Ill-tempered with good news in places - Eduardo Reyes looks at the year ahead.
First day back at my desk after the Christmas break, and what news there is on the legal world is a surprisingly good cross-section of subjects we can expect to shape lawyers’ lives in 2014.
On Christmas day Clifford Chance filed accounts at Companies House that showed a 9% fall in profits for distribution among its members. A Solicitors Regulation Authority fine – for JK Rowling’s solicitor – has made headlines. Members of the criminal bar may, or may not, manage a strike. There’s a lot of chat about the housing market.
Research by Jomati shows that consolidation is sucking ever more firms into the UK’s top 100. Bickering continues as to the cause of high-profile law firm failures.
And yet another new minister, Simon Hughes, is about to be ‘on-boarded’ at the Ministry of Justice.
Readers may feel all this represents just more of what has been a steady and repetitive diet since, for the sake of argument, 2011. Perhaps, but across the year lawyers won’t find this is all background noise to a life of stable practice.
Take economic recovery. If the tide of the good times going out showed who was wearing a swimming costume in 2008, a rising tide in 2014 will show who, in the commercial legal world, knows how to swim.
Hard economic times changed the way clients managed their legal advice needs. General counsel demanded collaboration between firms with different cost bases, and were asked to account much more closely for the legal spend. Controls were put in place – new rules, new systems.
Very few people expect these to be dumped now that pressure on budgets is easing. More legal work was brought in-house, and the experience of doing that has been generally good.
The upshot is that law firms which understand and respond to this new way of working, and have changed their offering to reflect the pressures on GCs who being asked to do more with less, are the firms whose performance will recover. We will therefore see significant and growing gaps in the performance of law firms that, from the outside, look similar in size and target market.
Just over a year from a general election, relations within the coalition are set to be fractious, and politics at the MoJ will be no exception. Not a single one of the MoJ ministers appointed in 2010 is still in post, and whatever their private political beliefs, civil servants will miss the early collegiality of the Clarke-McNally era.
Chris Grayling is spending any airtime he is given railing against the Human Rights Act and the stymieing effect on all sensible policies of having Liberal Democrats in government. His new colleague, one-time barrister Simon Hughes, enters as a principled trouble-maker (from a certain angle), who broke with the party line on legal aid to oppose cuts.
The political effect of such a pairing on ambitious projects this close to the election is likely to be stasis, accompanied by a good deal of sniping between two camps. After a period of rapid change some may think MoJ stasis a good thing, but it’s going to look and sound ugly.
(The MoJ may, though, find itself spending extra in places to clear up the mess caused by implementing policies that were insufficiently ‘managerialist’.)
Many lawyers may feel the Solicitors Regulation Authority has been quite proactive enough in regulating them, but even with law firm failures to distract, it’s the regulator’s intention to become even more ‘active’. The SRA is under pressure to demonstrate it regulates the entire solicitors' profession, which in the case of in-house lawyers and the City means moving from ‘listening’ mode to something more demanding.
With the legal sector’s regulatory structure under review, it’s also fairly safe to predict that the name-calling of 2013 will continue between the SRA, Legal Services Board and Bar Standards Board.
Things may be nicer for bits of the high street – not words I’ve been able to type for a while. In parts of the country where property transactions have recovered, firms of all sizes are gaining from a market recovery.
Legally aided criminal work is obviously the sector’s big loser. There are no happy endings in 2014, though the suggestion at a recent Gazette roundtable that the number of barristers exiting criminal work would increase the work available for solicitor advocates (who could work to a different model) has an authentic ring.
In the public sector, the news will be better for central government lawyers than for those working in local government. A degree of empire building by TSol, for example, has sucked in work that was once outsourced.
By contrast local government legal departments – in many cases the crucible for significant innovation, will find that this contribution was insufficient to save them from huge funding cuts.
Few people will be thinking ‘2014 – bring it on!’. But expect some good news in places, accompanied by plenty of ill temper.
Eduardo Reyes is Gazette features editor