An ill wind

Regional sets are having to face up to the fact that their world is changing, and fast

Weathervane

Drastic cuts to the legal aid budget, the reformation of the way civil litigation is funded and a spluttering economy – these are the challenges facing sets across the country. While those that claim magic circle status are receiving instructions on some mammoth cases, many other barristers are feeling the effects of the downturn.

Management reshuffles, strategic direct access schemes and increased marketing are all being embraced by chambers in a bid to survive and excel in the new age.

The three-way merger between Manchester set St Johns Building, Liverpool’s India Buildings Chambers and Sheffield’s Paradise Chambers in 2011 was a sign that consolidation had arrived at the regional bar. And it was not the only set to look for safety in numbers in 2011. Around the same time York Chambers combined forces with Newcastle’s Broad Chare Chambers – on 1 December – creating the largest set in the North East.

The economic crash and the subsequent lull in instructions forced sets to think strategically about their future. The past year has seen some of those plans put into action. Kings Chambers, for instance, announced the opening of a Birmingham office in July 2012 on the back of a raid on the country’s largest set, No5 Chambers.

Plan view

The move came as Birmingham’s St Philip’s Chambers announced the exit of chief executive Chris Owen, who had joined it in 2009

after it created the position for him. Owen came with a wealth of experience, having spent the previous eight years working as a consultant to the bar and before that as senior clerk at London set 7 Bedford Row.

Senior clerk Joe Wilson has stepped into the breach and is managing the set as it puts the finishing touches to a new growth plan. As The Lawyer went to press, the set’s management committee was giving its final approval to the strategy and an announcement on it is expected imminently.

For Manchester-headquartered Kings Chambers, the move into Birmingham was an opportunity to take on some competition and spread its geographical reach. Head of chambers Nick Braslavsky QC ruffled his competitors’ feathers in Birmingham when he declared in July: “There’s obvious disenchantment with chambers that have huge numbers of people who are not providing that service.”

The set hired senior clerk Gary Smith from No5 to lead the venture with Anthony Crean QC and Sarah Clover, both formerly members of No5. According to senior clerk Colin Griffin the office has been performing well.

The set had wanted to widen its geographical reach and put itself on the doorstep of the city’s lawyers.

“Trial work is down across the board,” Griffin says. “The rationale for the new office was that we needed to enlarge our catchment area.”

The increased competition in Birmingham led to a marketing offensive from No5, which wanted to reassert its position as one of the UK’s largest sets. Chambers moved into new premises in London and added a new office in Leicester.

Senior clerk Tony McDaid, a stalwart of the bar, believes that chambers will open a new base in Manchester in the next 18 months as well as a sister company to help manage instructions. No5 is a staunch believer in organic growth although, with alternative business models on the horizon, that could all change in a few years. But more of that later.

Others at the bar are looking for growth through lateral hires. When Bristol-headquartered Guildhall Chambers launched its employment practice last February, it did so after adding a team of five from Queen Square Chambers.

This included the head of Queen Square’s employment group Nick Smith and his team of Debbie Grennan, Julian Allsop, Douglas Leach and Allan Roberts.

“The acquisition of five employment practitioners not only fills a gap in Guildhall’s specialist services strategy, but also satisfies demand from our solicitors and lay clients,” said chambers head Peter Blair QC at the time.

A year on and senior clerk Justin Emmett says the set is witnessing a rise in employment-related cases as well as whistleblowing claims.

Queen Square responded later in the year by opening an office in Cardiff (2 October 2012).

“The advent of ABS [alternative business structures] and the trend towards work being concentrated in the hands of fewer bulk providers has emphasised the importance of having the ability to service work over an ever-wider area,” commented head of chambers Christopher Taylor on the move.

Like many of its counterparts, it has seen a big drop-off in revenues from publicly funded work across its civil and criminal practices.

Aid hindrance

In April the Government’s decision to cut £350m from the legal aid budget will come into effect. It is not lost on the regional bar that this key policy decision has been much trumpeted by justice minister justice Chris Grayling.

Only last month Grayling told BBC Radio 4’s Today programme that silks should not be instructed to defend suspected criminals when legal aid is granted.

“The question is – can we really afford so often to use people who are paid such an additional higher rate compared with somebody who’s nearly as experienced, who’s a seriously competent barrister, who will become a QC one day if they choose to do so?” he said. “The reason I’m starting this discussion […] is that in some cases we’re spending £500,000 or more on legal fees.”

Some at the bar were apoplectic at the comments, claiming Grayling was in effect endorsing a two-tier system whereby only the richest of accused criminals have access to a defence led by a QC.

Furthermore, the £500,000 spend is agreed by a civil servant before the instruction is confirmed and, more often than not, will be a salary for a case lasting more than a year.

Sets that straddle civil and criminal law are feeling the pinch more than most. In Birmingham No5 is seeing a drop in the number of criminal barristers applying for tenancy, while Exchange Chambers in Manchester reports a similar pattern.

“In some areas people will be denied access to justice,” comments McDaid. “People have a right to be defended but some people are being squeezed out [of the justice system] because rates are dropping to such an extent that the bar just won’t be able to do it.”

The most visible impact has been at the junior end of the bar, says McDaid.

“As far as we’re concerned the junior end of the bar is suffering and society will as well,” he says.

Many sets are looking to build direct access instructions to combat the legal aid decline. Like Queen’s Chambers in Bristol, sets across the board are seeing the creation of chambers panels.

This was keenly felt in Bristol when Co-op Legal Services (CLS), the largest company to be granted an ABS licence, created a roster of barristers’ chambers it will use for family work after launching a fixed-fee service in September.

Manchester-headquartered St John’s Buildings and Nottingham-based St Mary’s Chambers were instructed in the North, while 3PB picked up the remit for Bristol and London, alongside 4 Paper Buildings and 14 Gray’s Inn in London. 3PB head Ian Lawrie says the arrival of CLS in Bristol has had a huge impact on the market.

“Solicitors are much keener to work collaboratively with us,” he says.

Share option

The same is true of Birmingham, where No5 has put together a working partnership with Regulatory Legal Services, a boutique established by former Shakespeares partners Paul Crutchley and Gareth Fatchett.

“The future of legal services will be shared,” McDaid says. “The naffest word dreamt up by the Bar Council is ‘ProcureCo’ – what a load of old tosh. There will be a number of co-existing models – individual sets, sets that employ solicitors.”

For No5 the immediate future will see the establishment of a sister company to help the set manage the incoming referrals. McDaid explains that the company will be a “quasi-referral company that creates leads for chambers and has capacity to create leads for solicitors”.

He continues: “There’s a lack of knowledge about where to go to instruct a solicitor. We have a wealth of experience in the clerks’ room as to where people should go to get advice.”

The concept of ABS is not lost on 3PB, and Lawrie says the set is open to suggestions.

“I wouldn’t say we’re keen, but it may be necessary,” he says cautiously, adding: “You have the freedom to punch above your weight when you think about ABS. We don’t shut our eyes to it.”

Ahead of that the set is looking at whether it too should establish a corporate structure, a service company that will handle the financials.

“If we have to borrow to invest it can’t go through me as head of chambers,” says Lawrie.

Regional sets have a loyal client base but collectively they understand the bar needs modernising. Many predict there will be further consolidation as the bar contracts and only the best, most efficient chambers will survive. There are plenty of opportunities in the pipeline – it is the sets that make the most of them that will thrive.