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Barclays has revealed today that it will not appeal the High Court’s ruling on payment protection insurance and has set aside £1bn for customer redress.

The news comes as the British Bankers Association today reveals that it will also not appeal the decision made on April 20 2011.

Barclays has also agreed with the Financial Services Authority that it will now begin to process all on-hold and any new complaints from customers about PPI policies that they hold.

Bob Diamond, chief executive of Barclays, says: “We have taken this decision because it is in the best interests of our customers, as well as for Barclays and its shareholders; creating certainty, particularly regarding past issues, is of benefit to all parties.

“We don’t always get things right for our customers; when we get them wrong, we apologise and put them right. That’s our commitment to our customers, and it applies to the way in which we will deal with PPI complaints.

“While important aspects of the handling of PPI complaints, and therefore the cost of doing so, are not yet certain, Barclays is taking a provision to cover the cost of future redress and administration of £1bn in the second quarter 2011.”

The BBA was given until May 10 to appeal the decision.

But in a statement today, it says: “In the interest of providing certainty for their customers, the banks and the BBA have decided that they do not intend to appeal.

“We continue to believe that there are matters of important principle which we will be taking forward in other ways with the authorities.”

Lloyds Banking Group revealed last week that it had set aside £3.2bn to deal with PPI complaints.

http://www.mortgagestrategy.co.uk/protection/barclays-sets-aside-%C2%A31bn-for-ppi-claims/1030627.article

‘The first rule of IT is never adopt early – let someone else suffer the pain before you put your hand in the bathwater,’ advises Luigi Salzano, Pannone’s IT development manager. ‘When a product is new to market, it is incredibly foolish to implement it straight away.’

Mercedes Cyprus

He adds: ‘In general, legal IT suppliers are desperate to get their software out into the marketplace because they operate in such a niche market with relatively low margins, so versions one and two may well be incomplete. Wait until the teething problems have been ironed out before you make your move.’

Bearing that ‘rule’ in mind, which IT products are law firms and in-house legal teams currently considering to support their legal services? This is an especially topical question as lawyers consider the concept of cloud computing – putting more services on the web outside the norms of PCs and servers.

Fewer, bigger providers
Consultant Neil Cameron has been advising law firms on strategic and tactical IT issues since 1986. He recently carried out a survey of law firm spending and found that, over the last two years, most firms had delayed projects, but are now talking about restarting them in 2011.

He says the recession forced the market to consolidate, leaving the main players such as Thomson Reuters, LexisNexis, IRIS and Tikit, who have been ‘hoovering up’ IT products. ‘This is probably beneficial,’ he says, ‘as the market was too fragmented and some of the smaller software houses didn’t have the resources to spend on R&D to keep their products up to date.’

Cameron says there are different families of products for different types of law firm. ‘The large, multinational law firm will have to buy Elite, Aderent or SAP. The middle-sized firm will be looking at LexisNexis or IRIS, while the high-street firm will be buying Perfect Software. To put it in perspective, some of those systems will cost £1,000; others will cost half a million pounds just for the software.’

The legal market is attractive to suppliers because it is small and identifiable, but there are high barriers to entry. ‘Lawyers resent paying money for software,’ Cameron notes. ‘They argue about the price and then they whinge like hell when they think it doesn’t work – half the time because they haven’t spent enough on training.’

Law firms certainly provide as good a test environment and as demanding a client base as you will find, says Derek Southall, head of strategic development at Wragge & Co. ‘They punch above their weight in terms of the kudos they bring to a product if they take it,’ he adds. ‘And if a supplier can sell a product to an in-house lawyer responsible for mitigating risk and driving compliance through their business, it can act as a great Trojan horse to get their product pushed out into the wider business.’

Southall chairs the Legal IT Innovators Group, which publishes standards and guidance papers for law firms and their clients. The problem for law firms is not fear of change or innovation, he argues, but ‘the sheer volume of options out there in the market which you need to work through to find the right strategy to meet your needs and the diverse needs of your client base’.

