Law firm chambers: the model setup for the 21st century or just a gimmick?
21 May 2007
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3 September 2007
Herbert Smith's 'in-house chambers' has just celebrated its second anniversary and in recent months has had more than a few legal tongues wagging.
The chambers, which was the brainchild of senior partner David Gold, launched in May 2005 with the hire of Murray Rosen QC, previously of 11 Stone Buildings, and Ian Gatt QC, formerly of Littleton Chambers.
At the time the advocacy unit caused waves across the profession, with many predicting that it would never last. Lawyers who opposed the move claimed the unit could not provide all the services of an independent chambers and that it was simply a gimmick designed to draw in clients. Also, the decision to create a general commercial chambers saw Herbert Smith lose one of its high-profile solicitor-advocates Ronit Kreisberger to Monckton Chambers, as she wanted to continue working in her fields of expertise rather than become a generalist.
Her exit seemed to prove the critics right, but two years on Herbert Smith Chambers is still standing. While chambers does not provide a full service and still goes to the bar for specialist issues such as IP, the unit has more work than it can sometimes deal with.
Sonya Leydecker, head of litigation at Herbert Smith, says the advocacy unit allows the firm to offer clients a much better service because it saves money and time.
"With these benefits I can see other firms perhaps trying the model," says Leydecker. "But very few have the capability to do it, as they'll need a large litigation practice from where they can refer work on to the advocacy unit."
The 'Herbert Smith model', as it is known, consists of three partners - Rosen, Gatt and solicitor-advocate Adam Johnson. In addition, around three associates are permanently attached to the set, while another three or four are seconded from other practice areas, with any skills they gain carried back to their own practices.
Eversheds has also taken the plunge, hiring Tom Keith, formerly of Fountain Court Chambers, to head its advocacy unit.
Keith says the nine-month-old department is thriving, having been instructed personally on 70 cases in the last seven months, and the firm has advertised for more barristers to join.
There is one snag though. Gatt and Rosen had to relinquish their membership of the bar when they joined Herbert Smith as partners, although Keith kept his barrister status when he joined Eversheds.
"They had to leave the bar because of the restriction against barristers practising in partnerships, which is a shame as they were a loss to the bar and I hope that at some point these restrictions will be removed," Keith says.
Some raised concerns that, if the Herbert Smith model takes off in a big way, under the current rules it could be detrimental to the bar. However, Stephen Allen, chief executive at Seven Bedford Row, says that so long as specialist expertise is required, the bar will survive.
However, there are issues over conflicts of interest. "Say the law firm represents a company and its senior management," Allen says. "If there's a money laundering issue then these two groups' interests are at odds with each other. It would be necessary for the firm to have independent advocates if they want to keep both clients happy.
"Due to the barristers being partners in the same firm it means they can't act against each other. So the firm would have to choose whether it represents the company or the senior management. If it chooses the wrong one it could potentially have lost a client.
"For the bar the situation's more simple, as even within the same set of chambers all practitioners are independent of each other, so members of the same set can go up against each other."
So will any other law firms follow Herbert Smith and Eversheds?Top City firms are keeping a close eye on Herbert Smith and are understood to be considering the advantages and disadvantages of launching their own chambers.
Clifford Chance is understood to be considering a dedicated unit, but is looking for the right calibre of lawyers.
Jonathan Sacher, head of litigation and dispute resolution at Berwin Leighton Paisner, says that, although he can see the benefits, his firm is unlikely to follow the Herbert Smith model. "Although there are many advantages to the structure of the split English profession, I can see real difficulty with maintaining that structure in the 21st century, with a government that's determined to break down barriers and international clients who are looking for service and value rather than tradition to meet their needs," Sacher says. "To maintain their leadership position in English litigation, UK law firms will need to be able to compete with US firms' large trial law departments when they seek to transfer those skills to London. One route for English law firms may be to create tied relationships with certain sets of chambers, which may create a quasi-partnership but not full control."
It is not only national firms that are looking at the benefits, with Russian law firm Egorov Puginsky Afanasiev & Partners considering making the move in its recently launched London office.
Dimitry Afanasiev, co-founder and managing partner of Egorov, says: "It's irresistible to be able to tell clients we can actually go to court on their behalf and to say, 'this is the person in our office who'll be up before the judge'.
"Merging barristers and solicitors into one firm American-style is the way of the future - the question remains how distant that future actually is."
So it seems that, where Herbert Smith has gone, at least some will follow. The bar, however, can rest easy for the moment. Its services are still needed.