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Trips and traps from UK law practice

Opinion

Greater government control of the legal market, “robot” lawyers and an erosion of legal aid – these are some of the challenges being negotiated by UK lawyers. Our legal commentator Morry Bailes reports that Australian lawyers should follow these developments closely.

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Being President of the Law Society of England and Wales is no small job. The society has a membership of 160,000 English and Welsh lawyers and is in the thick of the law and politics of Chancery Lane.

The current president is Mr Jonathan Smithers. In recognition of the demands of the job, the president resides opposite the Law Society in Carey Street and, until the Thatcher years, the president was granted by convention a knighthood at the completion of his or her term. The president’s house looks onto one of the main legal districts in London, The Royal Courts of Justice and the Temple beyond. It was here I visited Mr Smithers last week.

In the current day the demands of the position leave the President contemplating rather more than the loss of the opportunity for his knighthood. There is much that is on a President’s plate, and what is currently happening in England and Wales is interesting and relevant to legal practice in Australia insofar as it can indicate trends and challenges that might be coming to our market.

Here are six significant matters currently exercising the mind of the president and members of the Law Society of England and Wales.

Liberalisation of the legal industry

England and Wales are dealing with the fallout of the liberalisation of the legal industry, that is to say the ownership of law firms by non-lawyers. It was a reform introduced there in 2007. In Australia,  this sort of liberalisation is present in some but not all of our jurisdictions. It has seen, for example, the public listings on the ASX of law firms Slater and Gordon and then Shine, both of whom have experienced falling share prices, Slaters dramatically.

In England and Wales the Solicitors Regulatory Board can award an alternate business structure (ABS) licence and it has been doing so, to the consternation of some. British Telecom has a licence as does the Co-operative Supermarket chain. Contrary to popular myth, well-known UK supermarket giant Tesco does not have a licence, but the phrase ‘Tesco Law’ seems to have stuck in Britain. It conjures up the image of being offered legal services with your Tim Tams. What might the future of non-lawyer ownership of law firms be in Australia and is this a good or bad thing? Perhaps only time will tell but I think I have an inkling.

Macro control of the legal market

Some years ago the UK government decided to award legal aid for criminal work on a contractual basis only, and to select firms. It was an attempt to consolidate the market. Those firms who missed out found life very hard or went out of business. There was an understandable outcry from the criminal profession not least of which centred around the entitlement of a client to choose their solicitor.

In short the experiment has not worked and is to be wound back. The lesson may be that attempts at macro control of the legal profession by governments can and often do back fire. Australian governments take note.

Legal aid

As in Australia, there have been attempts in the UK to cut legal aid. Everyone associated with the industry thinks this is a bad idea and not only out of self-interest. Judges complain of court time wasted by unrepresented litigants who can’t afford legal representation.

The government’s answer in Britain in part seems to be to encourage the pro bono offering by the profession. In fact, when contracting to government in Australia they often force it, by requiring a firm to commit to a certain number of pro bono hours.  I am in no sense against pro bono work being undertaken by the profession, and our own Law Society recently conducted a survey that showed our profession provides substantial pro bono help. My objection is philosophical.

When we have difficulty with our health budgets do we ask doctors and nurses to work for free? Why then lawyers? As to unrepresented litigants, Mr Smithers theorises that there is more than one type. Some simply don’t want to pay a lawyer even though they are able, just like some people try to fix their piping without a plumber or their electricity circuit without an electrician. The reputation of the legal profession should not be called into question if some people just don’t want to spend the money.

As to those who genuinely need help, that in Mr Smithers’ view and mine is a role for government. Don’t cut the legal aid spend, increase it if we wish to pay other than lip service to the rule of law. By increasing it you would get more lawyers doing legally aided work and return some economic sense to the cycle.

