Criminal legal aid firms are warning of ‘blood on the walls’ if the legal services commission introduces its model of compulsory competitive tendering. Chris Baker gauges reaction in the profession and hears fears that the scheme could lead to large advice deserts in London
They thought they would be partners in crime but now, according to practitioners, the Legal Services Commission (LSC) has thrown it all back in their faces.
After trying to forge links with legal aid firms through the preferred supplier pilot, the LSC has ruffled feathers by asking the same firms to bid against each other for a slice of the duty solicitor pie. Practitioner groups have been warning that such a move will prove disastrous for vulnerable firms, including sole practitioners and those representing ethnic minorities.
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Compulsory competitive tendering (CCT) has been rejected elsewhere in the public sector. Critics denounced it for being overly prescriptive, with a fascination with costs at the expense of quality. It also spawned an entire generation of consultants hovering over tender-writers and bidders alike, advising them on how to bend, exploit or circumnavigate the rules.
There has long been anxiety that such a massive change is to be piloted in London of all places, the largest market, accounting for 22% of the ‘lower work’ budget. Usually pilots are far smaller, controllable affairs that are then rolled out to bigger markets. The LSC says research suggests that London is the most over-supplied area, and thus the biggest savings could be made there.
The London Criminal Courts Solicitors Association (LCCSA) argues that it is ‘bizarre’ to pilot managed competition in an area as diverse and complex as London. Avtar Bhatoa, a partner at London criminal law firm Bullivant & Partners and an LCCSA member, says: ‘The consequence of this will be large advice deserts in London, mainly on housing estates where law firms will disappear. The commission is trying to fatten up some firms and the consequence of that will be the destruction of high street firms who have been there for donkey’s years and provide a holistic service.’
The LCCSA is certain that the proposals will lead to a bonfire of legal aid firms. ‘We predict that between a third and a half of the 500 solicitors’ firms in London offering criminal legal aid will be forced out of business if these changes go through,’ president Angela Campbell says. ‘Some of these firms are doing a small amount of criminal work but they might be related to other meaningful areas like mental health and housing.’
It is these so-called dabblers that may well end up dropping out, although the LSC says it recognises that ‘many firms currently undertaking small amounts of work may be high-quality suppliers’. LSC figures show that a third of the 500 London criminal legal aid firms earned less than £50,000 last year from ‘lower work’ – police station and magistrates’ court advice.
‘There will be a reduction in the number of firms – it is inevitable and in the criminal context probably beneficial,’ says Richard Moorhead, director of research at Cardiff University’s law school. ‘My worry is how mixed and criminal/civil firms who lose out will respond. Will withdrawal of criminal contracts for these firms mean they pull out of legal aid all together? The LSC needs a strategy to deal with this.’
Even the larger firms are worried that they may have to pull out of criminal legal aid if lesser players undercut them. Stephen Hewitt, managing partner at leading south London criminal law practice Fisher Meredith, predicts ‘blood on the walls’. He argues that most firms will be able to meet the quality criteria, so the process will be entirely reliant on price.
‘Firms that are better resourced, have better training supervision and more expertise in interviewing witnesses and forensics experts will be penalised,’ he says. ‘Instead, paying lip-service to proper quality will be of more benefit to firms.’
A reduction in suppliers will inevitably lead to a reduction in choice for clients, according to Legal Action Group policy director Nony Ardill. ‘This problem may not be apparent in the beginning, but after a few years the number of contracted suppliers could be whittled down still further to, say, one or two big firms in each bid zone with the smaller players getting squeezed out,’ she explains. ‘Clients could be left with little or no choice and this would not sit well with the government’s present commitment to ensuring a better deal for consumers in the legal services market.’
Andrew Bishop, a partner at Brighton firm Bishop & Light, agrees: ‘Proposals to assess bids on price alone, once a minimum quality threshold has been passed, is discriminatory in terms of race and disability and will also penalise against firms dealing with political protest cases.’
Dealing with people with mental health problems, or who need an interpreter, or have been arrested at a political protest and have no prior convictions often takes longer, leading to higher costs, he explains. If the average cost per case is higher, firms dealing with such clients are unlikely to win a bid, and those that do win contracts may not be able to do the job properly.
Small, specialist firms such as black and ethnic minority practices face a further obstacle. Elsewhere, CCT gave rise to a new market for consultants advising on how to beat the system. If a firm does not have the resources, its bid will almost certainly suffer. Yvonne Brown, chairwoman of the Black Solicitors Network, says most of its members would not be able to afford consultants to devise their bids. The system could prove to be ‘inherently unfair’ as firms with a large ethnic client base would be immediately viewed as suspicious because of different outcome profiles, she adds.
In addition, by driving down costs, or ‘driving people to run their practices from their own front rooms,’ as Ms Campbell puts it, the LSC has sparked real concerns that the quality of advice on offer will plummet. ‘It will reduce the quality of services to local communities not just in criminal but also civil aid,’ warns Ms Campbell. ‘We will resist these proposals every step of the way.’
