Direct access: opening the bar to new business
21 November 2011 | By Joanne Harris
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The bar can make use of direct access to help it keep up with the changing legal landscape.
As the regulatory doors to multi-disciplinary partnerships and alternative business structures widen, lawyers are being forced to become ever-more innovative to keep pace with new entrants.
Most of the stories about innovation thus far have focused on the solicitors’ profession, but the bar will also have to react to the changing environment. One way, it seems, could well be through direct access.
Direct access - or, as Bar Council chairman Peter Lodder QC prefers, public access to the bar - is not a new concept. The bar’s Public Access Rules came into force in 2004, enabling ordinary members of the public to instruct barristers, but companies and organisations have been able to go directly to chambers for far longer.
Despite this, direct access is still something that some in-housers are wary of. At a debate on the topic held by The Lawyer in association with Grant Thornton, only some half-a-dozen hands went up when Lodder asked how many had instructed the bar directly.
But the discussion made it clear that there is significant interest in the area. As overheads get squeezed even further many in-house counsel are looking for new sources of external advice. Self-employed barristers have lower overheads and, lacking corporate red tape, can work much more quickly than large solicitors’ firms.
As Linklaters partner Christopher Style QC puts it, the current market environment means “everything is up for grabs”.
“I don’t think this is a territorial thing; I don’t think it’s a land-grab,” he adds. “You have the bar, you have the solicitors’ branch of the profession, you have the accountancy practices, and what we’re all trying to do is to be flexible and to deliver the right service to achieve a sensible outcome in relation to any given problem.”
Style says solicitors should not have any problems with the concept of direct access: in fact, he argues that solicitors who charge or general counsel who pay for firms to do mundane tasks such as bundling “should be sacked”.
“Our job is to work with what resource is best suited to any particular job,” he expands. “Sometimes that will involve outsourcing to an LPO provider in Mumbai, sometimes it will involve employing teams of temporary staff in London, New York or Hong Kong, sometimes it will involve the forensic practices of the Big Four accountancy firms.”
Pick and fix
What the buyers of legal services really want is the ability to pick who they instruct.
“Being a client there’s one thing that upsets me most of all, and that’s a barrier to choice,” says Barclays managing director of litigation and investigations Jonathan Peddie. “There’s a huge number of different versions of the bar and I want that to be the case because I want to chase down talent wherever it lies.”
“I’m happy that there’s going to be more competition out there,” says Ranald Munro, general counsel at Chubb Insurance, of the Legal Services Act (LSA). Munro admits that as a barrister by qualification he is “quite predisposed” to going to the bar, but getting value for money is always a key consideration.
In-housers say they tend to approach a piece of litigation with the idea of handling it themselves. A massive 87 per cent of Barclays’ contentious work is done by Peddie and his team.
“We start from the point of view of doing it ourselves,” he explains, “then we ask what value add can be added by the service provider.”
In contrast to solicitors’ panels, formal barristers’ panels are still relatively rare. A few public sector organisations and consortia have gone down this route, including most recently the South-West Wales Legal Consortium, which picked a range of regional and London sets for its first panel.
Veolia Environnement is also experimenting with the concept, recently appointing Hardwicke Chambers along with solicitors’ firms to its panel. General counsel Mike Butcher says he has instructed barristers directly in the past, including members of Hardwicke, but has never before had chambers on the company’s panel.
He explains that, having worked with Hardwicke in the past, he had been impressed by the set’s responsive attitude, which enables him to pick up the phone for an informal chat with a barrister without this necessarily being charged.
The speed and efficiency of the bar is one of its main advantages for those looking at direct access. University of Westminster academic John Flood, who has researched the area, says this is key to what in-house counsel are seeking.
“General counsel have now become the powerbrokers. They’re looking for the most efficient delivery of legal services,” he says. “There are no monopolies any more; there’s no competitive advantage to being a solicitor or barrister.”
The quality of the advice and knowledge of the law provided by English barristers is accepted by all as being a clear benefit for instructing parties. Peddie also points out that direct access gives in-house counsel a stronger relationship with their barristers.
“Sometimes there’s no point or need to use an external solicitor in specific cases. The more you build a working relationship, the better it is,” he says.
But there are pitfalls to choosing the direct access route. The decision to manage a case in this way means a general counsel is deliberately not instructing a solicitors’ firm. For small matters, that could be fine, but if the issue blows up and solicitors are needed retrospectively, this adds additional cost and complexity that could perhaps have been avoided.
