Law firms and other professional services providers are the least prepared for the impact of the National Information and Consultation Directive (NICD) and face embarrassing references to arbitration if they do not sharpen up, a survey by City firm DLA revealed this week.

The NICD - which comes into effect in the UK in March 2005 - obliges employers with more than 150 employees to establish staff works councils and consult on issues previously decided at executive level.

By 2008, employers with more than 50 staff will also be affected.

Four out of five respondents to DLA's survey indicated a low awareness of NICD.

Lack of awareness decreased by size of company, to 65% of those with more than 10,000 employeers who were unaware of NICD.

But the bottom of the pile were professional services firms - including law firms - 96% of which disagreed that there was a high level of NICD awareness in their offices, against a survey average of 75%.

The survey, with Ashridge Business School, polled 378 respondents, including law firms.

DLA partner Sue Fanning said: 'Law firms need to know NICD affects them as much as any other employer.

They are culturally behind because they are unused to discussing things with staff.' She said employees could apply to the Central Arbitration Committee if work councils are not set up or ignored.

Jeremy Fleming