Law Society's big joke on small firms
26 May 1998
9 September 2013
6 November 2013
18 September 2013
27 November 2013
4 August 2014
Dugald Sproull is senior partner at Sproulls Solicitors in Cornwall. Dugald Sproull speaks out on behalf of the high street firm, and gives out a warning that, unless the cries for the plight of the smaller practice are heard, it may become a dying breed.
I suspect there is a secret agenda to put the small high street solicitor out of business. If there is not, then the Law Society has a strange way of showing us any support.
For a start, the SIF shortfall of £465m has to be funded. A Law Society council member tells us that a small firm with gross fees of £125,000, doing high risk work, may have to pay 30 per cent of its gross fees in SIF premiums. As this figure is likely to be approximate to the firm's profit, the firm would be wiped out forthwith.
Then there are domestic conveyancing fees that are being driven down week by week.
We offer the public the backing of SIF and our conveyancing fees are the lowest in Europe. The cheapest defective title indemnity policy premium is about £250. That proportion of conveyancing fees should be charged for the backing of SIF, whereas many firms are charging a total of less than £250.
Meanwhile, we continue to give banks and building societies guarantees that they will never lose any money on domestic lending. We sign certificates daily giving them our assurance that everything is perfect so that they have the protection of SIF. The biggest joke is that we do it for nothing!
The hourly rate for green form legal aid, coupled with the unchargeable hours which we have to spend to comply with the franchise requirements, makes it questionable whether it is worth doing the work.
The only way to make it profitable is to get unqualified staff to handle the file which will, in the fullness of time, increase the claims on SIF.
Most of the hours that we have spent organising our firm to get a legal aid franchise have been poured down the drain because of the proposed changes in the legal aid system.
We are not going to be allowed to do medical negligence work unless we are on a panel and I suspect that this is but the thin end of the wedge.
The Law Society continues to spend our money. All it seems able to do is set up committees to have endless discussions, reaching no firm conclusion about anything.
A good illustration can be found in the Gazette last March, where we read that the president has "set up a working party to consider the society's response to a customer focus research report that recommends improvements in the way the society serves the profession". What on earth does this mean? As we are about to go out of business, it has managed to set up a regional office in Bristol with a paid director.
And the OSS is an expensive joke, hell bent on encouraging sundry nutcases to complain about us and being the most inefficient body I have ever had the pleasure of dealing with.
Unless somebody is prepared to stand up and do something, the death of the small high street firm is imminent.
It would be a good start for the Law Society to decree a minimum fee for domestic conveyancing matters of at least £500. Conveyancing firms need to become more profitable if they are going to be able to afford their SIF premiums.
No doubt one will hear 101 reasons why the Law Society is not able to do this, the OFT et al. It is too late to start worrying about such niceties. After all, the Government does not worry about having consultations before announcing its intentions for legal aid.
If the Law Society will not do something then I suspect that it is time to retire. On retirement, one is not left to pay any of the £465m SIF shortfall. Those silly enough to continue in the profession will be paying my share of that.