Necessity is the mother of invention, they say, and lawyers who are intent on surviving the age of austerity need to innovate to survive. The profession is fighting on multiple fronts: a double-dip recession, new competition flowing in from the ongoing programme of liberalisation and savage legal aid cuts heading their way. So change has to be the order of the day. The Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) is predicated on the slashing of £350m from the £2.2bn legal aid budget by removing from scope whole areas of law - most social welfare law and family law excluding domestic violence - from April 2013. The legislation will also radically redraw the ‘no win, no fee’ model by removing the recoverability principle and banning the payment of referral fees.
The Law Society last month unveiled its own post-LASPO initiative seeking the backing of City firms for a project ‘aimed at helping high street practices and their clients meet the challenges posed by legal aid cuts’. ‘The spotlight is on "access to justice",’ comments Law Society president Lucy Scott-Moncrieff. Should we expect Chancery Lane to keep the spotlight on legal aid and ‘access to justice’ following the Sound off for Justice campaign? ‘It is an integral part of the rule of law - and we are all for the rule of law,’ Scott-Moncrieff replies. ‘It’s a standing item on our agenda.’
Tapping into the latent legal market
‘I always thought that as a lawyer I couldn’t afford my own services,’ reflects Christina Blacklaws, who joined the Co-operative Legal Services at the end of last year and chairs the Law Society's legal affairs and policy board. ‘No one likes hourly rates.’ Earlier this year the Co-op announced plans to recruit 3,000 staff and expand its legal services into all 330 high street branches. At the end of last year, the retailer hired a team of family legal aid lawyers. It now has a family legal aid contract and plans to introduce a fixed-fee tariff for family services.
Blacklaws reckons it will be ‘as reasonably priced as we can possibly make it’. There is, she claims, a good fit between social welfare law and the retailer’s ethos. ‘The social purpose, which is at the core of our principles, distinguishes us from others,’ she maintains.
More surprisingly, US companies have been watching the UK market. ‘There are a lot of lawyers and a high demand for legal services, but still people go without. Why?’ asks Rocket Lawyer’s Charley Moore. ‘The answer is the product is too expensive, or otherwise inaccessible. This consumption gap will only get worse as people usually covered by legal aid find themselves out in the cold.’
Rocket Lawyer plans to launch in the UK later this year and has just appointed Mark Edwards, who headed the legal business development team at LexisNexis, as UK general manager. The San Francisco-based innovator only launched in 2008, raised $29m last year and includes Google Ventures as one of its investors. Rocket Lawyer styles itself as ‘the free legal document service’ and offers hundreds of model letters, forms, agreements and templates. Lawyers do not pay to sign up and their profiles are featured on the site if they do. There is a separate ‘Rocket Lawyer On Call’ service that includes monthly/yearly legal plans. If a customer instructs a lawyer under that scheme then a lawyer is obliged to discount their hourly rate. ‘What we are trying to do is increase access to justice by lowering the barriers to entry,’ explains Moore.
As Richard Miller, head of legal aid at the Law Society, points out, there will still be over £1.5bn going into legal aid. Crime, public law family, mental health and asylum are ‘untouched by the scope cuts’, as are some of the smaller categories, and most housing litigation (as opposed to advice) will still be in scope. But as Miller puts it: ‘For firms doing private family and social welfare law work on legal aid the changes will be revolutionary, and as with any revolution, there will be casualties.’ Scott-Moncrieff, a legal aid lawyer and managing partner of Scott-Moncrieff & Associates, stresses that the project is not just about LASPO but a response to a newly competitive market. ‘At the Law Society we consider small firms, local firms, as an incredibly important part of legal service provision,’ she says. ‘It is important that we don’t lose those firms and that they don’t get hoovered up into larger and more commoditised organisations.’
Should the pro bono community do more?
What is the City’s commitment to access to justice and how does it align with a pro bono movement led by City firms? ‘We have a long-standing commitment to both pro bono and community work,’ says Chris Marshall, who leads Allen & Overy’s pro bono and community affairs team. ‘We feel we have a responsibility both globally and also to our communities.’
Jake Lee, one of A&O’s pro bono and community affairs managers, explains that the firm’s law centres partnership scheme is part of its ‘access to justice’ programme. ‘We believe strongly in access to justice,’ he says. ‘The core elements are our work providing face-to-face advice but also giving strategic advice and helping to develop innovative solutions in the post-LASPO world.’
A&O runs weekly legal advice clinics across London, including at Battersea Legal Advice Centre, Island Advice Centre and Toynbee Hall. Lee says A&O has been working with law centres for over 20 years and played a key role in rescuing South West London Law Centres when the centres faced insolvency at the end of 2009. ‘Our experience there led us to work with trusts and philanthropists,’ says Lee. ‘Some are relatively new to the "access to justice" world and others have a wealth of expertise such as the Barings Foundation.’
