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Major legal aid firms have developed to the size they are by many methods. They would say that they have invested in staff, training, offices and community ties. Some have joined in with the LSC in running Community Legal Advice Centres and in other projects. They would also argue that they participate in consultations and in the development of legal aid reform.
Not long ago (2006) Lord Carter undertook a consultation process and then published a report into legal aid. The Major Law Firms lobbied for, and thought they had obtained, reforms that would favour them. They want a greater slice of the duty solicitor at police stations cake and for clients to have to continue to use them so that they can consolidate (control?) the market. This would reduce or eliminate opposition from smaller firms and allow the larger firms to take over. This assumes that duty solicitor work at police stations is a substantial market share. To increase the share the answer is: make all clients at police stations who ask for a solicitor, duty solicitor clients and get rid of own client choice. Duty Solicitors offer free legal advice and representation to those people in a police station who seek legal advice but who dont know a solicitor. All criminal legal aid solicitors are duty solicitors. Duty Solicitors are not an inferior breed. People who have been arreested a few times may decide to stick with a Solicitor and so become "own clients".
The MoJ and LSC quite like the idea of ensuring a market approach to refrom by reshaping and controlling the market parameters (isn't that a paradox?). They believe in a notion called "economies" of scale which is promised to them by the Major Law Firms which means that the LSC believes that by giving Major Law Firms more of the market the Major Law Firms can do more work for less.
In the Executive Summary to Lord Carter's Report "Legal Aid A market-based approach to reform" there is this entry:
Profitability
30 The reforms will have an impact on suppliers, especially criminal defence suppliers. In terms of profitability, the proposed new fee structures will allow good quality efficient criminal defence suppliers to make a reasonable return. Moreover, as the volume of work that firms can undertake increases, so too does the return they can earn. While a sole practitioner is likely to earn £36,000 to £55,000, an equity partner in a firm with 40 fee earners could expect to earn between £120,000 and £150,000.
This has proved to be the main problem. Volumes of work have decreased, not increased. The sales pitch ie adopt these proposals, become efficient and make money has failed to materialise what it promised-more money. Economies of scale?? More like the LSC's equivalent of "The Old Lie".
The LSC is a bureaucratic addict. It can't get enough of bureaucracy. It meddles in the minutiae of how a firm is run. This is on the pretence of being concerned about the quality of service that legal aid clients receive. The truth is that it is about gathering information, justifying jobs and policies and interfering.
The Government believes that legal aid spending is out of control and must be reined in. To an extent The Law Society and Bar Council and other representative bodies go along with this and promise to be able to do something about it.
Why should the Major Law Firms get preferential treatment? There is no good reason. Just as companies who have expanded in a growing market must become leaner and more efficient in a shrinking market so the Major Law Firms should cut their cloth to the size of their share of the legal aid cake that fits. That's what everyone else has had to do.
Here's an extract from Otterburn Consulting's recent report
Impact of the MOJ Green Paper proposals on legal aid firms February 2011
“Based on the figures for the most recent year for which have audited accounts a 10%
reduction in all fees paid in publicly funded civil and family matters would translate to a
reduction in fees to this firm of £157,140, or 9% of the firm’s total fee income for the
year. If the new definition of domestic violence proposed in the report is then applied legal
aid would only have been available to 25% of the private law family clients we acted for
and this would have reduced the fee income by a further £387,683 which translates to a
total reduction of 30% of the firms annual fee income for the year.“
In order to restore profitability to current levels, this firm would have to cut its payroll
by nearly 70%. It would be extremely difficult for this firm to survive the proposals and
there will be many others in the same position. Overall, for firms to restore profits to
the position they are now would require payroll costs to be reduced by approximately
40%. They will have to fund significant redundancy liabilities and many will have long
term lease commitments in respect of their premises. As indicated in section 5, most
firms lack the financial resources to survive this degree of contraction and many of the
current suppliers will not survive.
If there isn't enough money to pay properly qualified staff to do the work and employ trainees then make cuts-don't whinge to Government. Don't seek to control the market. True economies of scale come from a free market. The market decides the size of legal aid firms. Solicitors who undertake legal aid work only get paid IF the client qualifies for legal aid. The LSC decides who gets legal aid. They control the legal aid budget through deciding scope and by imposing a means test and merits test created by and approved by Government.