So what are law firms doing? Two innovative practices are happy to outline their IT programmes for Gazette readers.

Pannone is planning a complete desktop refresh next year, with: Office 2010; Microsoft’s Sharepoint 2010; LexisNexis’ new matter management system DNA, waiting until they were happy it had matured sufficiently before using it to upgrade their Axxia system; and Windows 7. Salzano explains: ‘The first three are about improving efficiency. As we are rolling out a swath of new systems, we decided to update the operating system as well, given that Windows XP is approaching end of life.’

They are also putting in a hosted client access solution. ‘Microsoft will host a Sharepoint solution for you – it is not free but it is cheaper than buying all the hardware and software and it gives us complete security of continuity of service.’

The firm uses Interaction for client relationship management, which LexisNexis will integrate with DNA. ‘Interaction gets excellent results, though that is dependent on the data that goes in. We also use a Tikit module called Reaction, which allows you to leverage the data you hold in Interaction to send out mail shots to clients, which adds lots of value.’

The firm uses Epoq’s Rapidocs software for intelligent drafting and co-authoring documents with their private clients. ‘We have also looked at Hotdocs,’ says Salzano, ‘which is a fun bit of software that can run through Sharepoint. The software “interviews” clients and they can interact with the documents and see the changes as they work on them.’

Optima Legal is the UK’s largest volume legal firm specialising in property, legal recoveries and litigation. It has grown through acquisitions, which has meant inheriting a number of different systems.

IT director Steve Nattress explains: ‘Systems which have been developed within one environment needed ­rethinking in a multi-site, multi-jurisdictional business. We have spent two years developing a new solution, using the tool set provided by the Singularity business process management system, and using our internal resources to build a new platform.’ He adds: ‘The key was to develop a system that worked effectively across a multi-site environment and introduced a workflow capability. We are almost at the point of rolling it out and we are likely to use it for the majority of the property products we bring to market.’

This has, Nattress believes, proved ‘transformational’ in terms of the ability it gives the firm to continue meeting client requirements for turnaround times.

The firm has installed the Salesforce customer relationship management system as a cloud application. ‘It is a great product,’ says Nattress. ‘It took some learning to get the best out of it, as you have to put in consistently good quality data. We deliberately chose to keep it simple and not to integrate it with our case management systems, though that remains an option.’

They also use two third-party packages: Liberate, supplied by Linetime, for their debt products; and in their Scottish office, Visualfiles supplied by LexisNexis.

Kit for clients
In the in-house sector, key demands are for management information, e-billing, and matter management systems, with the main suppliers including Datacert, CT TyMetrix and Serengeti.

Southall observes that Sharepoint is now being used in an increasing number of legal departments to manage matters. ‘It is often in the company’s enterprise licence so you don’t have to ask for more budget to get your hands on it. It is very adaptable, with a workflow and collaboration tool. It can also provide an intranet and document and email management system.

‘I am not on a commission from Microsoft but it genuinely stacks up,’ he maintains. ‘If you were starting a law firm from scratch, you would look at this very carefully for your document management system. With Microsoft being one of the largest cloud providers, using Azure and 365, it potentially brings huge cost benefits and flexibility.’

Another product type which is gaining traction is intelligent drafting, which is increasingly being used in areas such as divorce, wills, employment and shareholder agreements, where solicitors often give the client a questionnaire to fill out to identify the key issues.

Epoq’s Directlaw platform uses Rapidocs online document automation software, backed up by sophisticated legal document content, to produce accurate first drafts.

Grahame Cohen, Epoq’s founder and chief product and technology officer, explains: ‘It offers flexibility for clients. They are given access to Directlaw’s questionnaires from the law firm’s website to fill out in their own time. The form updates as they fill it in so they only have to answer questions relevant to their situation. It almost goes back to the days of the scrivener who would take down the key information for the first draft which they would then hand to the solicitor.’

