Co-op targets family legal aid - with loyalty points
Co-operative Legal Services (CLS) has a family legal aid contract and is already working on cases, ahead of the launch of its family law service in July, it revealed today.
The news followed the announcement of the mutual’s plans to recruit 3,000 staff and expand its legal services into all 330 of its high street branches, as part of its drive into the £8-10bn consumer legal services market.
CLS managing director Eddie Ryan told a press briefing that the family service, headed by Christina Blacklaws, obtained a legal aid licence in April and is already working on cases.
He said the service, which will offer fixed-price services, is receiving around 10 calls a day. The London office will be one of five regional ‘hubs’ CLS plans to open over the next five years, from where it will deliver its services.
Ryan said that the lawyer to paralegal/support staff ratio of the current 475 CLS employees is about 50:50, and he expected a greater proportion of the 3,000 new staff to be qualified lawyers - either solicitors or legal executives.
He suggested the ration would be higher for the family service than the other more commoditised areas of work.
Ryan added that CLS does not plan to recruit barristers, although it does instruct the self-employed bar to do representation work.
Ryan said that CLS, which already provides outsourced conveyancing services, also plans to set up an in-house conveyancing section. It has no intention to offer criminal services.
Clients using any of the legal services will be entitled to Co-op loyalty points, entitling them to a twice-yearly dividend.
CLS has offered legal services to its members since 2006 and the Co-operative Group has provided other services, such as funerals and banking, for years. Expansion into legal services, Waytes said is a natural extension of its other professional services.
‘We’ve been a hybrid alternative business structure for some time. Now with out ABS licence we can offer our services to the whole public. It shouldn’t be seen as revolutionary but evolutionary - it’s a natural strategic progression,’ he said.
Waytes said: ‘If we’re honest, consumer legal advice is delivered by local solicitors - some are great, but not all are equally good. For something as fundamental as access to justice that can’t be right. Access to justice is a fundamental human right. Everyone should be entitled to equal access to great quality legal advice.’
He questioned whether franchise models would be able to offer an efficient and consistent service.
Waytes added: ‘Some people are entering the market with venture capitalists - they see it as a gold-rush and huge opportunity to go “ching ching”.’
Ryan acknowledged that many lawyers were fearful about CLS’s plans. He said it is already winning business from large practices. ‘Every solicitor practice is the competition,’ he said, adding: ‘Good lawyers will continue to exist. Poor lawyers will go out of business and that’s the market share we’ll be grabbing.’
Comments
"Clients using any of the
"Clients using any of the legal services will be entitled to Co-op loyalty points, entitling them to a twice-yearly dividend"
Who is the "client" for the probate and estate administration matter and therefore entitled to the co-op points? The legal representative cannot benefit from his position as a fiduciary and therefore cannot accept the co-op points as to do so would be profiting from his position at the expense of the beneficiary. The beneficiary is not the client and therefore not entitled to the points. These co-op points may only be enough to buy a can of baked beans in one of the co-op stores but they are of money's worth. Are co-op guilty of offering financial inducements to fiduciaries in breach of their fiduciary duty to the estate?
It's also a breach of the
It's also a breach of the code of conduct to pay a referral fee for any matter which is legally aided. Those points confer a financial benefit for selecting co-op, and represent a referral arrangement with the client.
Come out fighting not whining
Rather than spending a lot of time worrying about whether or not Co-op is guilty of offering financial inducements or is in breach of the code of conduct (if it is doing either, I am sure it will be dealt with) solicitors should be concerned about and focussing on retaining the hard earned clients they have acted for in the past. Those clients are theirs to loose and for the Co-op to win.
I am certain Mr Ryan reads some of these comments (particularly the ones that imply some lawyers are spending to long looking at the less relevant details rather than the bigger picture) and rubs his hands with glee. We need to come out fighting, not whining.
Fear of the new
This comment is spot on.
The slagging off ABSs and hoping they will go away period is over. They are here now and as can be seen growing very, very fast.
Why don't you do something positive in response rather than sitting there and picking nits?
I guess the reason is simple: most high street and smaller firms i.e. under £20m revenues, simply do not know what to do, and frankly are scared and because they are scared and don't want to admit it they instead get mean about their new rivals whilst ignoring that they need to change. Change scares them because they have never had to contemplate a threat like this. They have avoided taking advice from those that understand the business and strategic aspects of law firm management and instead have hoped ABSs would just go away.