Marshall calls it a ‘holistic partnership’ starting with face-to-face volunteering. ‘We always thought law centres alone were very important, but if you do not complement them by supporting the organisations themselves, you’re not having the greatest impact,’ he says.
Does the relationship change next April with the legal aid cuts? ‘The way in which we responded to the problems faced by South West London Law Centres is an example of the challenges the sector will face after April,’ replies Lee. ‘We hope to bring our expertise to [the debate going forward].’ Alasdair Douglas, chairman of the City of London Law Society and previously senior partner of Travers Smith, says: ‘City firms offer a lot of support for law centres both financially and through our people going to law centres for an evening. We do a huge amount in furthering a long tradition in pro bono work.’ A tradition that goes back 30 years, he says, adding that the legal aid cuts ‘will mean even more work and even more pressure’.
So should the pro bono community do more in the context of the legal aid cuts? Douglas is not convinced: ‘It is a strange analysis to say City lawyers - who have no real expertise and no wish to be in the legal aid sector - should be doing more, when they are doing a huge amount voluntarily simply because they have expertise in the law and look to give their free time to those who can’t afford it. We are streets ahead of most professions in terms of giving our time.’
The introduction of alternative business structures (ABSs) last October under the Legal Services Act 2007 accelerates the adoption of business practices that are mainstream in other sectors but have yet to be embraced in the law - for example, fixed-fee deals and online legal services, both of which are being heavily promoted by the new market entrants. The availability of fixed-fee services in family and divorce work is to be the main feature of the Co-op’s push into the legal services market and is rightly claimed as an innovation. The retailer was the first consumer brand to achieve ABS status and, prior to that, hired leading family legal aid lawyers from TV Edwards.
Another example of innovation is offered by San Francisco-based online legal documents business Rocket Lawyer, which plans to open in the UK later this year. Launched in 2008, it reckons to have had some 20 million American users this year and it seeks to tap into what founder Charley Moore calls the ‘latent legal market’.
It is not just lawyers and new market entrants looking at ways to extend access to justice. Politicians are looking hopefully (possibly too hopefully) at the profession’s own collective pro bono endeavours to meet increased demand as a result of the legal aid cuts and, in particular, the expected surge of litigants-in-person. A report last year by the Civil Justice Council predicted ‘self-represented litigants’ (as it rebranded LiPs) would become the ‘rule rather than the exception’.
Legal aid minister Jonathan Djanogly, in a ministerial statement last summer, identified a package of ways to promote access to justice in the context of the legal aid cuts, many coming with some historical baggage: for example, the CLAF or contingent legal aid fund (first floated by Justice in 1966); collecting the interest from solicitors’ client accounts (already rejected by the City firms); and legal expenses insurance (explored by the Conservative government in the early 1990s as a way to make up ground lost as a result of declining eligibility).
CLAF: an idea whose time has come?
The so-called CLAF (or contingent legal aid fund) is either a brilliant idea that has never had its day, or simply unworkable. It was first floated by Justice in 1966 and has resurfaced as a possible ‘access to justice’ solution in light of LASPO.
The ‘classic model’ for a CLAF (according to a 2009 Bar Council discussion) is where the fund’s administrators agree to fund a claim if the chances of success and damages justify support. ‘In return the client, upon success, pays a percentage of the damages recovered back to the CLAF,’ it says. ‘The costs of the successful case are recovered in the ordinary way from the defendant. Contributions received from the successful claimant’s damages fund future activity.’
Cuts to the legal aid scheme and the coalition government’s revamp of CFAs were ‘likely between them to leave a gap’ which a CLAF ‘could fill’, reckoned the Judges’ Council response to the government’s legal aid consultation last year.
The Bar Council launched a working group to explore its viability chaired by former bar chairman Guy Mansfield QC. ‘I think at present the position is that we want to wait and see how the Jackson reforms bed down,’ he says. It has been argued that a CLAF cannot exist with the existing ‘no win, no fee’ regime because of the risk of cherry-picking (in other words, the cases with the best chances of success will opt for a ‘no win, no fee’ and a CLAF will be left to fund cases with low chances of success).
For clinical negligence and personal injury cases, Mansfield points out that a CLAF ‘might be interested in funding investigation in return for a slice of the proceeds if the matter is pursued. That would be in addition to backing cases from start to finish if that seemed appropriate.’
Legal aid will remain for investigative costs in major perinatal brain injury claims. ‘A CLAF might be interested in taking on some of those cases but not if the cherry-pickers take all the best ones,’ he says. ‘It remains to be seen if the new limits to what can be taken by way of success fee from damages recovered leads to less cherry picking. We need to see what the changes are and how they operate, and what their impact is in practice before we can look at any sort of potential business case.’