There is a misconception that ‘online’ means cheap, he says. ‘This is nothing to do with cheap. Firms that successfully use this technology are not trying to compete on mass low price. They are using it to maintain their competitiveness by reducing the amount of time it takes to complete the work, thereby radically increasing their recoverable hourly rate.

‘The system can issue the bill online which can be paid by credit card, so it reduces the cost of doing business. It also handles compliance. When the client returns the document it takes them through a Rule 2 process which saves time and cost.’

Another area that firms will need to investigate if pressure builds from clients is e-billing.

Corporates and consumers of legal advice want e-billing, says Cameron, because it gives them the power to manage and control their legal spend. They can compare the value they get from law firms doing similar work, while the system will reject any bill which is not compliant, even if it is an innocent mistake. ‘Why would law firms want to help them do that? But, in the end, if the client wants it they will not have a choice.’

Pannone’s Salzano says it does not currently have an e-billing solution. ‘A year ago, a client threatened to take all their suppliers off the panel unless they integrated with an e-billing solution called Tradex. It was an interesting product and we were working on it when the supplier dropped the requirement.’

Cost is inevitably another key factor. However, Cameron says: ‘Business as usual’ upgrades have to take place. Most firms are looking to upgrade to Office 2010 and Windows 7. While many firms skipped a version of Windows and Office, you cannot skip two. And some may have tried to save money on their software licences by cancelling their Microsoft select agreements, so they will find it difficult to afford to move to 2010 because they will no longer have access to free upgrades.’

Some cloud provision is being supplied relatively cheaply over the web. ‘However, you need to be careful about cost, liability and how critical that service line is for your business,’ says Southall. ‘You cannot skimp on essentials. You need to know every core system has a proper contractual and support base behind it.’

Epoq’s Cohen says Directlaw is ‘very scalable and carefully priced. We work with sole practitioners to firms like Russell Jones & Walker. The base starting cost is £299 per month – on average firms are paying about £450 a month’.

For sole practitioners, scalability is crucial. Lawumi Biriyok, chair of the Sole Practitioners Group, explains: ‘Sole practitioners don’t need the entire range of the Encyclopaedia of forms and precedents, for instance, and the SPG has worked closely with people like Sam Howard at Lexis Nexis to ensure we just have the relevant bits on CD or online.’

SPG committee member Karen Purdy adds: ‘Accounts and risk management software have also been tailored by IT firms so that it is relevant and affordable for small firms. My Cognito software gets great write-ups by lawyers.’

On the horizon
So what do the experts identify as the new trends? Pannone’s Salzano says Saas (software as a service) is an emerging theme in legal IT, whereby vendors essentially offer hosted versions of their solutions. ‘The obvious advantage to this approach is low initial outlay and this might suit smaller firms, although I don’t sense legal IT Saas apps is gaining huge traction as yet.’

For Southall, Saas has merged into cloud services, with the biggest players buying up data centre space. ‘The cost and organisational advantages are becoming so great it is difficult to imagine the cloud won’t get traction in the future. It will certainly give smaller firms the opportunity to punch above their weight.’

His tips to watch are developments by LexisNexis and Thomson Reuters; the range of cloud legal services/systems being provided by third parties such as Rocket Matter, a legal productivity software; true productivity apps that dive deep into legal processes; and applications that learn from how lawyers work.

‘With the onset of the Legal Services Act,’ Southall says, ‘it is easy to identify at least 30 delivery models without any effort – the challenge will be in choosing the winners.’

Whatever your choice, Nattress sounds a cautionary note: ‘Salesmen will tell you about all the fantastic things you can do if you buy their product. What is crucial is that you meet your objectives, and you don’t overly complicate things or risk making your systems less reliable because you have tried to be too clever.’

Grania Langdon-Down is a freelance journalist

Source: http://www.lawgazette.co.uk/in-business/lawyers-and-it-solutions-age-cloud-computing

The number of people challenging the inheritance left by their relatives or partners has risen by 38% over the past year, according to figures obtained by City firm Wedlake Bell.