Robot law and online courts

There is a prevailing view in England Wales that some unmet legal need may in the future be satisfied by Artificial Intelligence (AI). There is a level of dispute when the involvement of a lawyer simply cannot be justified – when the money spent on lawyers is not worth the sum of the dispute. Enter the world of AI where the facts of a matter can be entered online and a sophisticated algorithm predicts an outcome. Such software is currently accessed by in-house counsel even now in the US. There it is used to make threshold decision as to whether it is worth briefing an external lawyer or concluding the dispute there and then. If this is one way to satisfy unmet legal need at a certain level then Australian governments ought to accelerate our own research and investment.

In the same vein, the UK government intends savings of £700m from court closures to be reinvested in online courts and online court-assisted mediation.

This is brilliant in theory but there are genuine questions being asked as to the preparedness and, indeed, the intellectual capacity of often older non-tech savvy judges to cope with the technology. There is only so much a judge’s associate can do, and what we are really talking of here is a profound cultural shift in the judiciary. I would not be holding my breath for this to readily work, at least first up.

All this is likely lost on our own jurisdiction in South Australia. There is so much under investment in our courts we can’t even stop our court rooms from leaking!

Getting what you pay for

The perennial topic of legal cost hit the Fleet Street press last week with headline reports about partners in large and Magic Circle firms charging over £1000 per hour. There was the usual outrage, however one commentator laconically observed that it was much like outrage from a person on benefits confronted by the cost of a Michelin star restaurant menu. That, of course, is the point. These firms are used by those who can afford them and who want world best experts, and are prepared to pay for it. The market decides, and to state the obvious the legal industry is divided between the monsters and the minnows both in size of firm and what they charge.

Nevertheless the UK Government is talking of the introduction of fixed priced fees for litigation of under £250,000. As an aside this will be of little consequence to the large and Magic Circle firms who likely don’t operate in this space but it will make life difficult for both solicitors and clients who do.

For solicitors it is always difficult to estimate the cost of litigation. So much is down to the personality of a client, their resources, determination and motive. And those consideration come before taking into account the same attributes in the opposing party, not to mention the notorious unreliability of the courts (in our jurisdiction at least) to get a matter started on time. For the client there may be some greater certainty but there may not be quality representation. Many good lawyers simply wouldn’t do the job on those terms and that has the potential to reduce the talent pool from which the client may have to choose a lawyer.

If it proceeds it may be another of those macro attempts to impact the practise of the law but, like many of these attempts, I am not convinced it would work – attempting to overly control a free market rarely does, or at least has unintended consequences.

Excellence versus consumerism

Lastly is the observation by Mr Smithers that the UK Government, on the basis of appeasement to consumerism, may be eroding the reputation and standing of the profession in England and Wales. He warns that may come with a consequence.

Much of the reason for the success of the British profession in Asia comes down to educational links. That is to say, those Asian lawyers who invite members of the UK legal profession to vend their services in such markets as Singapore, Hong Kong and the like, do so because many have been educated and often worked in the UK.

Dabble too much to the detriment of the quality of the profession there and, Mr Smithers fears, its reputation will slide. A consequence of that may be to discourage the Asian import of legal services because there is an insufficient differential when compared to the local product.

There is a lesson and warning for Australians in this. Our lesson is one of opportunity: if we remain a centre of legal excellence in the Asia Pacific, and given our geographic proximity, our legal export market can increase. The warning is obvious. Dumbing down the profession to suit the consumer lobby is in no-one’s interest, and is certainly not in our economic interest. Here’s hoping Brits and Australians can continue to work side by side in Asia and both increase our market shares without either of our governments meddling overly much in our independent professions.

I was most obliged to Mr Smithers for his time. His term soon ends and I congratulate him on discharging a difficult role very successfully. England and Wales may not be our near neighbours in geographic terms but they are in the practise of the law, and it is wise to watch their markets carefully for both tips and traps.

Morry Bailes is the managing partner at Tindall Gask Bentley Lawyers, Member of the Executive of the Law Council of Australia and immediate past President of the Law Society of SA. The opinions expressed in this column are his own.

His column appears every second Thursday.

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