What are "economies of scale"? Good question. Its an oft-quoted phrase with little real meaning as far as service industries are concerned. A concept brought to legal aid by ex NHS Admin Consultants who work at the LSC. It ignores the fact that being a Solicitor is being a member of a profession. Sure there are efficiency stratagies that one can introduce (learned from industry, eg lean kaizen) but economies of scale??
Major legal aid firms have developed to the size they are by many methods. They would say that they have invested in staff, training, offices and community ties. Some have joined in with the LSC in running Community Legal Advice Centres and in other projects. They would also argue that they participate in consultations and in the development of legal aid reform.
Not long ago (2006) Lord Carter undertook a consultation process and then published a report into legal aid. The Major Law Firms lobbied for, and thought they had obtained, reforms that would favour them. They want a greater slice of the duty solicitor at police stations cake and for clients to have to continue to use them so that they can consolidate (control?) the market. This would reduce or eliminate opposition from smaller firms and allow the larger firms to take over. This assumes that duty solicitor work at police stations is a substantial market share. To increase the share the answer is: make all clients at police stations who ask for a solicitor, duty solicitor clients and get rid of own client choice. Duty Solicitors offer free legal advice and representation to those people in a police station who seek legal advice but who dont know a solicitor. All criminal legal aid solicitors are duty solicitors. Duty Solicitors are not an inferior breed. People who have been arreested a few times may decide to stick with a Solicitor and so become "own clients".
The MoJ and LSC quite like the idea of ensuring a market approach to refrom by reshaping and controlling the market parameters (isn't that a paradox?). They believe in a notion called "economies" of scale which is promised to them by the Major Law Firms which means that the LSC believes that by giving Major Law Firms more of the market the Major Law Firms can do more work for less.
In the Executive Summary to Lord Carter's Report "Legal Aid A market-based approach to reform" there is this entry:
Profitability
30 The reforms will have an impact on suppliers, especially criminal defence suppliers. In terms of profitability, the proposed new fee structures will allow good quality efficient criminal defence suppliers to make a reasonable return. Moreover, as the volume of work that firms can undertake increases, so too does the return they can earn. While a sole practitioner is likely to earn £36,000 to £55,000, an equity partner in a firm with 40 fee earners could expect to earn between £120,000 and £150,000.
This has proved to be the main problem. Volumes of work have decreased, not increased. The sales pitch ie adopt these proposals, become efficient and make money has failed to materialise what it promised-more money. Economies of scale?? More like the LSC's equivalent of "The Old Lie".
The LSC is a bureaucratic addict. It can't get enough of bureaucracy. It meddles in the minutiae of how a firm is run. This is on the pretence of being concerned about the quality of service that legal aid clients receive. The truth is that it is about gathering information, justifying jobs and policies and interfering.
The Government believes that legal aid spending is out of control and must be reined in. To an extent The Law Society and Bar Council and other representative bodies go along with this and promise to be able to do something about it.
Why should the Major Law Firms get preferential treatment? There is no good reason. Just as companies who have expanded in a growing market must become leaner and more efficient in a shrinking market so the Major Law Firms should cut their cloth to the size of their share of the legal aid cake that fits. That's what everyone else has had to do.
Here's an extract from Otterburn Consulting's recent report
Impact of the MOJ Green Paper proposals on legal aid firms February 2011
The problem many firms will face is illustrated by this quote from a well‐regarded firm
that mainly undertakes publicly funded civil and family work. A firm with 25 fee
earners, it is very much the type of firm that the LSC has sought to encourage in recent
years, capable of undertaking a wide range of work to a high standard and at low cost. It
generated fees of £1.7m and a total profit before partner salaries of £376,000:
that mainly undertakes publicly funded civil and family work. A firm with 25 fee
earners, it is very much the type of firm that the LSC has sought to encourage in recent
years, capable of undertaking a wide range of work to a high standard and at low cost. It
generated fees of £1.7m and a total profit before partner salaries of £376,000:
“Based on the figures for the most recent year for which have audited accounts a 10%
reduction in all fees paid in publicly funded civil and family matters would translate to a
reduction in fees to this firm of £157,140, or 9% of the firm’s total fee income for the
year. If the new definition of domestic violence proposed in the report is then applied legal
aid would only have been available to 25% of the private law family clients we acted for
and this would have reduced the fee income by a further £387,683 which translates to a
total reduction of 30% of the firms annual fee income for the year.“
In order to restore profitability to current levels, this firm would have to cut its payroll
by nearly 70%. It would be extremely difficult for this firm to survive the proposals and
there will be many others in the same position. Overall, for firms to restore profits to
the position they are now would require payroll costs to be reduced by approximately
40%. They will have to fund significant redundancy liabilities and many will have long
term lease commitments in respect of their premises. As indicated in section 5, most
firms lack the financial resources to survive this degree of contraction and many of the
current suppliers will not survive.
