Fit for the future
Are ProcureCos the beginning of an integrated legal profession or a false dawn? Ian Dodd assesses the Bar Council's recent guidance and looks at the potential benefits for local authorities
Many elements of the recent Legal Services Act can be traced back to the report Sir David Clementi published in December 2004. Alternative Business Structures and other novel initiatives were clearly laid out and the smart lawyers kept it in their minds that changes were afoot and some preparation ought to be considered.
The double pressure of the global financial crisis coinciding with the adoption by Parliament of the LSA was, probably, just that; a coincidence. Although the UK may recover slowly from the financial crisis its effects will be with us for a long time and, irrespective of the reason, lawyers find themselves contemplating a dramatically altered legal landscape from that they enjoyed a short time ago. Whilst the new coalition government will visit upon us all substantial cuts in public service spending Local Authorities, paradoxically, may well find that there is need for extra resources as the amount and complexity of legal work they have to handle looks set to increase.
More efficiencies in working practices, staffing and general expenditure will be required to weather the storm and deliver first class services to clients and many solicitors firms started to attend to that about a year ago as their P&L accounts showed the ravages of the recession. Local Authorities have hardly escaped and the continuing activity of amalgamation of all or part of the activities of neighbouring Local Authorities, more collaborative working practices and the ceaseless search for cost reduction are hallmarks of today’s public service environment.
It may strike some as strange, then, that the Bar has been a little slow to react and find ways that it can help its own client-base to prosper in the bleak future. The Bar is, of course, a very traditional profession and changes come slowly after considerable consultation and debate. However, the clear message Clementi carried and the way publicly funded work is being paid ought to leave no-one in any doubt that the government, and this one will be the same as the previous one in this, have a definite intent. They see the professions of solicitor and barrister moving closer together until there is an integrated legal profession which will offer the users of legal services clear and unambiguous access to the whole range of legal advice and help from one source.
In February the Bar Council held a series of road shows to introduce the concept of ProcureCos to the Bar. The newly installed Chairman of the Bar Council, Nicholas Green QC, presented the proposal of a corporate work procurement vehicle with enthusiasm and intelligence. He explained that the Bar could not stand still and needed to be more commercial in its outlook and he gave short shrift to the Luddites who yearned for the peaceful and more profitable past. An 89 page guidance note to ProcureCos was published in April with the message to the Bar that this was just a template and it was up to individual chambers to decide the best evolution of the concept for them. A number of leading chambers are formulating their plans and are engaging clients in exploratory discussions about how they can work together in a more collaborative way.
The objective of a ProcureCo agreement is for the Bar to be able to offer clients a single point of access to a range of legal services and to supply the end user of those legal services with a transparent and seamless experience. ProcureCos will be most effective with large-scale tender work which has volume, a reasonably long-term duration and repetitiveness as its main features.
The LSC have been unable to introduce Best Value Tendering (BVT) and One Case One Fee (OCOF) at the original, planned date but their need to provide the Treasury with cost savings will surely hasten the arrival of these two and, probably, other money saving devices. Already the LSC are seeking to reduce the number of franchise holders they licence in Family work. This will lead to additional pressure of work-load and cost-saving on participating solicitors. These results of this sort of strategy are already to be seen in those solicitors firms who have been through the cull that banks, insurance companies and others have brought to their panels.
All government departments which fund legal work for their communities will be searching for similar, large-scale savings in their costs and the opportunities for those who can provide integrated legal services to their clients have never been greater.
So, how will ProcureCos help those solicitors in Local Authorities who see their work-load increasing and their resources diminishing and how can the Bar help?
The concept of ProcureCos represents a step-change in the way the Bar thinks and operates and is taking them to unexplored territory. The fanciful early ideas some in the Bar had of them engaging solicitors and paralegals to fuel their practices with work may have been laid to rest by thoughtful consideration of the impracticality of such an arrangement. Indeed, some of the proposals for the administrative structure and ownership of ProcureCos look cumbersome and ill-fitted to allow the flexibility and speed of action the device will need; but it represents a good start. The ability to organise and manage ProcureCos will be beyond the reach of some of the smaller barristers’ chambers. There are about 330 chambers (excluding sole practitioners) in England and Wales and it is estimated that a relatively small number, around 20, have the current capability and capacity to run a ProcureCo. Others will join this elite and many will never manage it and a few won’t need to.
There are those in chambers management who see beyond ProcureCos and have a simpler vision of a practical working arrangement for the joint acquisition and operation of tender work. The concept of a simple commercial Joint Venture contract defined by time and value for individual pieces or groups of work is one which is finding favour. JVs have been part of British business for many years and nearly all Public Finance Initiative (PFI) work is done through them.
However, whatever new arrangements are agreed upon by those in the supply chain of legal services they will have to provide the client, at whatever point in that chain, with an improved deal. There will be better Service Level Agreements, easier access to service providers and other quantitative and qualitative enhancements. The bottom line will, though, be the bottom line. During the upheavals that solicitors, Local Authorities and others who use the services of the Bar have gone through the impartial observer might conclude that barristers’ fees have remained pretty much the same. Whilst the Bar would dispute this the time has surely arrived when some margin sharing through innovative long-term pricing arrangements would benefit all parties. Open-book accounting, invoices instead of fee notes and good forward planning of the operation of contracts will all contribute.
ProcureCos might not be the final answer but they’re a great start in the right direction. So, whilst the new dawn hasn’t quite arrived you can see the sun breaking the horizon.
