Solicitors in Northern Ireland are used to living in the shadow of the bomb. So how is business in a more peaceful society? Grania Langdon-Down detects a mood of uncertainty

The new year has brought a special gift to the solicitors of Northern Ireland. Following an investigation by the Office of Fair Trading (OFT), many of the freedoms that have been enjoyed on this side of the Irish Sea for some time will finally be theirs.


Northern Irish solicitors will be able to advertise their fees, use comparative advertising, employ loss-leading pricing strategies to gain clients, and solicit potential clients, subject to certain safeguards (see [2005] Gazette, 1 December, 7). The Law Society of Northern Ireland (LSNI) has revoked the previous prohibitions following OFT concerns over the need for more competition between lawyers.

Rory McShane, who took over as LSNI president recently, says the changes will ensure the regulations comply with competition legislation. ‘It’s now a question of wait and see. We don’t know how people will respond to them. Solicitors already advertise, have brochures, Web sites, and mail drops, so how many will take advantage of comparative fee advertising, for instance, remains to be seen.’


The changes come as the profession focuses on its own Clementi-style review under Sir George Bain. The former vice-chancellor of Queen’s University in Belfast is expected to report in October, and will be looking at complaints handling and whether the Clementi-inspired reforms being introduced in England and Wales are applicable to Northern Ireland.


Mr McShane, founding partner of McShane & Co, a general practice with seven lawyers in offices in Newry and Kilkeel in Co Down, says: ‘One thing we will be stressing to Sir George is proportionality. What’s happened in England and Wales is crazy. The cost of it is completely mad – the proportionality stressed in the White Paper is just not there. The cost of putting these new structures in place will just get more and more, and if it has to be paid for by the profession, it will just spin back to the consumer, whom the government purports to be trying to help.’


When it comes to the civil courts, Northern Ireland is still waiting for the Woolf reforms. However, Mr McShane says: ‘Lord Woolf actually came over here to see how to do it. He was amazed how far head of the game we are. We have scale fees in our county courts up to £15,000. We don’t have conditional fee agreements and we don’t want them. The satellite litigation around them has been absolute madness. It just gets the profession a dreadful name.’


Amanda Wylie, a litigation partner with Arthur Cox Northern Ireland and a member of the LSNI contentious business committee, says the reforms should come in within the next year or two. ‘The decision was made in 2004 that the reforms should be brought in at one time and not piecemeal. But in the meantime, we are in no man’s land.


‘The profession is more or less happy with the system as it stands but realises progress has to come. Things like exchange of witness statements may bring benefits as regards High Court procedures, but we fear that we may get the worst excesses of the English system imposed on our system, and the two systems may not be easy bedfellows.’


Certainly the Northern Irish legal market is very different to England and Wales. With just 2,300 solicitors and 555 barristers, there are fewer lawyers in Northern Ireland than Clifford Chance employs globally (3,300). Some 88% of the 502 law firms are small general practices, with three partners or less, and half of those operate as sole principals. The three largest firms have 13 partners.


As in England, legal aid is a contentious issue, with any changes following the Carter review in England likely to be translated across to the Northern Irish system. One idea which has resurfaced, says Mr McShane, is the contingency legal aid fund (CLAF), whereby cases are funded on the basis that a percentage of the damages recovered is used to create a non-profit making but self-financing fund.


One area where the country is ahead of England and Wales is in home information packs (HIPs). It pioneered the home charter scheme ten years ago, which operates in the same way as HIPs in frontloading the work for vendors, except there is no compulsory survey.


Overall, there is ‘tolerable optimism’ among practitioners about the future of the legal market, which is making the most of the ‘peace dividend’ following the 1998 Good Friday Agreement.


During the Troubles, Mr McShane recalls how Newry was bombed regularly by the IRA. ‘I used to have a bar/restaurant which was bombed on two occasions, and I had the police coming to me on other occasions saying I was on a loyalist hit-list, so I must have been doing something right. You lived with the fear of attack and danger, but that’s all gone now.’


He says that while some firms were seen as representing one side or the other, there was always a crossover. ‘If you had a firm doing criminal law which had a good reputation, those charged with offences didn’t worry too much about the religious or political background of the solicitor, provided he could do the job for them.’