Data from the High Court shows that the number of cases launched by people, including children, spouses and cohabitees, who feel they have not been properly provided for in wills or on intestacy went up from 80 in 2008 to 110 in 2009.

It reveals a ten-fold increase in such cases over the last three years, increasing from just 10 in 2006.

Wedlake Bell suggests the rise in disputes is being driven by the recession, as the value of many estates slumps, combined with the growing complexity of family structures and out-dated inheritance and intestacy laws.

It says the increasing popularity of DIY will kits has also added to the risk of disputes.

Fay Copeland, a partner in Wedlake Bell’s private client team, said: ‘The recession has had a hugely detrimental impact on the size of estates with the value of family homes, shares and other assets having all dwindled. As the pie gets smaller, the temptation for beneficiaries to fight for a bigger slice increases.’

She said the scope for inheritance disputes increases dramatically with the number of marriages, divorces and children that are involved.

‘Anyone who was in some way financially dependent on the deceased at the time of death may be able to make a valid claim, so that also applies to children outside marriages, cohabitees and even mistresses,’ said Copeland.

Copeland said the likelihood of disputes becomes even higher where someone dies without making a will, because the estate is then divided according to intestacy rules, many of which where drawn up to reflect the social landscape and family structures of the 1950s and even the 1920s.

She said: ‘[The laws] make no allowance for the financial needs of dependants or the extent to which they were financially dependent on the deceased.’

The Law Commission published a consultation paper that reviewed the rules on intestacy and family provision claims on death last year. It closed in February 2010 with a report and draft bill due to be published in 2011.

A report by the National Centre for Social Research recently suggested that a change in family relationships pointed to a need to amend the current intestacy rules.

Source: Catherine Baksi – http://www.lawgazette.co.uk/news/rise-number-intestacy-disputes

Nine out of ten solicitors think they are not doing enough to promote their businesses in the face of forthcoming competition from alternative business structures, research seen exclusively by the Gazette has suggested.

A survey of 330 solicitors by law firm referral service Contact Law found that 91% thought they needed to do more to sell their services to existing clients.

Only 52% said they had cross-sold their services to clients, while 51% said they never or only occasionally made a follow-up call after providing a quote to a client.

Of those surveyed, 38% said there was a need for a sales person or team within the structure of their firm, while 14% did not think that having someone working specifically on promoting the business or cross-selling services would benefit the firm.

Contact Law director Dan Watkins said: ‘There continues to be reluctance among solicitors to proactively sell their services to the general public, but if many law firms are to survive and prosper in the ABS era, this is an area they will need to address.

‘Solicitors will need to become much more tuned in to the idea of having a dedicated sales and marketing team or person promoting and selling their services. They need to maximise new business opportunities, particularly if they are going to compete with [big consumer brands], which you can guarantee will be throwing money at marketing to promote their legal offering.’

He added: ‘At the very least, it should be standard procedure in all firms to call back all prospective clients who have been given a quote. Many lawyers fall into the trap of thinking it’s only a will or a conveyance or a contract that the client needs, and as a result fail to make that all important call to the prospect to see if they have any concerns, and whether or not they wish to proceed.

‘But that is a very short-term viewpoint, as research shows that, for each £1,000 that a new client spends, they and their contacts will return to the firm to spend another £3,000 in the long term.

‘Put in that context, solicitors are really missing a trick if they fail to spend the time following up with prospects, whether they make the calls themselves or instruct a dedicated sales and marketing person to make the calls.’

Alastair Redfern, a solicitor at Leeds firm Cohen Cramer, added: ‘The problem with lawyers is that we are extremely passionate about the law, and our natural inclination when we first speak to clients is to offer legal advice, not to think about that client from a commercial standpoint.

‘ABSs are going to change all that. As an industry, we are going to have to become much more commercially tuned in.’

