The legal services commission’s preferred supplier pilot scheme looks set to be rolled out nationwide – but could it become a stick with which to beat the profession? Jon Robins reports

‘At last it feels like a proper, grown-up relationship,’ says Penny Logan, partner at London legal aid practice HCL Hanne & Co, of the Legal Services Commission’s (LSC) ‘preferred supplier’ pilot. The idea behind the scheme was to transform the relations of 25 select firms from the usual state of fear and suspicion to – as the LSC puts it – one of ‘mutual trust and respect’. The LSC has just published its evaluation of the first six months of the pilot, and is consulting on the development of the national scheme, due for implementation in 2006.


While such a miraculous change of heart on the part of the profession might not have been delivered, the results of the pilot have been ‘overwhelmingly positive’, reports Jonathan Lindley, executive director for service design at the LSC. ‘What has been most gratifying is that the pilot firms felt we had a much better relationship as a result of working in a different way,’ he says. ‘We recognise that the road hasn’t been entirely smooth over the last few years – that’s an understatement. But finding a way that firms have found constructive has been a real benefit for us, and that’s something we want to take forward in any national scheme.’


The commission says that 96% of those participating in the pilot described their relationship with the LSC as ‘better’ or ‘significantly better’ than before the scheme.


The preferred suppliers were given a tempting package of benefits, which included designated LSC ‘relationship managers’; a less intrusive approach with a lighter touch to auditing and assessment; access to long-term strategy information so firms can plan their businesses; better customer service, such as a 48-hour turnaround for all business processing; and the ability to make autonomous decisions about their clients’ cases.


So what do the pilot firms make of the experience? Ms Logan’s comments on the pilot were reported on the LSC press release. ‘The improved efficiency and dialogue between us has helped our practice, and more crucially, has indirectly benefited our clients,’ she was quoted as saying. But Ms Logan isn’t a totally convincing poster woman for preferred suppliers. ‘The point is not how great the pilot is, but just how awful the situation was previously. That’s the context,’ she explains.


Pretty much all practitioners attest, with varying degrees of enthusiasm, to the advantages of being on the scheme. ‘I see it as quite a positive step, and certainly it seems a way forward rather than the competitive tendering regime being brought in throughout the London areas at the moment,’ comments Maria Monan, a partner at London and south-east firm Edward Hayes. The appointment of a relationship manager has ‘worked exceptionally well’ and is ‘probably the best thing to come out of it’, she reports. Ms Monan also reckons that the expedited billing arrangements ‘save a lot of wasted time’. She says: ‘You get the impression that the relationship with the LSC has changed. Instead of assuming that we’re attempting to squeeze every single penny out of them and we are to be mistrusted, they’re attempting to work with us.’


Ms Logan sees the facility for firms to grant their own pubic funding as the best aspect of the pilot. ‘It is the ability to say that I am going to exercise the guidance, not some faceless bureaucrat [at the LSC office] in Red Lion Street,’ she says. ‘It is about saying you are grown-up enough to know what you would or wouldn’t grant funding for.’


Does it give the firms confidence to recruit? The ‘disappointing aspect’ for Ms Logan has been that there were no new funds to enable firms to grow. Richard Miller, director of the Legal Aid Practitioners Group and a Law Society council member, also thinks the incentives offered to preferred suppliers were not enticing enough to encourage firms to recruit in what is a particularly bleak climate for legal aid firms. ‘I think you need some specific financial benefit and, at the moment, although the lighter touch on auditing plus devolved powers go some way towards that, I very much doubt whether it is enough to make firms have a sea- change in the way they view legal aid at the moment,’ he says.


On the whole, Mr Miller says the scheme represents a ‘positive way forward for the relationship between the commission and individual firms,’ offering ‘tangible benefits for firms’. He adds: ‘We hope that this will mark a turning point in relations between the commission and the profession.’


Andrew Keogh, a partner at Tuckers in Manchester, one of the largest criminal defence firms in the country, says his firm made a decision ‘not to bother’ with the scheme. ‘We had to release a lot of information in order to participate in the pilot, some of it sensitive, and we didn’t feel at that stage there were any real benefits,’ he says.


‘We have a good solid relationship with the LSC and it sounded odd to us that [improved service] was being held out as some special prize. We thought that it was a minimum level of service we should expect.’


So where does the preferred supplier scheme go from here? In its welcome pack for the 25 firms involved in the pilot, the LSC was upfront about its intentions. It said: ‘In future, we will want all of our suppliers to be operating at a “preferred level”.... We won’t be contracting with suppliers who provide poor quality of advice, poor control of their costs and who fail to meet their contractual needs.’


Practitioners are bemused that an idea that was apparently conceived as a reward for ‘preferred’ firms is to become yet another hoop that all firms will be expected to leap through. Dave Wise, practice manager at Manchester firm Platt Halpern, which is also on the pilot, is ‘quite enthusiastic’ about the experience so far. ‘Not because of anything very specific in terms of any incentive or new power, but principally the benefit has been a much better level of service in terms of dealing with queries and complications quickly,’ he says. ‘Our work has been singled out and turned around really rapidly.’ But Mr Wise has ‘absolutely no idea’ what the pilot means in the long run, and questions whether the LSC could sustain an increased level of service as more firms become involved.


Mr Lindley says that the scheme is ‘largely about re-benching and marking the quality and value we expect from our suppliers’. He adds: ‘We believe that we can do that through the pilot. So why wouldn’t we want all our solicitors to be of that standard, if they are delivering better minimum quality standards than in the past?’. He says he expects all firms to become preferred suppliers ‘assuming it is possible for them to get there’.


Doesn’t the rationale behind having ‘preferred’ firms vanish, if it is anticipated that nearly all firms will meet such criteria? The ‘badge of differentiation would end in that scenario’, he admits.


Will the LSC keep its side of the deal by ensuring those firms receive a better level of service and, in particular, make sure that firms have dedicated relationship managers? ‘Absolutely’, replies Lindley. ‘That is why it is taking us some time from starting the evaluation through to launching the consultation before the end of the year, so we can really work through how we can deliver this.’


Mr Wise fears that being selected as a preferred supplier, which was ‘very much a carrot’, could easily become a ‘stick’ with which to beat the profession. He argues that it could become ‘a new franchise specification or quality mark, so it becomes a levelling criterion rather than an incentive for firms.’


He adds: ‘That is a really significant shift from something offered to a few firms with the intention of encouraging other firms to aspire to.’


Jon Robins is a freelance journalist