22 September 2019

Future of the Bar speech 2






I am very pleased to speak to the Legal Practice Management Association, not only because it is an innovative professional organisation, which will embrace and make work all the new developments arising from the combined effect of the Legal Services Act 2007 and the Legal Services Commission cuts; but also because the Bar Standards Board and the LPMA have a symbiotic relationship.  Without a flourishing regulated Bar, there is no work for the LPMA; without the expertise of the LPMA, the Bar will not maximise its skills and no doubt, you would say that they would not last a week without their management team.


I am the chair of the BSB, not the Bar Council, ie it is not my purpose to help the Bar make money, but to regulate in the interests of consumers, the rule of law and a strong diverse independent profession.  In this year of the collapse of trust in our parliamentarians and in the financial system (two examples of different types of regulation failing to work) it is as well to remember the reputation of the Bar and the need to preserve trust in it. 


I feel confident in saying that it remains one of the most respected professions in the world, not only because of the global reach of the Bar, whether it is international students coming here or UK barristers appearing in international cases, but also because it has become synonymous with human rights and freedom.  It was the Bar and the judges who stood up to apartheid in S Africa; it was the barristers who demanded the restoration of the Chief Justice in Pakistan recently and danced in the streets to celebrate the rule of law when they succeeded.  And it is barristers who can be relied on, as seen throughout the centuries, to take on the cases that only independently minded lawyers will - whether it is alleged terrorism, or child abusers, asylum seekers or allegations of torture, the banks or any other issue that might upset government.  Let me quote Patrick Hastings KC, as apt today as he was 60 years ago: "to the client whom he represents an advocate owes a duty to act with fearless independence; to the Court before whom he appears he owes the duty of complete and absolute honesty in all that he says and does.  If he fails in either of those duties he will sink into well-deserved oblivion; if he maintains the tradition which he has inherited he will have earned his place upon an honoured roll."  (Cases in Court) Of course today it is she as well as he; and I overlook Hastings' opening comments about no statute controlling the activities of the Bar and no rules save those handed down by tradition.  We are in a different era of regulation now.


My brief was to deal with the big themes for you.  I want to go over the changes that the BSB has made possible in the working practices of the bar, and then look at the pros and cons of regulation, the constraints put upon regulators and the Bar, at the concerns expressed about the maintenance of the quality of advocacy, and the new ways in which complaints will be handled.  Above all I want to look to the future, the changes that you will make in your chambers and offices and how it is all going to impact on every quarter of society, the consumer, the judge, the lawyer, and the need of the Bar to attract the best of the young generation to the practice.


The context

Recent years have seen rapid change and intense competition in the market for legal services.  The 2007 Act has potentially opened the way to radical change in the ways and setting in which legal services may be offered.  Effective regulation needs to play its part both in bringing about the expected relaxation and in mitigating the inevitable attendant  risks.  We may also glance back at another major overhaul of a regulatory regime: the big bang, the deregulation of the city in the 1980s, the creation of the Financial Services Authority with powers both over firms and individuals within them who were fulfilling controlled functions.  We would do well to study and learn from that episode because the LSA 2007 is in important respects modelled on aspects of the Financial Services and Markets regime, and was passed before the present financial crisis was appreciated.  Margaret Cole, the Financial Services Authority's Director of Enforcement, has signalled a shift in regulatory focus back onto individuals and, in appropriate cases, getting jail sentences against those individuals responsible; she said in a speech last year that "action against individuals has a lot greater impact in terms of deterrence than action against firms." It does not automatically follow that the LSA should require that the focus of regulation and discipline should switch from the individual to the entity; nor that there should only be high level outcomes regulation as opposed to more detailed rules.  We must not risk diluting the culture of personal responsibility amongst barristers, which is enhanced by membership of the Inns, judicial and peer scrutiny and having to prove themselves for every new piece of work, whether those barristers are employed or independent.  A vast organisation of a multidisciplinary nature, as envisaged by the LSA, might be not only much more expensive for the consumer (remembering that chambers' overheads are less than those of solicitors' firms) but might dilute the moral responsibility of its members; whereas at the other end of size we know that for whatever reason sole practitioners in the solicitors' profession generate an undue amount of disciplinary work.


Having said all that and after close deliberation for two years, the BSB decided in November to alter the rules for Barristers, and those rules are currently with the Legal Services Board for approval.