He continued: ‘As a firm, Cohen Cramer has adopted a much more sales-friendly approach. When we have that initial conversation with a client, we use telephone sales scripts that lay out exactly what the client is going to receive with a particular product, broken down step by step, and how much that product will cost. There is definitely a client demand to know upfront “what am I spending and what am I getting for my spend?”

‘For many of us who practise law, this may go against all our natural instincts, but if we don’t adopt a more commercially minded approach now, you can guarantee that others will do in the future.’

Source: http://www.lawgazette.co.uk/news/solicitors-not-doing-enough-market-themselves-abss-approach

Do you need media management at your firm?

In-house lawyers don’t expect a high profile in the press over the summer months. But July and August this year were different.

Where major businesses have had well-publicised problems, such as regulatory investigations, general counsel have often been named and quoted in articles.

BP has had to contest a widely quoted purported admission of ‘gross negligence’ on the part of the company by its general counsel. Intel’s former GC, and Monsanto’s chief deputy general counsel, were both quoted in relation to US anti-trust cases. And HP’s general counsel was the senior figure deployed to explain the departure of high-profile chief executive Mark Hurd.

Their prominence is no accident. The central role that senior in-house lawyers play in an organisation when it comes under intense media scrutiny is increasingly recognised.

First and foremost, this is because of their relationship with the regulator. Alleged secrets and cover-ups are high up the media’s list of what constitutes a story – and where a regulator feels they have trouble getting information, or the information provided proves unreliable, it can be willing to publicise the source of its unhappiness. In-house counsel, therefore, need to take steps to ensure that they are not kept in the dark, and that misinformation is corrected quickly.

Second, the organisation under pressure may decide that its lawyer has the professional trust to publicly rebut misinformation.

Third, the in-house lawyer is at the centre of the tensions that pull an organisation’s instincts in different directions when faced with a crisis. If life has been lost, for example, the head of communications may want to apologise immediately; the head of legal to avoid admitting liability until the facts are clear. Those tensions need to be resolved sensibly for an organisation’s response to be clear and effective.

The advice from general counsel who have experienced being at the centre of a well-publicised crisis can be summarised as follows.

For the organisation:

• Have an agreed way to recognise when the organisation faces a media crisis
• Have a team that knows to assemble when a crisis occurs
• Define the responsibilities of team members
• Select a ‘command post’
• Prepare your message at each stage of the crisis
• Appoint a spokesperson

For the legal team:

• Get the facts straight
• Have a good rapport with the regulator
• Obtain evidence of compliance
• Have industry analysis of the facts, which may differ from a regulator’s analysis
• Recruit third-party supporters who the legal department may be in a position to contact, such as independent experts

In addition to media interest in ‘cover-ups’, the legal function also has responsibilities in other classic areas of media interest including the exposure of many people to risk. Public attention may not be welcomed by many in-house counsel, but for a growing number, being in the public eye is not a matter of choice.

Source: http://www.lawgazette.co.uk/blogs/in-business-blog/media-management-skills-becoming-a-must-house-lawyers

Good article from Lindsay Griffiths on how an adoption of online social media networking can pay dividends with reputation management and new clients…

During our Annual Conference, I had the opportunity to present on the topic that’s near and dear to my heart – social media. An informal survey of the room revealed that about fifteen attorneys were regularly using social media (I defined “regularly” as logging in once a week and connecting with someone in their network in some way). That still left the majority uninvolved, so I endeavored to convince them why social media might matter to them.

I began with some statistics on social media usage from the AmLaw 100 and 200 firms, adding the caveat that I understand that social media differs from region to region and that it isn’t commonly used in business in many countries. However, I still felt the topic had broad applicability because many firms around the world have American clients and I believe that social media will soon become important for businesses around the world.

I used the following statistics to illustrate what BigLaw is doing:

* 81 of the AmLaw 100 are using Twitter.

* 38 of the AmLaw 100 are blogging.

