Chancery Lame can no longer limp on

In the wake of the Law Society's bungled handling of the SIF crisis, John Malpas finds temperatures in the profession running sky-high

“I'm not interested in the Law Society, it is a complete waste of time and I'd like to see it go completely.”

This was Nick Squire's exasperated reaction when he was asked by The Lawyer last week how the Law Society can improve.

“Every now and again you get some piece of rubbish that comes through the post, but most solicitors in the City just get on with their work. They don't care about the Law Society, it has nothing to do with them.”

Squire, senior partner at niche City insurance practice Squire & Co, sat on the City of London Law Society's (CLLS) working party, whose response to Chancery Lane's consultation on the future of professional indemnity was shot through with a mixture of anger and despair at the Law Society.

Its central message – that SIF is a discredited institution which should be abolished – is well-known. But, in a revealing passage, it adds that if SIF were to be kept, “every possible step must be taken to ensure the independence of the fund from the council of the Law Society”.

To put it more bluntly, it is saying: “Don't, for Pete's sake, let those bungling amateurs at the Law Society have anything to do with it.”

The response is a reflection of the anger generated within the City by the Law Society's handling of the SIF crisis.

If the society had actually set out to deliberately antagonise City and large commercial firms, it could hardly have done a better job.

When the Law Society set up a committee to find a solution to the SIF crisis, it sensibly invited lawyers from a national and a City firm to get their perspective.

Predictably, Edward Coulson of Hammond Suddards, and George Ritchie of Freshfields, came out in favour of the open market option. Even more predictably, their views were sidelined.

Reflecting on his frustrating experience trying to help the society, Coulson says: “There seemed to be a division within the society between the council members, who I believe very often don't understand the issues, and the executive, the civil service, which seems to be fundamentally in favour of the retention of SIF.”

Like Squire, Coulson does not plan to have anything more to do with the Law Society. And, of course, they are not alone. A procession of surveys and reports commissioned by the Law Society has told it that solicitors from all sections of the profession either hate the society or find it irrelevant.

How can Chancery Lane improve? Coulson and the CLLS's experience would suggest that it needs to do two things: firstly it must recognise that it can no longer be the profession's nanny deciding what it thinks is best for it as a whole; and secondly it must sort out its governance so it is no longer a byword for inefficiency.

These two elements are, of course, interlinked. Coulson puts the society's resistance to the open market insurance option down to the innate resistance of the bureaucracy to change – especially if it involves a diminution of its powers. In the absence of clear leadership, he suggests, the society was bound to want to stick with SIF.

Of course the civil servants and their supporters at the Law Society would not see it quite like that.

The society's desire to keep the fund is not due to some dark hidden agenda, but because of the conviction that a mutual fund is best for the profession as a whole.

“Running through this whole SIF issue has been the belief that in return for making pots of money, the City should to an extent subsidise the smaller firms who are doing the less profitable but socially necessary work that they don't want to do,” says a Law Society source.

In the absence of any clear leadership within the Law Society this view has prevailed against a background of constant dithering. News of SIF's shortfall first emerged in January 1997. This week, 21 months later, the Law Society's council is scheduled to decide what to do about it.

The council is, however, unlikely to reach a firm decision. Having presented keeping SIF or allowing firms to insure on the open market as all or nothing options, the society has suddenly come up with a new suggestion – keeping SIF but allowing firms to insure on the open market as well. But that, they say, will need further research.

Ex-Law Society president Martin Mears, who claims credit for the new idea, confidently predicts a further period of prevarication as new working parties are formed to mull over it.

Against this background, the new presidential team at the Law Society is embarking on yet another attempt to reform Chancery Lane.

This Wednesday society president Michael Mathews, vice-president Robert Sayer and deputy vice-president Kamlesh Bahl will present council members with a blueprint for reform.

They will be armed with the analysis of a captain of industry – Sir Dennis Stevenson – which says that, in order to be effective, the society must be run more like a successful company than a high street firm that is about to go under.

Earlier this month, he told the council that there was a power vacuum within the Law Society and, like any successful company, it needed a board or executive committee made up of a small elite of council members with the power to set the agenda and make difficult decisions.

By all accounts, the suggestion struck a chord with the council.

It will also be music to the ears of the many staff within the society who are crying out for leadership, direction and a more efficient working environment.

One senior official says he is embarrassed by the Law Society's inefficiency.

He hopes the SIF crisis has killed two birds with one stone – convincing the Law Society to sort out its system of governance, and rid itself of its patronising attitude towards the profession.

“Rather than cushioning under-performing solicitors from the realities of the market, we should advise them on how to survive,” he says.

This, of course, is an age-old theme that has been championed by, among others, the former secretary general, John Hayes, and Henry Hodge, the spurned Law Society presidential candidate.

It is not a message the struggling solicitor on the high street wants to hear – hence the grassroots revolt that led to the election of Martin Mears as president of the Law Society in 1995.

But, as one senior “modernising” council member puts it: “We can't turn back the clock, solicitors have got to adapt to survive.”

He adds: “I have every sympathy for the struggling high street practitioner who is approaching the end of his career, but I have absolutely no sympathy for the solicitor in his 30s or 40s who hasn't responded to the changing market by adapting his or her practice.”

Tough words indeed. But so far the Law Society has not had the guts to pin its colours to the mast and deliver this message.

True, tentative steps are being made to improve the services that the Law Society provides to the profession.

But in the absence of clear leadership, the society will simply flounder on from one crisis to another while its good ideas – like its new practice management club – go unnoticed.

Running the Law Society along the lines of a company is all very New Labour, but it might just work – and it cannot be any worse than the current version.