essential information to be able to deal with the claim at an early stage. There are also benefits in improved cashflow to claimants’ lawyers. Although the fixed costs paid are restrictive, the costs are payable at the end of each of stage, rather than the end of the case. Restrictive costs have led firms to think hard about their IT practices and internal procedures. This in turn should lead to an improved claims experience for clients and allow them a clearer understanding of the process involved. The new scheme has provoked a lot of discussion amongst fellow claimant lawyers, particularly through associations such as APIL and MASS, seeing members of the profession pulling together to share advice and experiences. The MoJ, having rushed the scheme through subsequently, washed its hands of it stating that the running of the system was a matter for the industry, as it is funded by the insurance industry, not the MoJ. Perhaps if implementation had been delayed until the systems were more advanced there would more positivity about the whole process now. Seven months on and many of the early teething problems have been overcome, but it is still too early to predict success. Preparations are under way for system enhancements to be rolled out in March 2011, so users on both sides should be encouraged to provide constructive feedback to shape and enhance the scheme. Lord Young, in his recent report, Common Sense, Common Safety, stated that he would like to see the MoJ portal limit for RTA claims extended from £10,000 up to £25,000, and proposes that a similar system should be introduced into other areas of personal injury and lower-value clinical negligence cases. While benefits can be seen in the arena of RTA claims, such a standardised process is far too rigid for more complex areas of law, and such a role out should be approached with extreme caution. It is vital to maintain flexibility in the claims process to ensure that victims injured by the negligence of others are given the opportunity to be treated individually and with fairness. The introduction of the new RTA process follows a persistent drive by insurers to cut the costs of personal injury claims, and some insurers, such as Zurich, have already reported significant cost savings. Nevertheless, the Association of British Insurers continues to make statements about the public paying for the so-called ‘compensation culture’ through increases in insurance premiums, banding about statistics that legal fees add £40 per annum to the average motor insurance premium. It makes no mention of its involvement in the development of the new MoJ scheme or the consequent costs savings being reported by some of its members. This does nothing but boost hype about the perceived ‘compensation culture’ and raises doubt that the public will actually see any costs savings being passed on. Alex Drake , associate, Thomson Snell & Passmore
The Legal Services Board must resist the urge to ‘micro-manage’ aspects of legal regulation, and should reduce its budget rather than extending its role to become an ‘economic regulator’, the Law Society has warned. Responding to the LSB’s draft business plan, Chancery Lane also cautioned that the overarching regulator’s £900,000 budget (over three years) for externally funded research risked ‘duplicating’ work already being done by frontline regulators such as the Solicitors Regulation Authority. The Society said: ‘The LSB’s interpretation of the regulatory context seems to be shifting towards placing increasing emphasis on considering the skills, distribution and makeup of the legal sector. It is doubtful whether this is the proper business of the LSB. ‘The LSB was not designed to be an economic regulator, like those governing the utilities; it has a more limited role. ‘It is important that the LSB does not divert resources into research relating to economic regulation, rather than reducing its budget.’ Chancery Lane noted that the LSB planned to maintain its 2011/12 budget at £4.9m. It suggested that the regulator should instead be looking to reduce its budget, around 80% of which is likely to be paid by solicitors. Chancery Lane also voiced concern over the LSB’s plans in relation to education and training in the profession. It said: ‘The LSB says that it will assess how education and training requirements can be used as a regulatory tool to ensure proper standards of professional and ethical competence across the legal workforce. ‘We understand that the LSB, as an oversight regulator, would want to know how frontline regulators are achieving this aim… [but it] must resist the urge to micro-manage the process.’ The Society did, however, acknowledge that the LSB had ‘quickly grasped the legal landscape’ and operated in a ‘professional and consultative manner’. An LSB spokesman said it would discuss responses to its draft business plan at its board meeting next week.
I saw the letter from Edwin Lee, reminding us of that splendid idea of setting up a solicitors’ building society. It was a good idea in 1984 and it is still a good idea. The loss of so many building societies has been catastrophic. This country was the envy of the world in having organisations set up with the sole purpose of lending money to people to help them buy their own homes. What could be better than a building society set up and run by the solicitors branch of the legal profession to assist their clients? Lloyd M Groves, past president and secretary, West London Law Society, Northwood, Middlesex
Many law firms like to make a show of putting a nice piece of art on the wall, in an attempt to look highbrow. But it’s fair to say Sussex firm Burt Brill & Cardens has paid more than lip service to the local arts scene, having injected nearly £400,000 over the years into sponsoring Brighton’s Burt Brill & Cardens Graduate Show. Managing partner David Edwards says the firm has sponsored the art show for the past 16 years. Mind you, you would think he’d have learned by now how to hang a picture the right way up