Tony Caher, senior partner of four-partner firm Campbell & Caher, a broad-based Belfast practice which includes crime, agrees. ‘There wasn’t the sectarian breakdown in the legal profession that occurred in other parts of society. That’s not just wishful thinking. That is the reality. A handful of lawyers who were involved in high-profile cases were very vulnerable – and some were murdered – but most lawyers wouldn’t identify with one side or the other and managed to stay outside the Troubles.’


However, the 1989 murder of Belfast solicitor Pat Finucane by loyalist paramilitaries continues to stir controversy, mainly because of allegations of collusion between the Ulster Defence Association and members of the security forces. There are finally plans for an inquiry, after years of campaigning by the Finucane family and legal and human rights groups, including the Law Society and Bar Council of England and Wales.


For Mr McShane, the ‘peace dividend’ has been significant. ‘In a town like Newry, 25 years ago we would have had 30% unemployment among men. We are now employing people from all over Europe.’


Rowan White is a commercial property partner with 11-partner firm Arthur Cox Northern Ireland, the stand-alone, full service Belfast office of Dublin’s Arthur Cox. He says: ‘The skyline has changed dramatically, with significant developments and regeneration projects which are primarily property-led, but with a certain amount of mergers and acquisitions, and corporate and commercial work following on behind.


‘I am tolerably optimistic about the future. Every day without a bomb scare or bullets is a plus. However, the business community gets very frustrated by the constant delays in the political process, which it feels constrains what it can achieve. It does not in any way, shape or form inspire inward investment.’


Brian Henderson is senior partner and head of banking and property with 12-partner firm L’Estrange & Brett, which is more than 200 years old. The firm has a formal ‘best friends’ link with Dublin’s McCann Fitzgerald, a move mirrored by many of the large commercial firms in Belfast. He says the property market is reasonably buoyant, while the past ten years have seen a big expansion in corporate work.


However, Mr Henderson agrees that the ‘peace dividend’ has not been as significant as it could have been. ‘People used to say money would flow in from America when things got sorted, but people only invest where they are going to see a return. If we were able to get our government back, I think the money would then flow in. Prices and wages here are still cheaper than in other parts of the EU, so it is a good place to invest.’


However, the majority of high street and criminal practices have had to change fundamentally as the political violence has diminished, and personal injury claims along with them.


Then, three years ago, criminal injury claims as a direct result of political violence went with the introduction of a new compensation scheme, which does not pay legal fees. Mr Caher adds that, ‘a huge industry grew up around claims against the police and state authorities whenever anyone was stopped or detained, but that has now gone’.


Add to that fewer employer liability claims with the demise of the ‘dirty industries’ of textiles, shipyards and agriculture; a reduction in road-traffic accident claims because damages have been forced down; the successful introduction of legal expenses schemes by insurance companies so cases are diverted through a few firms; the marginalisation of tripping cases ‘because no one believes anyone anymore’; and a fall in employment cases because of the costs regime, and things are looking tough for solicitors.


Mr Caher says: ‘The result is firms are amalgamating or expanding in other areas, such as family work. There is a lack of morale in those firms depending on legally aided work. The number of new firms opening is decreasing, unless they have a guaranteed source of work. We also don’t have any indigenous industry left here, so all the decision-making, all the real legal and financial work, is done in London, Dublin, Edinburgh or further afield. A lot of commercial firms here are really agencies.’


Mr Henderson disputes that view. ‘Yes, we do a lot of banking and other work on an agency basis for the Northern Ireland aspects of larger transactions. Sometimes they are led from London and sometimes from here. But we don’t see ourselves as agencies. The bulk of our work is from local firms.’


However, he acknowledges that the way the market operates is different to London. ‘You are dealing with a relatively small pool of solicitors and I suspect you get greater trust between them than elsewhere, because you are going to be meeting the same people next week on another transaction. If you mess someone around, you get a reputation. That oils the wheels during transactions, which is prob-ably good for the clients. There is also a lot of pressure on fees, so I think clients are getting a pretty good deal.’


But he admits there may be more to do: ‘All professions have to look to the customer, and I am sure there are many ways we could improve our service. It would be naive to believe everything was perfect.’


Grania Langdon-Down is a freelance journalist