Such events also cause internal problems for a company, as the in-house team have to shift work around to manage it appropriately. It is, of course, important for the chambers involved to advise that more support is brought in if necessary.
“In the case of any significant litigation, we’d always recommend a course of action that most benefits the client,” asserts One Essex Court senior clerk Darren Burrows.
Resource and scheduling are also potential problems that need to be considered; if a barrister is involved on a major court case he or she may be unable to take the direct instruction.
In with the new
The main barrier, however, to more in-house counsel going down the direct access route seems to be that chambers have not been especially proactive about promoting themselves and demonstrating clearly to general counsel what their capabilities are.
“I truly believe that the bar, in the sense of barristers practising from chambers, is wonderful at advocacy and litigation,” says Butcher. “But if they remain captured by just that way of thinking of themselves, they’ll miss out on some pretty important business opportunities.”
Munro agrees. “I think the bar has to be much better at marketing what it can do,” he says.
The key word appears to be modernity. For many, the bar is still associated with tradition, but as Peddie says: “They need to think in the 21st century. There’s a perception of the bar that’s at odds with some of the realities.”
Burrows argues that many sets already do operate in a modern way. “The dusty old bar is still to be found, but the world has changed,” he believes.
The place of the bar in the new, post-LSA world is key, according to Lincoln House Chambers’ Alastair Webster QC.
“The bar has to recognise that it’s a service provider, with the emphasis on service,” he says.
The debate panellists suggest this means chambers need to be proactive about the way they offer their services, for example by having client-facing groups comprised of barristers, clerks and other chambers staff to handle the relationships.
Secondments are another area that would improve the way in-house counsel and barristers deal with each other. At Veolia, Hardwicke’s appointment to the panel was preceded by a secondment. Butcher says the “terrific” junior barrister seconded to Veolia was amazed by what she found.
“I think she was gobsmacked by the quality of the work and how much she learnt, and how interesting it was,” he adds.
Butcher follows the observation with the caveat that associates on secondment from solicitors’ firms learn just as much. Nevertheless, for barristers, building up relationships through secondments and bringing the commercial knowledge of the business back to chambers could be a crucial tool.
Equally important is the need for chambers to demonstrate to clients that they can use that commercial knowledge. As Munro points out, companies are looking for day-to-day commercial advice.
Clients also need to be reassured that sets have in place the correct systems and procedures for handling conflicts and similar issues. It is normal for barristers in the same set to appear on different sides of a case, something clients in the UK are used to, but international clients, especially those in the US, still need reassurance about.
While clerks admit that just 20 years ago accusations that chambers did not protect against conflicts would have been valid, they are confident that these days they are set up to deal with such issues. Brick Court Chambers senior clerk Ian Moyler relates the efforts his set has gone to to guard against conflicts in the Berezovsky v Abramovich case, thanks to having counsel on both sides.
But clearly the message has not got through to all. Peddie says it is “news” to him that chambers have such processes in place, but adds that chambers should market that information to clients because it would place a set in a group of providers able to advise on more commercial matters.
For the individual barristers, being able to fight a case against a fellow chambers tenant retains a thrill.
“Never underestimate beating someone in the same set,” observes Webster.
Guarding the independence of the bar is crucial. While acknowledging the need for better systems and procedures, and praising the improved efficiency of chambers in recent years, Style warns that the profession must not lose its main competitive advantage.
“One of the strengths at the moment is that the independent bar offers a bunch of sole practitioners who are ungeared and therefore cheap,” he argues. “It would be a terrible shame if sets of chambers geared up with legal executives and other people to equip themselves to handle more work than they can deal with. They’d lose their USP, which is the fact that they’re sole practitioners available to all at a modest cost.”
Style acknowledges that the argument might be different for high-street solicitors and barristers, who might well find economies of scale by entering into partnership together as the LSA now allows.
For commercial sets acting for big in-house clients, the LSA could bring other challenges with a greater variety of providers going for the same type of work.
“We’re entering a period in which lots of new entrants are going to emerge,” Flood predicts.
Despite the threat of a challenge from other sectors of the legal profession, the future for direct access is positive, provided the bar itself rises to the challenges. Burrows says chambers need to market themselves proactively.
Peddie believes the secret to using direct access effectively is using it for the right things and in moderation. He points out that over the years in which direct access has been possible, people who have used it “judiciously” have gained from the option, but others, who may have overused direct access, have had their fingers burned.
Direct access remains, as Webster puts it, “a really important addition to the set of golf clubs”. But it is far from being the only club in the bag. Just like a good caddy, a good lawyer must ensure that his first duty is to pick the right tool for the job at hand.