Adapt and survive
What will the criminal defence landscape look like when (and if) the dust from the duty contract bid round finally settles? Catherine Baksi looks ahead.
‘The chaos and closures we predicted were not over-hyped. We wouldn’t have said that a huge number of firms would go out of business if we did not believe it.’
The fight against the introduction of new police station duty solicitor contracts, scheduled to commence in January 2016 as part of the Legal Aid Agency’s controversial two-tier contracting arrangements, continues.
Challenges from firms whose tender bids were unsuccessful have been issued in 69 out of the 85 procurement areas. Only in areas including Barnet, Cambridgeshire, Cumbria 1 and 2, Devon and Cornwall 1 and 2, Dyfed-Powys 1 and 2, Essex, Gloucestershire, Havering, Kingston, Lancashire, South Wales and Suffolk 2 have no challenges been made.
The LAA has come under fire over its divide-and-rule tactics, inviting firms that were given contracts to join in resisting the challenges made by unsuccessful firms.
A legal challenge to the whole assessment process is also in the offing following revelations, denied by the LAA, from a whistle-blower over flaws in the way bids were marked by some untrained and unskilled staff (November 2015 Legal Action 6–7).
But while uncertainty continues to reign, what of those firms that did not bid for duty contracts in the first place, or those whose bids were unsuccessful but are not challenging the decision?
Reports of demise of firms ‘not exaggerated’
There are currently around 1,600 criminal law firms. Outgoing chairman of the Criminal Law Solicitors’ Association, Bill Waddington (pictured), notes that the LAA received around 1,000 bids, but explains that many firms made multiple applications, so there were large numbers of firms that did not even bother to apply.
In its revised consultation, the Ministry of Justice said it was looking to award 527 contracts. Though the ministry has not revealed the number of firms that were awarded contracts, Waddington estimates it to be around 200–250.
If that is accurate, it leaves around 1,350 firms without police station duty contracts. Can they survive? Were the warnings that hundreds of firms would wither and die exaggerated? In answer to the latter question, Waddington says emphatically, ‘no’.
‘The chaos and closures we predicted were not over-hyped. We wouldn’t publicly have said to politicians that a huge number of firms would go out of business if we did not believe it.
‘It is what the reports prepared for the MoJ by management consultant Andrew Otterburn and KPMG predicted – they said it is likely that firms that do not secure a duty contract will not survive in the long term.’
How long they take to fold, he says, will depend on the nature of the individual firms.
‘Some will close immediately, others may struggle on for a while, but will not survive in the long term,’ he predicts.
To a large extent, continued viability depends on how much firms without new contracts are reliant on duty solicitor work.
According to Waddington, that varies considerably around the country: ‘In London, there are several firms that do 100 per cent duty work. They rely on it for their existence and if they have not got a duty contract, I can’t see how they can survive unless they are swallowed up by another practice.’
But he has a word of caution for firms with contracts that are looking to expand. Fee cuts were due to be introduced with the new contracts (now due to be April 2016 at the earliest), so while winning firms will get more duty work, they will be doing it at a cheaper price and should be wary of increasing their overheads.
In other parts of the country, says Waddington, the ratio of own client to duty solicitor work is very different, and can be 80:20 or 90:10.
If these firms failed to get contracts, they will lose a percentage of their income and the fees earned for their own client work will fall.
They may, he suggests, have to make staff cuts, which will make it harder to increase their capacity to make up for the loss in revenue. ‘So whether they will stay in business is uncertain. KPMG predicted these firms would go to the wall too.
‘It won’t be immediate, but it will happen.’
There are firms, he predicts, with loyal client followings that will survive on own client work alone and those in multi-disciplinary practices may also fare better.
‘There will be survivors,’ he says. ‘I would never say that all 1,350 firms will go to the wall, but a substantial number, especially crime-only firms who are heavily reliant on duty work, will disappear off the face of the earth.’
An opportunity for ex-coppers?
For freelancers – police station representatives sent as agents by firms to cover their police station duty slots – the future also looks bleak, according to one who has done the job in London for the past 15 years, but who wishes to remain anonymous.
There is ‘huge concern’ that firms with duty contracts will seek to employ full-time staff and pay them much less than they currently pay their freelance police station agents.
‘There is a big question mark over whether freelancers will be willing to do the work for the derisory fees that will be offered,’ he says.
