The government’s latest consultation paper on legal aid makes grim reading for any solicitor who undertakes criminal defence work and, indeed, for many providers of other legally aided work.

The headlines have majored on the Daily Mail-pleasing stories of taking much prison work out of scope, requiring a ‘meaningful connection’ with the UK before civil legal aid can be obtained and making rich criminals pay for their defence.

For the profession, however, these are of minor significance compared with:

  • An overall cut of £220m in the criminal legal aid budget – more than 20% of the current spend; and
  • A price-competitive tendering process which:1. Is intended to reduce the number of direct providers from 1,600 to around 400 - i.e by 75% - though it envisages that many existing providers would continue to the work through sub-contracting;2. Will set a cap on bids of 17.5% below the existing rates;3. Will abolish any freedom of choice of solicitor for clients – who you get will be judged either at random, according to your birthday or your surname;4. Begin in October with a view to contracts being in place by October 2014.

There are plenty of other proposals, including significant cuts to public law family fees, eligibility for legal aid for judicial reviews and so on, which aren’t good news either. Today, however, let me deal with tendering.

There are three major pieces of thinking behind the government’s proposals on tendering:

  • It needs to save significant amounts of money and there is, it says, no point in anyone disputing that;
  • The criminal defence industry is fragmented and inefficient – larger organisations, whether they be firms, joint ventures, consortia, or alternative business structures, are likely to be able to find economies of scale and deliver the services more cheaply;
  • A tendering process is an inherently good way of obtaining quality services at the best price.

There are some pretty major assumptions here:

  • Can the profession actually sustain a cut of at least 17.5% and deliver services at the same standard, whatever business structure it uses?
  • Even if it can, will firms be able to make the changes needed within less than 18 months, particularly given that it’s currently taking six months to get an ABS licence, if you want to go down that route?
  • As a matter of principle, is it acceptable for the state to dictate who represents a criminal defendant? Yet, if it does not, it is hard to see how the state can guarantee the level of work that firms will need if they are to deliver best value.

It would be open to us simply to say ‘no: we are not engaging with these proposals. They will lead to disaster’. It’s tempting to do so. However, we should not be under any illusions. The government intends to push this through. If we simply failed to engage we would lose opportunities to influence and modify the proposals, nor would we be supporting our members. The Law Society would need to think long and hard before getting itself into that position.

So what happens now?

Government has made it clear that it will listen to our ideas but that it has to make the savings. It’ll think about different ideas but it will have to make the savings anyway and the ideas will need to be good if it’s going to get over the basic assumptions that there are too many small firms and that competitive tendering is the way forward. We issued a consultation ourselves last week asking for the profession’s views. It’s vital that we hear from as many practitioners as possible with their own thoughts and views.

One option for government might be simply to take the saving directly from the existing fee rates – reduce them by 20% or more. The problem with that is that it (and we) doubt that the existing providers could survive a cut like that. Moreover, aren’t there significant problems with the present system (set out in our consultation paper) that ought to be addressed?

One suggestion is that the savings can be found elsewhere in the criminal justice system. We’ve already done a lot of work on this and made our proposals. Government’s view has been that these are useful but they won’t achieve the level of savings that are needed (and, because they involve lots of different agencies, may take time to be delivered). We need to be realistic that it is going to be difficult to find administrative or other savings that will meet this amount, but we’d welcome suggestions from the profession.

One surprising aspect of the consultation is the protection given to the bar. Essentially, Crown court advocacy fees are ring-fenced. This is disappointing. First, it is a disincentive for imaginative joint venture arrangements which ought to be being discussed between solicitors and barristers which might lead to savings. Barristers have a cheaper business model and ought to be able to compete on price with solicitors: it ought to be easier to sub-contract to them or to chambers of solicitor-advocates and the bar might well make it worth solicitors’ while to do so.

Instead the separate rates will perpetuate the incentives for solicitors to do the work in-house. Great for solicitor-advocates, not great for the bar and certainly not good news for achieving savings or a flexible legal services market.

What is essential, however, is that criminal practitioners engage with these proposals. They need to think about a number of things:

  • How will they affect the existing business?
  • What steps do they need to take to remain in business – should they be talking to other firms, chambers, thinking about joint ventures or forming an ABS?
  • What steps would firms like to take to improve their businesses – are there things that can be done through ABSs, outsourcing or joint ventures that might actually improve things and enable solicitors to concentrate on being lawyers rather than administrators?
  • What changes are needed to the proposals to enable them to make these improvements?

We need to know your thoughts on this so that we can (a) provide an effective response in the profession’s interest ourselves; and (b) provide the support that firms need.

This can only be an initial reaction to a consultation paper that’s full of difficult and challenging proposals. We’ll be studying it carefully to assess our best strategy in the profession’s interest. However, any criminal defence practitioner needs to read it and our consultation paper as well. Please let us have your ideas.

Mark Stobbs is the Law Society's director of legal policy