Going it alone

Plans to relax practice rule 4 have intensified the pressure on sole practitioners to stop commercial organisations muscling them out of work.

Jeremy Fleming looks at survival in this tough area of practice

Solicitors at last month's Sole Practitioners Group (SPG) annual conference were given a morale boost by the Law Society's Deputy Vice-President, Ed Nally, when he took his guitar out at dinner and sang them some of his pop repertoire.

Those meeting in Manchester needed a break, for sole practitioners seem to have much to be fearful of at the moment.

The message during Mr Nally's keynote speech was less light-hearted, and he told the conference that sole practitioners should meet the challenge of proposed reforms to practice, treating them as an opportunity rather than a threat.

Many sole practitioners are concerned about plans to relax the Law Society's practice rule 4 and allow employed solicitors to offer their services to the public.

This could lead to banks and building societies looking to offer legal advice in competition with high street firms.

It is a fear that Clive Sutton, a Lymington, Hampshire-based practitioner who became the new chairman of the SPG at the conference, understands well.

He says: 'The government seems to be determined to push legal services and legal advice into the hands of employed solicitors.'

Mr Sutton contends that this concept is 'incompatible with the core values of the profession, where advice and legal services must be given on an independent basis'.

He adds: 'Such a change to the rules will allow commercial organisations with big budgets to cherry-pick profitable types of work, and to pile it high and sell it cheap.'

The fear is that solos will lose out, though Mr Sutton says they are not alone.

'The ordinary small firm will be likely to lose the profitable parts of its business and be left with unprofitable work, if any.

This is a threat not only to sole practitioners but also to high street firms.'

His predecessor as chairman, Sue Carter, a practitioner from Brockenhurst in Hampshire, points out that reform of rule 4 is not the only potential threat.

She says: 'There continue to be some lenders which discriminate against sole practitioners, and it would be wonderful if this ceased.

Publicly funded work continues to be under severe pressure with yet further cuts appearing likely.

And it would be helpful if the necessity to obtain indemnity insurance run-off cover was removed.'

Conveyancing is one of the largest work sectors for sole practitioners, and SPG treasurer Christopher Stocker, who practises in Oxfordshire, says: 'I see the biggest challenges facing sole practitioners dealing with conveyancing as e-conveyancing, and being able to deal with the technology in order to compete on the high street with [so called] "conveyancing factories".'

Recent Law Society research found that of 602 medium and small firms, just 17 were not using PCs - all of them were sole practitioners, with a lack of knowledge given as the main reason.

But not all is gloomy in the solos' garden.

Ms Carter says niche practice areas conducting quality work will continue to thrive, as will those which develop on-line work.

She predicts: 'I believe those practising in general areas will find it more difficult because of the accelerating pace of change and competition.'

Mr Sutton says: 'Areas of sole practice which will thrive are those which benefit from a one-to-one solicitor-client relationship, particularly those which involve a long-term, even day-to-day, relationship.'

As an example, he cites family or business matters where continuity of the personal relationship is important, 'where the client does not wish to risk the possibility of being moved on to somebody else that he or she may not be happy with'.

Those that may do less well, he says, will be some areas of high-volume work where people may go to larger, cheaper providers where the work depends more on advertising and profile.

Mr Stocker agrees that personal service is the sole practitioner's forte: 'Those areas that will thrive are those that continue to give good personal service at reasonable rates and retain their client base.

Most clients still prefer to deal with one solicitor rather than a large firm.

Referrals between sole practitioners - or even on a limited basis between sole practitioners and larger firms - could be the answer to retaining client goodwill.'

The most recent Law Society statistics record 4,098 sole practitioners, of whom 21% are women (compared to 35% of all solicitors in private practice).

Solos are also far older than the average solicitor, around 51 for men and 45 for women.

Ms Carter says there are various issues that solos need to prioritise to succeed: 'They need to promote a personal service which clients appreciate, to have effective risk management in place, to choose one's clients, not take on cases which are beyond one's competence or for which one cannot give a good service due to time and other pressures, to manage cash flow, and to be ahead of trends.'

Mr Sutton says that as a group, solos must improve their profile within the profession and avoid the historical perception of their colleagues that they are a drain on the Solicitors Compensation Fund (which compensates the victims of fraud) because they do not have the check of another partner.

'They must be a responsible body and do what they can to curb the activities of one or two bad apples, which bring their sector of the profession into disrepute,' he says.

He stresses that sole practitioners are no more likely to be bad apples than other members of the profession, adding: 'Because of their independent views, many sole practitioners have the highest levels of integrity.'

Mr Sutton adds that the SPG is looking at ways of helping sole practitioners refer and, within the rules, share work with other sole practitioners and larger specialised firms.

'Those who can, should major on niche areas of work in which they can become known and attract a substantial client following.

For many, their niche is the close personal relationship they offer to a client.'

Sole practice is not for everyone, as Ms Carter says: 'There can be a sense of isolation, which is why it is essential to build up a network of contacts, and become involved in a local group of sole practitioners to whom one can turn to for advice.

Many of us in the SPG find we have far more support than we did before we became sole practitioners.

[But] holiday and illness cover can prove difficult.'

Mr Sutton agrees that loneliness can be a problem.

He says that 'isolation and lack of being able to share problems with others' are drawbacks for solos.

'The pitfalls of sole practice are mainly that one is working alone and taking on all the administrative responsibilities as well as dealing with clients.

This can be very time consuming and sole practitioners must be prepared to work long days, work weekends, and have few holidays.'

But solos are confident that they will continue to attract other lawyers into the fold.

Mr Sutton says: 'It is questionable whether young lawyers should be encouraged into or attracted to sole practice.

Perhaps it is better suited to those who have experience and have decided that they work better as an individual rather than as part of a group.'

But he says: 'Fellow sole practitioners should go out of their way to encourage independently minded colleagues to become sole practitioners and overcome the initial concern of taking on the complete responsibility for one's own practice.'

Mr Stocker adds a word of warning: 'If a young lawyer is independent minded, wants to keep control of his practice, and make all the decisions regarding expansion and what type of work he will undertake, he should consider sole practice.

However, he should be aware that his income will be dependent upon his expertise and he may wish to have the protection of employment with a larger firm.'

But there are always the benefits, which Ms Carter spells out: 'There is independence and freedom to make decisions relatively quickly.

There is far more opportunity to be flexible, and many find it a more acceptable way to work when they have other responsibilities such as young children.

Many sole practitioners are partnership refugees.'

Solos may be feeling the heat - but they are not quitting the kitchen.