UNCERTAIN TIMES FOR LAWYERS
We cannot imagine a more challenging time for law firms at present especially smaller practices.
With the Legal Services Act 2007 (LSA) coming into force on the 6 October 2011; ever increasing premiums for professional indemnity insurance together with the Jackson reforms on costs and the abolition of Legal Aid for many type of cases, it is not easy managing a law firm. There is great uncertainty for lawyers especially those of us who are personal injury practitioners.
The LSA will radically change the practice of law in that it will create Alternative Business Structures (ABS’s) allowing non lawyers to own and invest in law firms. This is likely to result in much larger firms coming into existence operating from “call centre” type premises, relying mainly on untrained legal staff in order to maximise profits. It is envisaged that their work will be easily “commoditised”, for example, low value personal injury claims, conveyancing, drafting wills and so on. This has been dubbed “Tesco Law”.
With this type of competition, the future appears to be grim for the smaller law firm and it is tempting to throw in the towel and do something else. However, this is not for us. As a profession, we have faced difficult times in the past but we believe that there is a future for a niche firm with a focus on providing high quality client care at all times.
In our experience, clients are not happy with the “internet” type firms with a “pile-it-high, sell it cheap” approach to their legal affairs but ideally they want a local firm who will take care of them as a client and get a good result for them.
No one knows how the proposed changes will pan out in the future. At the time of our newsletter, there are encouraging noises coming from the Ministry of Justice that there will be concessions on legal aid over clinical negligence. We believe that “Tesco law” is more likely to be a damp squib and not a ‘big bang’ in the provision of legal services as widely reported in the press. The majority of lawyers undertake specialist work for their clients (after all, it has taken us 6 years to qualify as a solicitor) and this is not something which can easily be done by unqualified lawyers.
Notwithstanding these changes, there will always be accidents and mistakes made by the medical profession. As a consequence, people will be injured and they will be entitled to be compensated. They will continue to want to be represented by an able and approachable lawyer. By us continuing to provide an excellent service to our clients there is no reason why a firm like S J Edney (and other small niche firms) should not continue to prosper in the future.
PI REFERRAL FEE BAN
Referral fees are to be banned in personal injury cases, the Ministry of Justice recently announced.
An amendment introducing the ban will be added to the Legal Aid, Sentencing and Punishment of Offenders Bill and the ban should be enforced by next Easter.
Why the change of heart? The Government’s previous position has been that if solicitors wanted to spend their money to secure work they should be free to do so. This was before Jack Straw’s recent campaign for their abolition supported by both the Times and the Daily Mail. Jack Straw’s intervention was a little disingenuous as he had in fact been the Home Secretary when the claims management regime was established and he must have been aware of personal injury referral fees before he left office.
S J Edney welcomes the Government’s u-turn on referral fees but the devil will be in the detail. What, for example, amounts to a referral fee? What about payments made in kind rather than hard cash? Why only personal injury and not referral fees in conveyancing? What if these referral fees are driven underground and they are described in the future as marketing fees or by some other name?
Fall in hospital bugs
Deaths from Clostridium Difficile and MRSA fell sharply last year as the NHS claimed to be winning the war on hospital superbugs. Deaths where C.difficile was a factor fell to 2,704, a 31 per cent decline on the previous year. Deaths involving MRSA fell 38 per cent to 485 last year. Ministers called for a “zero-tolerance” approach to hospital infections.
New Code of Conduct for solicitors
To coincide with the coming into force of the Legal Services Act next month, we will also see the advent of a new regulatory approach by the Solicitors Regulation Authority (SRA) encompassed in their new Handbook. The Handbook underpins a new approach to how they regulate “outcomes-focused regulation” (OFR) and will achieve a common standard of protection for clients, regardless of the type of law firm they use.
For solicitors and other regulated individuals including ABS’s, OFR will mean less box-ticking and a much more collaborative and less confrontational relationship with the regulator. Firms will have greater freedom to decide how to achieve the best results for their clients, taking account of their individual needs.
For clients, OFR will not mean lowering the professional standard they are entitled to expect. Rather, OFR will mean that the regulator will be concentrating more on the things that matter most to clients: delivery of the service and outcomes they are entitled to expect.
At the heart of the new regime will be ten mandatory Principles. These will apply to all solicitors and to all firms that are regulated by the SRA and everybody who works in them.
For more details of this new code of conduct please visit the SRA’s website at www.sra.org.uk
This newsletter was produced by S J Edney solicitors Telephone: 01793 600721
Also read my blog – click here https://www.accidentspecialistsolicitors.co.uk/news/