Well, the time is up. Firms in this segment have about two to three years to get their strategy right, whether that is becoming larger via merger, whether forming their own ABS, or simply becoming a better organised, better run operation. After that the tide will have risen too high for you to do much about it. I'm no saying all smaller firms will be wiped out, but the incomes of partners in such firms that do nothing will decrease (as they have been doing so for some time already). If you want to keep running your law firm as a going concern then you need to stop now and think about what is going to happen next.
I'd get your skates on.
Not worth the candle
Incomes of partners in such firms have been decreasing for 40 years. The risks of partnership have increased and increased in those years. It is getting close to the time when it will just not be worth it. You cannot have a middle management income with a risk equivalent to the President of a US company (ie the potential for complete ruin and a substantial time in jail). The Law Society and latterly the SRA have not addressed this problem and insist upon treating all solicitors as if they are living in the glory days of the 50s and 60s. The SRA is itself at risk and needs to modernise and get out of the 19th century penal mindset. They will not be able simply to rely upon the income of ABSs. Yes, change is needed but the authorities must change as well.
A good point
The ABSs are not going to be the promised land for aspiring young lawyers either. The wages will be low and advancement to partner - if they even retain such a role - will be extremely rare. Think more of becoming a 'service line director', and they'll not need many of those.
this is probably not exactly what most law students contemplated. ...like an art student with ambitions of changing the world forced to work in a factory churning out mass produced pictures of dogs playing poker.
that said, previous comment about the risks to smaller firms remains. ABS may not be pretty, good, or positive, but these businesses don't really care.
CLS and family legal aid
I don't think that people should be too harsh on Matthew and C Cook because the points they make need to be addressed, and it is possible that they haven't been considered so far, but I do agree with Rob Hailstone that CLS will deal with them. These issues though are not as fundamental as those concerning other new entrants to the legal market that have not gone down the ABS route.
What I think is very interesting, purely as an observer, is that CLS are conducting family legal aid and have employed a very well respected solicitor, Christina Blacklaws, to head the service.
Making legal aid work pay is, I understand, very difficult and, with the new reforms, publicly funded family work will be confined to the extremely complex and emotionally charged areas of domestic violence, forced marriage, and children including their care, supervision and removal.
It will be very interesting to see how CLS deal with these issues in practice. It would have been very easy for them not to have included these complex areas in their offering.
Some Observations
I'll state at the outset that I don't practice family law and don't act for individuals or do legal aid so the Coop's move may even benefit my firm because of an increase in claimant work in general. Therefore I have no vested interest in "slagging" off the Coop. However, I think they are slightly naive in their new venture.
Legal aid family law is not a profitable area. It is also one of the most difficult to manage because the clients are extremely difficult, from poor backgrounds and often with little education. They are also impossibly demanding and cases can be very, very contentious. Expanding into this area will cause complaints, and damage to their brand as well as massive workload for little reward.
Family law seems to be the area the Coop wishes to move into, however it has failed to see the massive problem with it's business strategy. It is attempting to market to its own, very large, consumer client base. Those people who are members and who own bank accounts with them, shop at their stores etc. Very likely, in a family, both partners will be members, shop at their stores and quite probably bank with them. If the Coop acts for one party in a messy divorce, childcare issue etc, or even just acts against the other party generally in a break up, the other party is no longer going to use their shopping/banking services because they are being petitioned/sued by them.
They are attempting to be all things to all men but they don't seem to realise that it is impossible to move into the legal sector without causing conflict with its other business interests. In becoming the biggest consumer law firm in the UK, it will undoubtably damage its other interests, especially by targetting family law. How a business this size cannot see this conflict, I don't know.
Further, 3,500 staff, most of them lawyers? They'll be on subsistence wages with no career progression, trainees will be taken on, rotated and then either dumped on the market or paid 20k pa forever. Not good for the profession in general.
Some observations 2
The post about the problems of doing family law is spot on. One problem that the Co0p will have to contend with is the long delays in getting paid. The supermarket financial model is that the goods have all been sold for cash, long before they pay the supplier. They will have to find a way of working to a model of doing a lot of work, and then having to wait ages for very modest payment.
The point about the acrimony of family proceedings is a very good one. I was at a management course recently and the issue of managing clients expectations in divorce work came up. There was much sniggering when it was mentioned, and from the comments made, there seemed to be a consensus that expectations were totally unrealistic and both parties could end up highly dissatisfied, and blame their lawyers. This was exacerbated in legally aided work, because of the absence of the discipline of having to pay for it all. Disputes could be endlessly prolonged over comparitively minor issues.