The Board's decisions will permit barristers to become managers of Legal Disciplinary Practices, with solicitor partners, and up to 25% non-lawyer managers or ownership, regulated by other approved regulators such as the SRA, or the Council for Licensed Conveyancers, without having to requalify.  Subject to more detailed guidance, the changes will also permit barristers to become shareholders in LDPs, and to work at the same time in more than one capacity, for example both as managers of LDPs and as self employed practitioners.  We envisage that a young barrister might find that it is helpful to work for part of the week for the Crown Prosecution Service or government and the rest of the time on his or her own account.  LDPs with at least one non-lawyer manager will at some point in 2011 or 2012 become Alternative Business Structures.  The BSB decided that any wider decision to permit barristers to work in ABSs should be deferred until the effects of the transitional LDP regime can be reviewed and assessed following further consultation in 2010.  We did this because there has been no satisfactory study of the effects of these changes, neither by the government department promoting the LSA nor by the LSB, not only in relation to equality and diversity, but quite simply on the consumer.  The BSB did its best with limited resources to get an economic study of the likely impact, and it did show up some risks, rather appropriately for so called Tesco law - will the supermarket drive the highstreet corner shop out of existence? Will it dictate rules to consumers and suppliers because of its might?  There is a potential for lower price but less choice and quality; it is essential that clients be told that they have a choice of lawyer and do not have to take the one in the next office; every step must be taken to ensure the probity of those who operate, own and finance the business; we realise that shareholder value notions may impact on the independence of legal advice and duties to the client and the court.  There have been voiced concerns about redress and indemnity arrangements, and access to justice may be threatened if a major brand operates in a niche area. 


Subject also to further safeguards, the BSB will permit self employed barristers to share premises, to investigate and collect evidence, to take proofs of evidence, attend at a police station and undertake correspondence.  We know that the pressure for more direct access is growing, not least in order to compete with solicitors on a level playing field - if solicitors are going to do advocacy, then the Bar might want more direct access and litigation, while at the same time preserving itself as a separate profession, which we believe is for the good of the administration of justice in this country and for the client. 


The BSB also decided in principle that barristers should be permitted to form barrister only entities (BOEs), including partnerships, limited liability partnerships and companies, and that barristers within BOEs should be subject to the cabrank rule.  Indeed, we would like to see the cabrank rule apply as widely as possible for we regard it as a moral plank of the legal profession.  In the same way we regard referral fees as the "bankers' bonuses" of the legal profession and we wish to see them rooted out in the solicitors' profession, let alone the Bar. 


Entity regulation

Permission for barristers to work in new sort of entities leads naturally to the question whether the Board should itself become an entity regulator.  In the case of BOEs, currently there is no approved regulator, so barristers will only be able to form them if the BSB takes on their regulation; and we will shortly be consulting on this.  We will start with a survey of the Bar, to try to establish at least some provisional indication of the numbers of barristers who may be minded to work in some of the entities that are, or may be permitted, and to find out whether barristers would prefer to work in BSB-regulated entities rather than any other available regulator, bearing in mind the quality hall mark of the Bar and the need to avoid a race to the bottom in regulators' competition.


In doing this, we fear being hampered by the possibility that the LSB will not permit the sort of entity that we feel might suit the Bar and the BSB's own expertise, one that is largely barrister-managed and owned.  The LSA's philosophy appeared to be "let a thousand flowers bloom" in the gardens of the Inns, and we trust that no species will be killed off at birth.  At the same time, the LSC initially blocked the relaxing tendencies of the bar.  You will know that the LSC tendering process is proving very controversial, and one of the most controversial elements is the way in which the Bar wishes to set up a procurement vehicle, whereby chambers will tender for work and procure it from a team of barristers and solicitors as required.  But the LSC did not seem to want to deal with this new "procureco" for no understandable reason, initially.  I understand that it is now moving towards acceptance. It was feared that the LSC would not tender to the Bar as presently constituted; nor would it look with favour on a vehicle invented to overcome these difficulties.  It is not now the Bar that is resisting change; its partners did not like the traditional mould but need to be sympathetic to the new models being put forward.


The BSB is not rushing into entity regulation as any sort of obvious panacea to the economic woes besetting it and the competition from solicitor advocates and the CPS. There are risks in regulating and not regulating entities; the issues are complex and difficult and have so far also proved controversial and divisive within the Bar itself.  At one end of the spectrum, some still argue that any further shifts at all in the direction of alternatives to the traditional model could only weaken the Bar to the detriment of the public good.  At the opposite end, others argue that if the Bar is to survive, a wider range of available business models is the only way forward.


Another major choice facing the BSB is whether it should seek to regulate LDPs and eventually ABSs, going head to head with the SRA, and whether it should be prepared to regulate entities that conduct litigation.  It could be said that barristers in entities conducting litigation would spell the end of the functional division of the legal profession, in other words amount to fusion.  Others say that the changes would be permissive only, and that most of the traditional Bar would stay the same.  After all barristers have been permitted to be employees within solicitors' firms for quite some time now without any real inroad into the Bar as always known. And they know that they will be conflicted out of taking work if they are in partnership with each other.


We have the regulatory objectives of the LSA in mind and against their background we have to consider, in deciding about entity regulation, how much it would cost to become another entity regulator, in terms of the administrative costs being carried on the practising certificate fee amount; whether the BSB has the skills; how many barristers want this; whether customers would be confused by different regulators of different firms or even in the same firm; whether the BSB might be distracted from the all important task of disciplining and educating individual barristers.  On the other hand, barristers might not want to wait for the BSB to become a regulator and sign up to entities under the SRA.  With preservation of the Bar for the public good as a mission, maybe BSB regulation would be best for all advocacy centred activities, given our expertise in that; it would help barristers get block contracts; would help the young ones get started with earnings in an entity; and would prevent wholesale defection to the SRA entities. At the same time the young Bar tell us that they are not attracted to the new working structures and some overseas jurisdictions will not accept them. 