* 96 of the AmLaw 200 are blogging (which is up 147% from August of 2007 when only 39 were blogging).

* Among those 96, there are 297 blogs, with 245 of those being firm branded.

In terms of LinkedIn usage and lawyers:

* Every AmLaw 200 firm has a company profile on LinkedIn by default.

* Of the 50 million LinkedIn users, almost 1.5 million are lawyers, up from 118,000 in April of 2008. In two years, the number of lawyers on LinkedIn has risen over 1000%.

* Approximately 5,000 law firms have business profiles on LinkedIn.

* 4,000 groups included the word “law” on LinkedIn.

Although I know many lawyers are encouraged to move forward when they see what their colleagues at other firms are doing, I knew there would still be some in the audience who remained unconvinced. So I related some of the information revealed about corporate counsel social media usage in American Lawyer Media, Zeughauser Group & Greentarget’s recent survey, “Corporate Counsel New Media Engagement Survey.” (I know naysayers may point out that the very small sample size used in this survey might negate some of the impact of the results it provides, but I do believe it reveals a growing trend of social media usage among corporate counsel and my intent in the presentation was to show our attorneys why they shouldn’t dismiss it.)

The survey shows that in-house counsel are interested in blogs (primarily), Twitter, LinkedIn and other social media sites to get their business and industry information. As indicated by the survey, blogs are the preferred mechanism for obtaining business and legal industry information, with more general counsel getting this information online than from other traditional sources. General counsel are primarily (and always will) rely on referrals from trusted sources and credentialing activity to choose their outside counsel, but importantly, they are increasingly taking blog posts and tweets into consideration.

The statistics from the report that I felt were most relevant to my audience were the following:

* 43% of in-house counsel identify blogs as among their leading sources of news and information.

* 53% expect their consumption of industry news and information by these new media platforms to increase over the next six months to a year.

* Nearly half of in-house counsel aged 30-39 have used Facebook for professional reasons in the last week.

* 51% of in-house counsel said that they would receive content from their law firms via new media platforms if it were relevant to their business.

As you would expect, the report shows that there is higher adoption of social media among younger in-house counsel, who they classify as aged 30-39. But over the next ten years, this group will become the primary purchasers of legal services, so their interest in these tools is not to be ignored. Additionally, many smaller companies already have younger in-house counsel.

Not surprisingly, the survey revealed that the most popular social media tools are LinkedIn and blogs, with blogs finding consistent use among age groups and company size. However, interestingly, blogs are the most frequently used tool among in-house counsel at the largest companies (defined as those with revenues of US$1.5 – $9.9 billion). 35% of those in that group have visited a blog in the past 24 hours, with 54% visiting in the last week.

Larger legal departments (defined as those with 100+ lawyers) also rank blogs higher in terms of information sources. I see this as a real opportunity for mid-sized firms like those in the ILN, because social media levels the playing field.

But I cautioned them not to send a quick email back to their marketing departments or a junior associate saying “Get us involved in this social media thing.” To me, social media is about ENGAGEMENT. A lawyer would never send someone else to impersonate them at a cocktail party, so why do it online?

To convince the remaining doubters, I shared some success stories from Jayne Navarre’s upcoming book (being published in July by Thomson West), “social.lawyer: Transforming Business Development.” Jayne’s book goes into more detail about:

* Robert Thomas, an appellate and eminent domain lawyer in Hawaii, whose blog has garnered him attention from ABA colleagues and national and international journalists, and has netted him two Fortune 100 clients.

* Glenn Manishin, IP and technology lawyer with Duane Morris, who has landed six clients in the past twelve months from his social media activity.

* Chrissie Lightfoot, as a trainee solicitor, brought in £562,000 of new client legal work enquiries and referrals, started a consultancy, and is now the blogger of record for the Law Society Gazette.

* Nils Montan, practicing lawyer in Brazil and LinkedIn junkie, who brought in new clients and is now 100% responsible for marketing his practice and bringing in new business via the social web.