By and large, solicitors agree that the quality of advice will suffer if firms have to bid under unbending specifications for time taken, travel, waiting and costs.
‘There are certainly concerns about quality,’ Ms Ardill says. ‘We are pleased that the commission is planning to use peer review as a means of testing the quality of bidders’ work. But it is unclear what they mean by “appropriate monitoring” of quality after bids have been allocated.
‘There will be considerable business pressures on firms to turn cases around quickly and this will create downward pressures on quality.’
Over the course of a three-year contract, a firm’s work can vary a great deal, so the LSC will have its work cut out monitoring them all, Ms Ardill adds.
As for the bar, David Spens QC, chairman of the Criminal Bar Association, is convinced the move is paying merely lip-service to quality and that there is only one true criterion for the LSC – cost. ‘This proposal will accelerate our descent into a two-tier system of criminal justice,’ he says.
Justin Kitson, chairman of the Bar Council’s young bar committee, predicts that the consequences for junior barristers are likely to be swift and irreversible. ‘There will be an incentive for solicitors to pass complex cases paying low rates to young barristers struggling to repay the costs of their lengthy training,’ he says.
‘These cases are precisely those which require the greatest care and demand representation by specialist advocates, therefore the government must recognise that they should be properly remunerated. This change is not in the public’s best interest.’
He says the proposals ‘will be instrumental in making the young criminal bar a place only for those who can afford it. Talent and diversity at the criminal bar will suffer, as will criminal justice’.
But Mr Moorhead maintains that financial constraints have forced the commission’s hand. ‘Research that myself and others did for the old Legal Aid Board (LAB) has shown clearly that there is a risk to quality,’ he says. ‘That is why the LAB/LSC has resisted CCT until now, but they are caught in the vice of unsustainable budgets.’
Mr Bishop takes issue with the consultation paper’s claim that the current system ‘provides incentives to maximise hours worked’. ‘It is a financial incentive to do the case properly,’ he counters. ‘The proposed system has the reverse incentive in that firms will maximise profits by doing the least amount of work possible on a case. That incentive is clearly contrary to the client’s interests.’
‘Clients will find that cases won’t be prepared properly because firms bidding at the lowest prices will do the minimum work,’ adds Mr Hewitt. ‘They will undercut other firms and do the work at lower quality levels.’
Legal Aid Practitioners Group director Richard Miller says: ‘The counterpoint to the attempt to drive down costs is that quality will inevitably suffer. If the government is paying a single price for all cases, it is naive to believe that the more complex and therefore expensive cases will continue to get the resources they need.’
The commission insists that safeguards are in place to ensure quality is not adversely affected. ‘Competitive tendering will draw on a number of quality measures that are being developed in partnership with the legal profession and as part of our overall supplier management strategy,’ a spokesman says. ‘These measures focus on the quality of the advice provided and the outcomes achieved for the client.’
Not everyone involved with legal aid is convinced that quality will plummet under CCT. Andrew Keogh, a partner in the Manchester office of national criminal law firm Tuckers, says: ‘We already undertake most lower-courts work within the confines of a fixed-fee system and it is hardly a responsible negotiating stance to start by conceding that we would not do work to the same standard. The time has come to stop dwelling on what we as a profession have lost and instead concentrate on what can be built for the future.’
That future under ‘managed competition’ constitutes a dilemma for Mr Keogh. ‘On the one hand, [CCT] smacks of disloyalty to fellow professionals, but on the other it is an opportunity to provide stability and growth at a time when it would be foolish to think greater returns could possibly come from increased rates of remuneration.’
Even though the LSC predicts that it can make savings through tendering, the fall in the number of firms claiming from the fund could be the answer to current funding problems in legal aid, he explains.
Some firms are already gearing up. The future could involve collective bidding by networks of legal aid firms, rationalising to exploit economies of scale.
An e-mail sent by a member of a legal aid network, seen by the Gazette, says: ‘To my mind this is crunch time. If the profession has a future then we must learn to negotiate together.
‘Individually we have no negotiating power; we can only try and undercut our rivals – not in the hope of making a financial killing but because a lot of us are too old to re-train and too indebted to walk away. With a three-year contract or less – at the end of which you could be outbid by someone operating out of their living room with a mobile telephone – why invest in an office or IT? Under these proposals only a mad man or woman would enter the profession, other than as a salaried employee of the more expensive Public Defender Service.’
Solicitors in other fields have shown over the years a general inability to work together – but it would be interesting to see what would happen if firms agreed not to undercut each other and instead uniformly bid at a level higher than that at present. This may not happen in a market as large as London, but is possible in a smaller city.
CCT has raised hackles – and provoked massive change – wherever it has been introduced. Only time, and the consultation process, will tell whether it will create the same scandals in legal aid as it did in the local authority sector.
Chris Baker is a freelance journalist
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