He predicts that those staff who end up covering the low-paid police station work will be very junior, and as well as working their nine-to-five job, they will be required to cover night-time shifts.
In addition, the freelancer notes, a high proportion of accredited police station representatives are ex-police officers, who do the work to supplement their police pension. ‘They have always been able to afford to undercut us,’ he explains, ‘and they will be able to afford to continue to do the work for the lower rates.’
He cautions: ‘There is the potential that police station duty representatives will be made up of inexperienced, poorly paid junior lawyers and prosecution-minded ex-police officers.’
This, he states, will have serious adverse consequences for suspects detained at the police station, because what happens there determines much of the way a case progresses, including its outcome.
It is crucial that those detained at police stations are advised by experienced lawyers, he says, but warns: ‘Suspects will have sleep-deprived lawyers that know fuck all, determining their future.’
Switching to privately paying work
There are a number of specialist firms that do criminal work almost exclusively for privately paying clients, including well-known names like Bindmans, Kingsley Napley and Peters & Peters.
Nick Freeman (pictured), of Manchester-based Freeman & Co, generally described by the tabloid press as ‘the millionaire lawyer known as Mr Loophole’, for his habit of securing acquittals for high-profile clients charged with driving offences, says his firm has picked up business as legal aid has contracted.
Freeman, who began his career doing exclusively legal aid work, now only does private cases, having, he says, ‘seen the writing on the wall’.
‘What has happened to legal aid is an utter tragedy, which will lead to massive losses of jobs and miscarriages of justice,’ he says, adding that ‘private firms will benefit from the savage legal aid cuts’.
Some legal aid practices, he suggests, may be able to pick up private work if they market themselves correctly, but he warns it may prove difficult. He points out that firms that have done previously only legal aid work may not be geared up to do private work and may not project themselves in a way that established private firms do.
Moreover, he says, ‘paying the same person for a service that they could have got for nothing may be hard for clients to swallow. It’s psychological, so they are likely to go elsewhere.’
There may be other problems with making the switch, too. One lawyer whose firm is increasingly acting for wealthy foreigners with business interests in the UK who are facing criminal charges says his offices are too shabby to allow his new privately paying clients to visit. ‘If they saw our torn office carpet, they might not use us again,’ he says. As a result, he spends a lot of time travelling to meet clients in their homes and offices – and fending off offers from them to come to him.
Marketing opportunities – duty solicitor v own client
But it is not all doom and gloom. Alaric Walmsley, managing partner at Merseyside firm Linskills Solicitors, says he is glad his firm’s bid for a duty contract was unsuccessful.
‘The contract being offered was not an attractive one,’ he explains. ‘You have to sign up and commit to doing four or five years of work in an area the size of Merseyside. But our firm works all over the country. Had we got a contract, we would have had to focus only on Merseyside and we’d have had to dramatically change our business model.’
Founded in 1978, the firm specialises in criminal defence, as well as social welfare and human rights work.
‘There is the potential that in future police station duty representatives will be made up of inexperienced, poorly paid junior lawyers and prosecution-minded ex-police officers.’
Walmsley says he is ‘excited’ about the future and the opportunities for firms without duty contracts to market themselves differently.
The ‘duty solicitor’ brand, he suggests, is not particularly strong or safe because the role is widely misunderstood.
Clients, he says, think the duty solicitor is associated with the police. So, he suggests, ‘firms will market themselves against the duty solicitor scheme and sell themselves as being independent’.
Linskills’ website already states up front that it is an ‘independent law firm’.
Waddington agrees. Even though own client work is still paid by the legal aid fund, he says firms will encourage clients to ‘ask for us by name’ and trumpet the better quality of service and more personal attention they will receive from their own solicitor rather than a duty solicitor.
And Walmsley is a man with a marketing plan. While successive fee cuts have meant individual firms have not had the budget to market themselves, if (and, he believes, it is a big if) the contracts come in, there is nothing to stop a group of firms without duty contracts from marketing themselves jointly. ‘There are 40 firms in Merseyside,’ he says, ‘and only eight firms have contracts (one of which is from outside the area), so there are around 30 firms who could put money into a joint pot and form their own marketing network.
‘It could become a national scheme,’ he continues. ‘I can’t be the only person thinking along these lines. If clients start to see adverts on television or billboards, things could start to build up and more people will request particular firms at the police station.
‘So contracts that might look attractive now, may not look so good in two or three years’ time.’ ■