From these stories, it was easy for the audience to see that social networking does bring in new clients. I did pass along the cautions that the lawyers had shared with Jayne, that social networking does take work and require time and personality, just like any other business development activity. I suggested that the audience need not feel overwhelmed by the tools and offered myself, their marketing departments and consultants as people who could aid them in getting started.

Source: http://www.zenlegalnetworking.com/2010/06/articles/social-media/social-media-why-it-may-matter-to-lawyers-a-recap-from-the-iln-annual-conference/#more

Tesco Law to tear up the High Street for good?

It was years in the making and the centrepiece of Labour’s radical shake-up of legal services but the highly touted “Tesco law” phenomenon could be heading for the long grass, kicked there by less enthusiastic ministers in the new coalition Government.

“Big bang” day for lawyers in England and Wales is still on the horizon — the implementation of alternative business structures (ABSs) and external investment in law firms is scheduled for October 6 next year. But there are suggestions around Chancery Lane, the Inns of Court and Whitehall that the coalition does not share its predecessor’s determination to rush towards reform.

It is rumoured that Jonathan Djanogly, the new man at the Ministry of Justice with responsibility for implementing the Legal Services Act 2007, is not enthusiastic about the philosophy behind ABSs and external investment.

A series of Labour ministers argued that the reforms — first mooted in the Clementi review in 2004 — would create a consumer revolution on the high street and allow a mini-boom in the City in the form of capital injection in law firms across the profession. But in opposition both the Tories and Lib-Dems expressed scepticism and caution, not least over the effect of the proposals on the independence of lawyers.
Related Links

* Law set for ‘Big Bang’ as buyout fund circles

Private equity and other players may be gearing up to invest in firms in advance of the expected liberalisation — recent research by Badenoch & Clark, the recruitment company, highlighted the interest of Lyceum Capital, Lloyds Development Capital and Investec — but they could be disappointed.

Officially, the ministry is keeping its powder dry. A spokeswoman says only: “We are in the very early stages of a new government and ministers will wish to consider the full range of justice policy.” That is hardly a ringing endorsement of an ABS package that has been widely debated and is technically on the statute books awaiting implementation.

Those doubts appear to suit the two senior branches of the profession. The Law Society and Bar Council have expressed concern about the perceived haste with which the Legal Services Board (LSB) appears to be racing towards implementation. Both sides hope that new faces at the Ministry of Justice will, if not completely scupper ABSs and external investment, at least significantly amend the way in which they will operate.

Nicholas Green, QC, chairman of the Bar, says: “[New ministers] might impose a degree of restraint on its implementation because they are very conscious that dispute over the proper extent of regulation of the banking sector had led to a disaster and they wouldn’t want to see something — even on a smaller scale — occur in the legal sector, exposing to lawyers to far greater risk.”

Desmond Hudson, chief executive of the Law Society, agrees, pointing out that the Conservatives and Lib Dems supported a late amendment to the legislation introducing an access-tojustice test before an ABS could be licensed. He says that test needs to be strictly defined, something that the LSB has failed to do. “That is something we’ll be pressing the coalition on,” Hudson says, “and given that both sides supported that amendment, I’m sure that is going to be their approach.”

The society maintains that a prelicensing test must take account of the geographical area in which an ABS is to launch, the type of services it would provide and the impact on existing providers those activities would have. That approach invites suggestions of professional protectionism, but Hudson says that the society is primarily concerned about preserving a robust marketplace.

“As with deregulation of the bus services,” he says, “it’s no good after the event finding out that X, Y, Z priced predatorily and forced all the competitors out.

“If we act in a hurried way, then it will be too late to put things right several years down the line. The access-to-justice test needs to be properly and thoroughly ventilated before we rush into licensing ABSs. Our perception of the LSB’s position is that it has put much more importance on having a date to put these in place than would be appropriate given the need to get this right.”