If there isn't enough money to pay properly qualified staff to do the work and employ trainees then make cuts-don't whinge to Government. Don't seek to control the market. True economies of scale come from a free market. The market decides the size of legal aid firms. Solicitors who undertake legal aid work only get paid IF the client qualifies for legal aid. The LSC decides who gets legal aid. They control the legal aid budget through deciding scope and by imposing a means test and merits test created by and approved by Government.
What are "economies of scale"? Good question. Its an oft-quoted phrase with little real meaning as far as service industries are concerned. A concept brought to legal aid by ex NHS Admin Consultants who work at the LSC. It ignores the fact that being a Solicitor is being a member of a profession. Sure there are efficiency stratagies that one can introduce (learned from industry, eg lean kaizen) but economies of scale??
This article looks at Dentistry in the USA. An interesting comparator for legal aid firms in England and Wales, what with all the talk of ABSs, brands and innovation under the LSA.
What would work would be the Government scrapping the Legal Services Comission. There are too many people in roles to do with policy and administration and "thinking" who should be forced to get a real job. Her Majesty's Courts and Tribunal Service (new Government, new name) could employ LSC staff to process legal aid applications, which in turn could be made much less bureaucratic. Other common law countries who offer legal aid seem to be able to do this (ie make the forms simpler). In this way the Government saves money and allows those who process the documents to do so.
The payment system could be simplified. There is a bureaucratic nonsense which requires assessments of bills by a costs judge before being sent to the LSC to be re-assessed then paid where the only paying party is the LSC. These processes should be reviewed and streamlined and greater use made of electronic submissions and processing.
In a free market economy the State should play as little a part as possible. It should resist special interest pleading and allow efficient firms of whatever size to represent clients who wish to use their services. Forcing people to use a specific Solicitor is another attempt to differentiate the rights of the poor and middle income clients as opposed to the rich (who seem to have all the rights money can buy).
The MoJ civil servants are obsessed with "over supply" and the merging of firms because they believe it will save money and make their lives much easier. Not much of a reason to force you to use someone you dont want.
Who are the Major Law Firms?-who knows. They are a secret bunch.
Private Enterprise in a Prison: the Free Market Economy of La Mesa Penitenciaria
What would work would be the Government scrapping the Legal Services Comission. There are too many people in roles to do with policy and administration and "thinking" who should be forced to get a real job. Her Majesty's Courts and Tribunal Service (new Government, new name) could employ LSC staff to process legal aid applications, which in turn could be made much less bureaucratic. Other common law countries who offer legal aid seem to be able to do this (ie make the forms simpler). In this way the Government saves money and allows those who process the documents to do so.
The payment system could be simplified. There is a bureaucratic nonsense which requires assessments of bills by a costs judge before being sent to the LSC to be re-assessed then paid where the only paying party is the LSC. These processes should be reviewed and streamlined and greater use made of electronic submissions and processing.
In a free market economy the State should play as little a part as possible. It should resist special interest pleading and allow efficient firms of whatever size to represent clients who wish to use their services. Forcing people to use a specific Solicitor is another attempt to differentiate the rights of the poor and middle income clients as opposed to the rich (who seem to have all the rights money can buy).
The MoJ civil servants are obsessed with "over supply" and the merging of firms because they believe it will save money and make their lives much easier. Not much of a reason to force you to use someone you dont want.
Who are the Major Law Firms?-who knows. They are a secret bunch.
Private Enterprise in a Prison: the Free Market Economy of La Mesa Penitenciaria
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