The Lawyer UK 200 preview: The Bar: Rate cuts dampen litigation boom
15 August 2011 | By Katy Dowell
13 October 2011
The UK200 2011
17 September 2010
26 July 2010
1 October 2012
Leading chambers are learning to live with rate pressures and demands for more direct access, says Katy Dowell
As London’s top sets ride the litigation boom they are also having to face up to the realities of working in a changed commercial environment, where economic pressures are more intense than ever.
Growth has slowed marginally for the top 10 in the past financial year. During 2008-09 the top civil sets collectively turned over £346.5m. This figure increased by 8.6 per cent to £376.3 in 2009-10 and by 7.3 per cent to £404m in 2010-11.
Yet there has been little movement in chambers’ rankings. Only Blackstone Chambers, with its broad base that stretches from commercial cases to the public sector, moved up the table, posting a turnover of £42.4m to take fourth place from Fountain Court, which had a turnover of £41m.
In terms of revenue per barrister (RPB), Fountain Court comes third after Wilberforce Chambers, which benefited from its stellar pensions practice, and 7 King’s Bench Walk. Fountain Court posted £719,000 for each of its 57 members while Wilberforce posted an RPB of £800,000 for 50 members and 7 King’s Bench Walk posted £727,000 for 48 members.
Ahead of all three sets in terms of turnover are One Essex Court and Brick Court Chambers. The latter pipped the former to the top spot with a turnover of £47m, up by 10.6 per cent from £42.5m, beating One Essex Court’s £46.5m, which was up by 12 per cent from £41.5m.
Neither set managed to eclipse Fountain Court or Wilberforce in terms of RPB. Brick Court, which is home to 37 barristers and 36 QCs, including one of the country’s most highly paid silks - Jonathan Sumption QC - produced an RPB of £644,000 compared with £637,000 for One Essex Court, which has 47 barristers and 26 silks including Tony Grabiner QC.
These sets continue to dominate the bar, pulling in some of the most lucrative cases around. According to One Essex Court senior clerk Darren Burrows, it has been another “record year” thanks to several high-value cases reaching the appellate courts and the rise in international matters.
The unwinding of the global banking markets, which began with the collapse of Lehman Brothers in September 2008, is now being scrutinised by the courts.
Cases regarding allegations of international mis-selling and fraudulent activity on a global scale are being argued around the globe by leading domestic barristers.
According to Fountain Court director of clerking Alex Taylor, the bar continues to attract instructions from abroad because its expertise in banking and finance law outranks its peers’.
“Fountain Court, Brick Court Chambers, One Essex Court, Essex Court Chambers and 3 Verulam Buildings are the go-to sets for banking and finance litigation,” he says. “It’s because of our reputation in this field and our banking and finance heritage. We’re in a very fortunate position.”
That said, Taylor recognises that the downturn has meant that clients are taking more control of their finances. While rates might not be down significantly in more specialised areas such as complex financial disputes, there is a sense that disciplined financial management is becoming the norm in litigation.
“All companies are looking at legal spend,” agrees Burrows. “There was a big intake of breath in 2008 when firms were asking for rate cuts and everyone was running health checks to make sure their spend was sustainable.
“There was real pressure and clients wanted flexible rates. In some areas that’s continued, in others it’s subsided.”
What is clear is that clerks are expected to deliver more for their solicitor clients. Traditionally, sets would send out bill estimates on a quarterly basis, but demands for weekly estimates are starting to creep in and monthly billing, according to one clerk, “is not unusual”.
Taylor says it is a positive change that has created better financial management internally. Blackstone senior clerk Gary Oliver agrees that there has been a concerted effort to tighten up when it comes to collecting payments.
“Our eyes were wide open when Lehman went under - we have to realise our cashflow,” he comments, adding that remaining flexible is the key. “Some people still like hourly rates and some who are doing largescale litigation will agree a brief fee paid in instalments.”
With the set’s public law expertise, Blackstone’s barristers are often instructed by regulators in disputes. Most recently, Dinah Rose QC acted for Ofcom on its dispute with BSkyB and Monica Carrs-Frisk QC was instructed by the FSA on its dispute with the British Bankers’ Association over payment protection insurance.
According to Oliver, in these cases “bills are sent out and paid within a month”.
Pressure on rates is also driving direct access instructions to the bar. This is a phenomenon that unnerves barristers because it pitches them squarely against solicitor clients for work.
“There’s been more demand from in-house counsel and more bar panels have been created,” one clerk says, “but it hasn’t been a revolution. We’re always careful about direct access instructions - we don’t want to upset regular referrers by taking work away from them.”
Rather than shying away from direct access instructions, some sets are using their relationships with in-house counsel to shift the power balance between the firms and the sets.
Wilberforce first junior clerk Danny Smillie says: “The bar’s had to adapt and become more commercially minded and accessible. Barristers are expected to be part of a team, and be more involved in all aspects of case management and client relationships.”
Despite the bar’s wariness chambers can benefit from direct instructions, and it puts them in an enviable position when it comes to referring work back to solicitors.
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