Ironically, if the pace of reform slows in England and Wales, ABSs could first take root north of the Border. Motivated by a fear that Scotland’s leading commercial legal practices would relocate their head offices to London to take advantage of a liberalised regime, the Scottish Parliament has brought forward its own “mini-Clementi” package of reforms, which are set for approval in a year’s time and implementation also in October next year.

Speaking after a special general meeting of the Scottish Law Society last week — which approved a recommendation to the Edinburgh Parliament that minority ownership of law firms be allowed — that organisation’s new president, Jamie Millar, acknowledged that there could be a bizarre twist in the ABS story.

“The Bill has cross-party support here, so there could be ABSs in Scotland in 2011 and not in England,” he says. Whether that would trigger a rush of City and other leading English firms to re-register their HQs in Edinburgh and Glasgow is perhaps an irony too far.

However, long-term proponents of ABSs in England encourage the coalition Government not to be too reticent in bringing forward the reforms. Mark Wyatt, chief executive of TakeLegalAdvice.com, a consumer affairs legal website, says: “ABSs are good news for consumers and it would be against the public interest if the revolution in legal services provision was unnecessarily delayed.”

The author is editor-in-chief of the London-based European Lawyer magazine

Source: http://business.timesonline.co.uk/tol/business/law/article7142637.ece

Field Fisher Water (FFW) house managing partner Moira Gilmour has defended her firm’s strategy after it posted falling turnover, net profit and average profit per equity partner (PEP) figures for the 2009-10 financial year.

Turnover at the firm dropped by 3 per cent to £92m while net profit fell by £3.3m to £16.7m, and PEP was down 7.6 per cent to £476,000.

Gilmour said that while many of the firm’s rivals slashed costs – mainly via redundancies – FFW continued with its investment programme after implementing its redundancy programme early last year (16 January 2009).

Investments in the last financial year mainly revolved around strengthening its offices in Paris (13 July 2009) and Brussels (15 April 2010).

In May it brought in a five-strong clinical negligence team from Charles Russell (3 May 2010).

Gilmour said: “I’m pleased with the firm’s performance in the last year given the difficult economic climate. We’ve made considerable investments in the practice that will stand us in good stead for the coming years.

“Anyone can grow profits by cutting partners – that’s been the untold story this year. What’s important is the underlying profit, not taking short-term measures. Cost-cutting has its place but that was in 2008-09. 2009-10 was about consolidation and we have to think about long-term growth.”

Despite this year’s drop, since 2006-07 the firm’s turnover has risen by 36 per cent from £67.7m.

Gilmour added: “We’ve launched new practices in Brussels and Paris and that requires investment. A lot of firms have used this as an opportunity to get rid of dead wood but we’ve always closely measured partner performance and didn’t need to make those cuts.

“It’s a great opportunity for us because there are so many partners in the market.”

Source: http://www.thelawyer.com/field-fishers-turnover-and-profit-dip-during-2009-10/1005047.article

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Law firms have been identified as the highest-paying graduate employers in the Association of Graduate Recruiters’ (AGR) summer survey.

According to the research, the legal sector offers the highest starting salaries for graduates with a median of £36,500, a 4.3% increase on the average figure of £35,000 reported in 2009.

The report found that salary levels for most university leavers had remained stagnant for two consecutive years.

Investment banks and fund managers, who topped the graduate salary chart in 2009 with an average starting salary of £38,250, have dropped to second place with a median salary of £35,000, while salary levels in the banking and financial services sector have remained stagnant at £28,500.

Law was one of the few sectors to predict an increase in salaries in 2010, alongside retail and construction.

However, the difficulties many graduates are currently experiencing in their efforts to secure a training contract were highlighted by the survey’s finding that law firms are predicting an 11.8% drop in vacancies from 2009 to 2010 – significantly higher than the 6.9% decrease in graduate vacancies expected across the board.

The AGR report canvassed 215 members of the organisation which, between them, are estimated to offer a total of 17,920 graduate vacancies.

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