The barristers' profession
Although the number of barristers continues to grow (it now stands at more than 10,000), the rate of growth is slowing down; it hit 2 per cent in 2000 from 2.4 per cent in 1999. The average annual growth rate between 1986 and 1998 was 4.8 per cent. It is widely anticipated that growth rates will continue to fall, leading to a levelling out in numbers, and in the future a reduction in the overall size of the bar.
Given the particular pressures on those practising in criminal and family law, it is expected that these areas will be hardest hit in terms of loss of personnel. That much of the regional bar continues to lack genuine specialisation is also a cause for concern. The lower growth rates are certainly more noticeable at the bar, but do reflect the evidence from the solicitors' profession, where growth rates in 2000 fell to 4.1 per cent from 5.9 per cent in 1999.
Encouragingly, the proportion of women practising at the bar continues to rise, up to 39 per cent of barristers of 1-10 years call. As an overall proportion, however, women make up 28 per cent of the profession, up just 2 per cent from 2000.
Growth and consolidation of chambers
According to the Survey of Barristers' Chambers 2001, undertaken by BDO Stoy Hayward, there has been an increase in the average number of members in a chambers, from 16 in 1986 to 28 in 2001. One of the principal reasons for this is there are many more barristers moving laterally between sets, generally migrating to bigger chambers.
The survey finds that the rate of 'turnover' is 7 per cent; in other words, a barrister moves once every 14 years. This compares with 5 per cent in 1999, when on average a barrister moved once every 20 years. One driver for this is the growing financial burden on practitioners. For example, chambers contributions – the amount of a barrister's earnings paid to cover the chambers' overheads – can range from 10 per cent up to 25-30 per cent. The varying amount is driven partly by the growing amount of resources being dedicated to administration, business development and IT. The average cost of overheads has risen to 17.4 per cent, up from 17 per cent last year. In a successful common law set with about 50 tenants, for example, total overheads (with staff salaries making up about 50 per cent of the total) can be as much as £1m per year. In successful commercial sets it can be even more. The average cost to an individual barrister, whatever the percentage charge, varies enormously across different areas of specialisation. Commercial barristers, on average, are charged £34,000, while the family practitioners' average overhead charge is just £14,500.
Another reason is the way in which barristers and chambers market themselves and the demands being placed on them by clients. “Strength in depth” is the hackneyed expression trotted out by many instructing solicitors when discussing their requirements of the bar. If their first choice is unavailable, clients want a choice of two other barristers of equal quality. This is particularly true of volume work, for example in professional negligence, where insurers have chambers panels in just the same way as they do with solicitors' firms.
Management of chambers
Despite many of the leading commercial sets reverting to a traditional clerking framework, the employment of practice managers and chief executives continues to increase across the bar as a whole. Nearly a quarter of chambers now give responsibility for day-to-day management to a practice manager, again adding to the overall cost of running chambers. The number of senior clerks with overall day-to-day responsibility has fallen from 56 per cent in 1999 to 45 per cent in 2001.
For many smaller sets specialising in crime and family, the necessity of securing BarMark is another costly adventure. There are now 35 chambers with the so-called 'quality mark', up from just seven in 2000. While 59 per cent of respondents to the survey intended to apply for BarMark by the end of last year, just 42 per cent said that they would be applying before the end of this year. While BarMark or the Legal Services Commission's new Quality Mark are likely to be essential for chambers wishing to handle publicly-funded work, among commercial sets it is widely viewed as an irrelevance.
One important element of compliance with the requirements of BarMark is the quality of a set's IT infrastructure. It is worth noting that, according to the survey, of the two main IT software providers to the bar – Ace and Meridian – the latter has gained ground on its rival over the last two years.
The survey also identifies the changing nature of chambers' legal structures. Chambers are increasingly operating through a more formal legal identity, such as a service company.
Economics of the bar
The estimated overall turnover of the independent bar has risen from £1.3bn-1.5bn last year to between £1.4bn-1.6bn this year. This is a fairly modest increase, especially when compared with the sets comprising The Lawyer's Bar Top 30. This found that the total turnover of the country's top 30 sets was £406m, with most posting significant increases. One Essex Court's turnover, for example, was £27m, with average revenues per barrister a staggering £500,000. Although this is up just £3m on last year's figure, in real terms it represents a much more significant increase when accounting for the losses of six senior tenants with combined earnings in the region of £5m.
In terms of sources of work, little has changed from last year. There is a slight drop in work referred from solicitors, now contributing 54.3 per cent of the bar's work, down 1 per cent on 2000. A total of 75 per cent of participating chambers achieved an increase in receipts per member. Increases for commercial barristers rose above an average of £200,000 for the first time, with commercial and chancery increasing at a greater rate than criminal and family. According to the survey, a typical barrister spends 17.4 per cent of their gross receipts on chambers overheads and 10.8 per cent on personal overheads, leaving a net income of 71.8 per cent of gross receipts. From this, a further 14.4 per cent should be deducted for pension contributions and another 18.3 per cent for tax and National Insurance. The net income, therefore, equates to 39.1 per cent of gross receipts for the average barrister.
Analysing net receipts by looking at different call bands, the upper quartile of the 5-10 years call band has risen most dramatically, to £78,900 from £69,200. The estimated meridian net income for a senior junior of more than 10 years call is now £80,900, compared with £71,800 in 2000.
In terms of the cost to users, average chargeout rates for the junior bar continue to be around half that of junior litigators in solicitors' firms. However, the chargeout rates for silks are roughly the same as for experienced litigation partners.
Despite the bar's propensity for navel gazing and general pessimism, comparing predictions from the 2000 survey with what has actually happened shows that the bar, if anything, is overconfident. The proportion of chambers predicting growth was slightly more than the proportion that actually saw growth, while the number of chambers that actually decreased in size was far greater than predicted by the survey's respondents.
According to the survey, the threat of solicitors taking work in-house remains the bar's biggest problem, with the next biggest perceived threat being the employed bar being granted rights of audience.
The barristers' profession