But what should those firms be doing to survive the LASPO cuts? ‘Don’t just sit there and wait until it hits you,’ advises Miller. ‘It is not going to go away. Firms need to work out what will be the effect on their caseload and start taking positive decisions.’ As for longer-term strategies to cope with the post-LASPO/LSA landscape, Miller says the Society will be helping firms take advantage of the latest technology to engage with clients, developing the potential of law firm websites as well as using YouTube channels, webinars and deploying social media. Miller cites the Accident App developed by Manchester firm Croftons solicitors to assist those involved in road traffic or workplace accidents. The free download can be used to capture evidence of an incident including witness statements, photographs and audio recordings.
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The Royal Courts of Justice citizens advice bureau provides a lifeline for an increasing number of people who cannot find or afford a lawyer. Its director Alison Lamb reports that enquiries have already shot up from 3,705 to 8,436 in the last 12 months. This is before the legal aid cuts.
‘We know we are going to have to deal with far greater numbers of litigants-in-person,’ she says. ‘We are already seeing more people and we are doing more for them. We simply can’t meet the need by individual face-to-face, one-to-one advice. There aren’t enough hours in the day. We are looking for ways to help them as well as opportunities to support other agencies.’
To that end, the CAB has been working with City firm Freshfields on what Lamb calls ‘a different form of pro bono corporate support’. They are working together on an online case management tool, CourtNav, which enables users to navigate their way through the legal process. ‘Many firms provide lawyers for law clinics and, in our case, they give people during the day which is a massive contribution. Plus we also get financial support to the tune of £70,000 a year from about eight firms.’
The CourtNav software, which is in development stage, will guide users through the legal process under the supervision of advisers; provide advice and warnings to DIY lawyers; assist with completing forms; and allow for those forms to be checked by advisers. ‘If we are able to retain our face-to-face service - obviously that is dependent on funding - we want to prioritise complex cases, such as the people who do not speak English and those who really are struggling to get through the process on their own. We think there are thousands of people who, with some assistance, might be able to do it themselves.’
‘We decided to go down the route well before LASPO as a way of getting work directly and effectively,’ explains managing partner Simon Leighton. ‘When we launched we did not know about the referral fee ban but we knew that it was important to try and capture leads quickly and act in response to large brand names coming into the market.’
Although Leighton reports that take-up has been slow - only 400 to 500 downloads to date - he also notes that embracing new technologies has a value in communicating a positive message to clients. The app has been relaunched as the Car Compass app and includes features helping drivers find their way back to their vehicles, locating nearby car parks and reminding drivers when car park tickets are about to run out of time.
What about insurance?
What about the prospects of legal expenses insurance filling the gap left by legal aid? For £30 consumers can buy a before-the-event (BTE) insurance policy with up to £100,000 of insurance cover, which represents astonishing value-for-money. Policies are available to half the households in the UK through house or contents insurance.
BTE has been both endorsed by Lord Justice Jackson in his final report on civil justice costs and floated by the coalition government as a way of promoting access to justice. One of the reasons that legal expenses insurance is so affordable is because most people who potentially have the benefit of the insurance do not read the small print and consequently do not rely upon it.
Paul Asplin, chief executive of Europe's largest legal expense insurer DAS, is far from convinced about the ability of LEI to fill the gap left by legal aid. ‘Some areas of law traditionally aren’t covered - for example, family law or criminal prosecution,’ he says; adding that insurance plans in other jurisdictions do cover these areas and so ‘that’s not a problem necessarily’. ‘It certainly is not beyond the wit of insurers to come up with the products,’ he says. ‘The real difficulty is how do you sell insurance to people who would have qualified for legal aid? The truth of the matter is that a lot of people in the income brackets do not buy insurance unless they absolutely have to.’ As Asplin, points out, 25% of the UK population do not buy household insurance and, he adds, ‘guess which 25% don’t… the very people who would normally be in the frame for legal aid.’
Miller also advises lawyers to ‘tap into a market that has long been neglected’ - in other words, those not eligible for legal aid but who cannot afford private fees. He flags up the Bristol Law Shop model where clients can pay £8 per five-minute unit of advice. ‘The client has control as to how much time is spent on each case - as well as paying probably half the normal fee that they would pay to be represented,’ explains Peter Browne, who set up the law shop some 15 years ago. This is not a way of ‘enticing a client into a more expensive service’, he insists. ‘We regard it is alternative service and as standing on its own feet financially.’
And can they make money out of it? Yes, Browne says. ‘Everything is done with a qualified lawyer and in the client's presence,’ he adds. ‘There are no files to open, no ongoing supervision of the case, no client money, no secretarial backup or book-keeping.’ Consequently, they can charge a lower hourly rate and still make money. Browne explains that the firm introduced the law shop idea when the Legal Aid Board introduced franchising and his firm stopped doing legal aid work. ‘So we put more energy into the law shop model and that restored our budget within a couple of years,’ he says.
- A free event, ‘Mitigating LASPO - the role of the Society and the profession’, will be held at the Law Society on 20 July, 9.45am-4.45pm For more information or to register, email charlotte.bloxham@lawsociety.org.uk.Jon Robins is a freelance journalist
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