Portrait of a legal revolution
27 January 1998
As well as the usual pressures of work, litigation departments have to cope with a deluge of reforms, reports Bibi Berki
Mention the name of Lord Woolf to a group of litigators and the responses you get will come thick and fast. 'It's a massive period of change'; 'Woolf will affect everyone'; 'It's a huge change of culture'; 'It's potentially life-threatening'; 'It dominates everything.'
Lord Woolf's efforts to speed up and reform the civil justice system have set the cat among the pigeons. Lawyers are divided between those who think his proposals are sensible and those who sense doom.
But to think that Lord Woolf is the only disturbance in litigators' otherwise hard-living and high-earning lives would be a mistake.
The revolution comes in many forms: conditional fees are a major bogeyman; clients are said to be evolving into more sophisticated and therefore more demanding animals; a handful of litigation partners is being singled out as stars by the media; solicitor advocates are here to stay; and the divide between big City litigation departments and their smaller cousins is a further worry.
Litigation as an area of practice has never exactly been a stagnant pond. Before the 1980s it was seen as a loss-making part of the business. Then, as the property side declined, litigation started to flourish.
Paul Bowden, a litigation partner at Freshfields, says the discipline's fortunes have fluctuated traditionally according to the boom and bust of the British economy.
When times were good, mergers and acquisitions work flourished. When things got tight, the litigation departments came into their own. It was the season for big writs, and cases would last four to five years to tide firms over into a slacker, post-recessionary period.
But, says Bowden, litigation departments are still holding their own after the recession. It seems that although there has been an economic upturn, there has been no concomitant slump in litigation work.
On top of all these developments, the litigation department has had to cope with a number of other pressures as well, not least the demand on firms to control their fees.
'People are getting much more creative and more demanding,' says Bowden. 'Firms have to be prepared to be more creative with their fee structures such as blended rates for partners and assistants and caps on rates at a particular point in a case. There's a greater demand to bring costs down.'
He says a number of the bigger practices have increased in size at a time when the profession would have expected stability or retrenchment, whereas it seems that some have decided deliberately not to invest in the growth of their litigation practice as a matter of policy.
'Over the past few years litigation has become much more of a commodity service,' says Bowden.
In addition, he says there is a growing division between a so-called 'premier' league of about five litigation firms in the City and a 'first division' made up of about 15 others.
This is the current state of flux on which the Woolf reforms will be imposed.
'You can't talk about the future of litigation without talking about Woolf. That dominates everything,' says Bowden.
He adds: 'I'm surprised there isn't more proactive planning by some of the firms. Quite a large number are not being desperately proactive. Woolf can only do one thing and that's drive down costs. There is one view among some of the big City lawyers that we are not going to be affected by Woolf.'
Among the perceived threats of the Woolf reforms is the granting to judges the power to tailor proceedings according to costs. Judges will also be able to front-load cases that is, to give clients the chance to settle early. That means that the days when hearings ran and ran and costs ran higher will come to an end. Cases will last about 18 months, rather than the traditional four to five years.
'There's a massive potential fall in fee income,' says Bowden. 'It's potentially life-threatening and it will affect the big five much much less.'
Tim Aspinall, managing partner and head of litigation at Donne Mileham & Haddock in Brighton, describes the period as 'a fundamental change of culture'.
'Traditionally, litigation has been done at a pace that suits the law firm, according to Woolf,' he says. 'Courts are now trying to fix the timetable and trying to force litigators to stick to it.'
Cases and those working on them will have to be better managed, adds Aspinall. 'Most people accept that there is going to be change. Some will see it as a threat to their firms because of the fear that they will not be able to make a living. But then there will be a small number of firms like us who have been planning for those changes for a number of years.'
Not everyone sees Woolf as an omen of disaster or even particularly significant. Antony Gold, head of litigation for Eversheds, says: 'I'm beginning to think that for commercial practices at least the impact will not be that great.'
This, explains Gold, is because a lot of the work involved in contentious cases is not actually court-bound, but carried out via negotiations and correspondence. 'The much more serious issue is conditional fees,' he says. 'What really worries me is the cultural impact it's likely to have.'
Gold adds that conditional fees will create 'joint-venturing problems'.
'The scope for conflicts of interest are legion because what the lawyers will be interested in is a fast turnover and a quick fee but the client might prefer to wait and receive a much larger sum,' he explains.
Litigation teams will fight back by deploying a whole new range of tactics, says Gold.
If Bowden is right and a handful of major firms emerge to dominate the market then it is highly likely that Herbert Smith, Lovell White Durrant and his own firm, Freshfields will be at the helm.
He and his fellow litigators will have to contend with the cult of personality which is giving solicitors in the litigation field the kind of publicity that previously only barristers enjoyed.
Solicitor advocates are still a novelty and are considered to be far down the 'changes to litigation' list. However, there is evidence that top litigation departments are taking more work in-house. Linklaters, for example, is handling cases normally taken on by high street firms simply to allow its litigators to get the necessary advocacy experience. These cases are being taken on on a pro bono basis.
There are all sorts of other potential changes and one of them must inevitably relate to gender. Of the 57 leading London litigators listed in the 1996-97 Chambers & Partners directory only three are women.