The Legal Aid Board has acknowledged that the franchising of legal aid is too bureaucratic and needs reform.

Speaking at the Legal Action Group conference on legal aid franchising last week, Sir Tim Chessells, chair of the LAB, admitted the current system was imperfect and outlined the board's plans.

He acknowledged criticism that the system was too bureaucratic and expensive and did not measure quality. He added that “the franchising process needs to be improved and developed to make it a more effective quality assurance system”.

The LAB plans to introduce measures to revise and update existing transaction criteria and to incorporate Law Society accreditation and specialist panel needs into the franchising system. Failure to comply with outcome measures, assessing the results of cases, said Chessells, would be used as a signal to carry out a more detailed investigation which may lead to peer assessment by expert lawyers from outside the firm.

Referring to the imminent publication of the White Paper on legal aid reform, he said the LAB expected to implement different contracting arrangements for rural and urban areas.

“We expect contracting arrangements to be quite different in rural areas where something akin to the existing franchising contract, with cases paid for on an individual basis, may be appropriate.” In urban areas block contracting was likely to apply, he said.

The board says it will extensively pilot contracting arrangements over two to three years.

But practitioners are deeply concerned about the White Paper. Sally Moore, Leigh Day & Co partner and chair of the the Legal Aid Practitioners' Group's Franchise Users Group, said although franchising had aided practice management, its merits were “overshadowed by the looming storm clouds of block funding”.

She said firms faced either franchising or phasing out legal aid work and voiced fears that “a ration scheme will replace the current merits scheme”, that “cherry-picking cases will be inevitable” and that price would become the main factor in awarding contracts.

“What we want are efficient firms who can give specialist advice – with franchising and specialist panels we're moving towards this. To make block contracting pay there will be a shift to quantity not quality.”