Ian Dodd is a consultant advising barristers’ chambers on how to set up and run ProcureCos
+44 (0) 7766 365 412
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Are ProcureCos the beginning of an integrated legal profession or a false dawn? Ian Dodd assesses the Bar Council's recent guidance and looks at the potential benefits for local authorities
Many elements of the recent Legal Services Act can be traced back to the report Sir David Clementi published in December 2004. Alternative Business Structures and other novel initiatives were clearly laid out and the smart lawyers kept it in their minds that changes were afoot and some preparation ought to be considered.
The double pressure of the global financial crisis coinciding with the adoption by Parliament of the LSA was, probably, just that; a coincidence. Although the UK may recover slowly from the financial crisis its effects will be with us for a long time and, irrespective of the reason, lawyers find themselves contemplating a dramatically altered legal landscape from that they enjoyed a short time ago. Whilst the new coalition government will visit upon us all substantial cuts in public service spending Local Authorities, paradoxically, may well find that there is need for extra resources as the amount and complexity of legal work they have to handle looks set to increase.
More efficiencies in working practices, staffing and general expenditure will be required to weather the storm and deliver first class services to clients and many solicitors firms started to attend to that about a year ago as their P&L accounts showed the ravages of the recession. Local Authorities have hardly escaped and the continuing activity of amalgamation of all or part of the activities of neighbouring Local Authorities, more collaborative working practices and the ceaseless search for cost reduction are hallmarks of today’s public service environment.
It may strike some as strange, then, that the Bar has been a little slow to react and find ways that it can help its own client-base to prosper in the bleak future. The Bar is, of course, a very traditional profession and changes come slowly after considerable consultation and debate. However, the clear message Clementi carried and the way publicly funded work is being paid ought to leave no-one in any doubt that the government, and this one will be the same as the previous one in this, have a definite intent. They see the professions of solicitor and barrister moving closer together until there is an integrated legal profession which will offer the users of legal services clear and unambiguous access to the whole range of legal advice and help from one source.
In February the Bar Council held a series of road shows to introduce the concept of ProcureCos to the Bar. The newly installed Chairman of the Bar Council, Nicholas Green QC, presented the proposal of a corporate work procurement vehicle with enthusiasm and intelligence. He explained that the Bar could not stand still and needed to be more commercial in its outlook and he gave short shrift to the Luddites who yearned for the peaceful and more profitable past. An 89 page guidance note to ProcureCos was published in April with the message to the Bar that this was just a template and it was up to individual chambers to decide the best evolution of the concept for them. A number of leading chambers are formulating their plans and are engaging clients in exploratory discussions about how they can work together in a more collaborative way.
The objective of a ProcureCo agreement is for the Bar to be able to offer clients a single point of access to a range of legal services and to supply the end user of those legal services with a transparent and seamless experience. ProcureCos will be most effective with large-scale tender work which has volume, a reasonably long-term duration and repetitiveness as its main features.
The LSC have been unable to introduce Best Value Tendering (BVT) and One Case One Fee (OCOF) at the original, planned date but their need to provide the Treasury with cost savings will surely hasten the arrival of these two and, probably, other money saving devices. Already the LSC are seeking to reduce the number of franchise holders they licence in Family work. This will lead to additional pressure of work-load and cost-saving on participating solicitors. These results of this sort of strategy are already to be seen in those solicitors firms who have been through the cull that banks, insurance companies and others have brought to their panels.
All government departments which fund legal work for their communities will be searching for similar, large-scale savings in their costs and the opportunities for those who can provide integrated legal services to their clients have never been greater.
So, how will ProcureCos help those solicitors in Local Authorities who see their work-load increasing and their resources diminishing and how can the Bar help?
The concept of ProcureCos represents a step-change in the way the Bar thinks and operates and is taking them to unexplored territory. The fanciful early ideas some in the Bar had of them engaging solicitors and paralegals to fuel their practices with work may have been laid to rest by thoughtful consideration of the impracticality of such an arrangement. Indeed, some of the proposals for the administrative structure and ownership of ProcureCos look cumbersome and ill-fitted to allow the flexibility and speed of action the device will need; but it represents a good start. The ability to organise and manage ProcureCos will be beyond the reach of some of the smaller barristers’ chambers. There are about 330 chambers (excluding sole practitioners) in England and Wales and it is estimated that a relatively small number, around 20, have the current capability and capacity to run a ProcureCo. Others will join this elite and many will never manage it and a few won’t need to.
There are those in chambers management who see beyond ProcureCos and have a simpler vision of a practical working arrangement for the joint acquisition and operation of tender work. The concept of a simple commercial Joint Venture contract defined by time and value for individual pieces or groups of work is one which is finding favour. JVs have been part of British business for many years and nearly all Public Finance Initiative (PFI) work is done through them.
However, whatever new arrangements are agreed upon by those in the supply chain of legal services they will have to provide the client, at whatever point in that chain, with an improved deal. There will be better Service Level Agreements, easier access to service providers and other quantitative and qualitative enhancements. The bottom line will, though, be the bottom line. During the upheavals that solicitors, Local Authorities and others who use the services of the Bar have gone through the impartial observer might conclude that barristers’ fees have remained pretty much the same. Whilst the Bar would dispute this the time has surely arrived when some margin sharing through innovative long-term pricing arrangements would benefit all parties. Open-book accounting, invoices instead of fee notes and good forward planning of the operation of contracts will all contribute.
ProcureCos might not be the final answer but they’re a great start in the right direction. So, whilst the new dawn hasn’t quite arrived you can see the sun breaking the horizon.
Ian Dodd is a consultant advising barristers’ chambers on how to set up and run ProcureCos
+44 (0) 7766 365 412
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