Other threats


As you know, legal aid has been cut and remains under pressure and I note that the LSC, whose days must be numbered, spends £128 million a year on administration but is taking away £6m (the same as the cost to the UK of the winter Olympics) from the family bar; that the new Independent Safeguarding Authority with 200 staff will spend about £200m over 3 years registering 9 and a half million people who might be a risk to the children they encounter but that there will be less legal aid when those very children need defending in the courts.  How can social mobility increase when the prospects of a young bar student are blighted by the debts he or she has run up at university and on the Bar course, and there will not even be a living to be made at family or criminal work?


The Bar is challenged too by in house solicitors and High Court Advocates as well as the CPS. The Bar has always prided itself on its advocacy standards but there have been indications that all is not well with advocacy as experienced by the judiciary in court, whether it is coming from solicitors or barristers.  To that end, there are cross-profession moves, assisted by the judiciary and the CPS, with the expertise of the Advocacy Training Council and the Inns, to bring in standards of advocacy and assess it.  This is likely to start with publicly funded work.  We are already making progress in this area.  We issued our first ever joint consultation with SRA and ILEX just prior to Christmas.  It sets out the first set of common advocacy standards for criminal advocates.  A similar approach will be taken to other practice areas in due course.  While the standards suggested are more directly applicable to barristers themselves, there are a number of areas where the system in place in chambers could assist advocates to meet those standards.  The consultation closes on 22 March 2010.  I encourage you to think about the possible impact of having one set of standards and make submissions to assist in this important development.


Complaints handling is about to change.  The rules of the entity regulator will trump those of the individual profession under s.52 of the LSA but also there is now a new Office of Legal Ccomplaints with the Legal Ombudsman, Adam Sampson, in place.  The BSB will continue to be in charge of allegations of misconduct, while the OLC will take on the service complaints.  But there are a large number of hybrid complaints, that is those that on the face of it, indicate both poor service and professional misconduct.  There will be difficulty in sorting out how this is divided up.  It seems logical for the OLC to be the first and comprehensive portal but given that it will have to turn over misconduct complaints to the BSB there is a risk of confusion and delay and it will be hard for the complainant to understand where and why a complaint is going. To this end, the BSB and the Legal Ombudsman will have a memorandum of understanding, pledging to cooperate and to share information.  Both organisations will make sure that the public and the profession know the distinct roles of the two complaints handlers, and that complaints with an element of misconduct are sent promptly to the BSB.




The Bar in ten years time is likely to have more direct and public access; to have many different forms of professional life but remain "One Bar"; to offer new career pathways; to be hallmarked with advocacy excellence; to have different CPD requirements and education suited to the various forms practice at the Bar might take.


The BSB has a clear vision of the Bar as a distinct branch of the legal profession existing to protect the consumer and uphold the rule of law; the maintenance of the highest professional standards; to be the hallmark regulator of the best advocacy and the provision of good, honest, independent and fearless legal advice.  It is a small collegiate profession under severe pressure at the moment but determined to survive as it has done over the centuries when faced with other threats.  The BSB values the Bar's commitment to high standards, essential values, and important traditions of independence, collegiality and pro bono work.  The BSB is an evidence based organisation.  It will continue to seek evidence about the way the new structures may work out, bearing in mind the regulatory objectives of the Act, starting with "protecting and promoting the public interest."  It will continue to monitor the impact on women, and black and ethnic minority barristers; and the effects of the cuts and the new structures on the social mobility of those who aspire to join the profession, in a way that no other body has, so far, done.  There may be risks that damage the public interest and not deliver to consumers the much trumpeted benefits.  They want affordable and accessible law and that is what we will be looking for.  If any risks materialise we must deal with them, by monitoring and reviewing and taking the gradualist approach to reform advocated by its architect, Sir David Clementi. 


What might this all mean for LPMA members?  Well, undoubtedly there will be change for many of you.  You are a highly skilled group of people, in a unique position.  We know that while many barristers are thinking about these changes, many are also uncomfortable with them and uncertain of the future.  LPMA members can help by becoming knowledgeable about the changes and engaging with barristers about them.  Further, the changes may present opportunities for you - perhaps to play an even greater role within chambers or to have a more specifically recognised role in the development of barristers' practices.  The future may hold recognised management roles or ownership opportunities for you.  I urge you to think about the skills you think may be needed in the future, the issues that are raised and the ways of solving perceived or real problems.  The BSB will be issuing consultations later in the year.  Please participate.  Give us the beneift of your knowledge and perspective.  Tell us what you think we don't know and support us where you think we're on the right track.  We do not wish to stifle innovation and we have great trust in the ability of the LPMA members to cooperate with us, to weigh up the risks and to make the new structures into reality.


Ruth Deech