Also, the risk of damage to the Co0p brand is high. "I went to the CoOp and lost my children" makes a better story than one about some firm of solicitors that no one has heard about.
It will all make very interesting watching.
Stragtegy
The money won't be made from the Legal Aid but will be made from cross selling financial services. This will be diificult because the people who have Legal Aid divorces are not high end but the CO-OP will try. This strategy could cause problems with the SRA but I'm sure that the CO-OP will have enough influence to counter the SRA, once the Labour Party return to power. The SRA, like all bullies, kicks down but licks up.
More money
I agree. Legal Aid is not the best paid work, but if they can get another home insurance, car insurance, pet insurance, life cover, health cover, or funeral plan from just every other client it leads to a great increase in profits all they need to do is recommend they go to their local branch and speak to them.
I am not going to be slagging
I am not going to be slagging off CLS, although I fundamentally believe the whole thing is a mistake and it is simply a question of years before the first "scandal" involving a large ABS (whether it be that it goes bust taking client's money that is not protected due to failure of enforcement by the SRA who don't want to upset their new baby; whether it be clients getting sold down the river a la unenforcable credit agreements; whether it be scumbag salesman doing a runner with client account) happens. When it does "lessons will be learned", it will all be blamed on three rogue fall guys and things will move on.
It is clear (as per threads on Stobart Law and Family Law Clinic, as per the deliberate false advertising by QS, and many other instances) that the rules will not be enforced against ABSs. So no point moaning about it.
A previous poster asked the question whether CLS will employ women from "lower socio-economic backgrounds" wearing a smart uniform and namebadge.
Well my firm does exactly that. Our office is not in a business park - it is on the High Street, slap bang in the middle of the pedestrianised zone.
We have a walk-in policy. I often sit in the front office (what in a traditional law firm may be called "reception"), and indeed sit at reception on occasion.
Qualified lawyers wear business suits; non-qualified full-time staff wear the staff uniform and name badges. We are friendly and approachable. We offer fixed, low fees, and no-win no-fee.
Our "legal assistants" (which is what we call our staff) are predominantly women, and yes, they don't come from a particularly wealthy background.
Neither did I - I grew up on a Council Estate in Salford, so I am proud that we are bringing employment opportunities.
The reason we don't employ large numbers of qualified staff is not "dumbing down" (my staff probably will qualify eventually through ILEX, and many a trainee I have come accross couldn't even tie their own shoelaces). The reason is is that qualified staff are not necessary. They never were.
This is hard on trainees, but there is ridiculous oversupply. The country got on perfectly well with only 30,000 qualified solicitors a generation ago, and so there is simply no need for 120,000 now. Harsh fact of life, but true.
So what I would say to CLS is simple:- "bring it on!"
PS Questions do need to be
PS Questions do need to be asked about the Legal Aid Franchise though.
The judicial review of the family award was won because they granted contracts to firms without checking whether they had category supervisors actually in place.
CLS appears to have been granted a franchise (which unless I am mistaken - I could be, as I don't do legal aid) which wasn't advertised as part of a bid round, and which was awarded despite the fact that the category supervisors weren't in place (unless Christina Blacklaws can supervise 3,000 people working out of six regional hubs and 300 branches). Indeed they presumably weren't even an authorised ABS at that time.
No doubt high level meetings occurred between Co-Op and the LSC to make sure that the right result occurred.
CLS
According to today's "Times", "The mutual said yesterday that it would invest 'tens of millions of pounds' in the next five years to achieve its ambition of building Britain's largest retail legal business".
It may prove to be a disaster for the Co-operative group and it may be that aspiring young lawyers will not find it a very satisfying place to practice, as has been suggested above.
However, as George Bull of the accountants , Baker Tilly, who has been looking at potential developments in the legal sector for a number of years now, is reported also in the "Times" to have said, "The Co-op will become a force to be reckoned with".
Be afraid...
If you're a legal aid family lawyer I'd guess that this lot are after your contract in the next bidding round.
Given that they're abolishing
Given that they're abolishing most of it, I wouldn't worry too much.
Oh!! I know the situation is
Oh!! I know the situation is very critical in this issue and I think every person should be aware of this.
"Co-op: good with food..."
so, why instruct them on a matter of law?!
Incidentally, under LASPO (only statutory definition of referral), the client is excluded from the definition if you read the small print. The MOJ had provisions to regulate this, but, strangely, they have been sat on by government committee. True! Now why don't the Gazette report on that one?