Tuesday, 27 November 2012

I Want it All

Ah Christmas. My daughter is grown up now (mostly) but I remember when she was much younger and the conversations we would have in the run up to Christmas about choice - which of the many presents she had mentioned did she actually want. Inevitably, at some point, she would say, "But I want then all!".

I was reminded of this when reading the words of Lord Justice Gross, as reported in Legal Futures (link here), I quote:
"I am anxious to ensure that a conflict between shareholder value or business interest on the one hand and professional ethics should always be resolved in favour of the latter – and the point is worth making because the pressures to the contrary can arise in subtle form through small, imperceptible steps..."
I appreciate his concerns. In another part of his speech, he says:
“Money is in short supply; that is a reality. There are many priorities and supplicants for public funds. That too is understood. However, reducing cost – in the sense of tightening the legal aid budget – must, over time, impact on the willingness of the best and brightest to practise at the publicly funded Bar. What will this do to the quality of our justice system over time, in areas such as crime and family?”
This seems to be axiomatically true. It does, however, also smack a little of wanting it all. The Bar - the Justice system - should be well funded, firms and sets should be careful in cutting costs and outside investors should not have influence over the firms they invest in.

That doesn't sound quite right to me. Why would an investor provide a large slice of capital to a firm but have no control over its direction? Why shouldn't firms cut costs sensibly? Perhaps most importantly - why should external investors in a law firm have any lower ethical standard than the lawyers who currently invest (in one way or another) in the firm? It is possible, surely, that an additional external oversight might actually work to keep some firms on the straight and narrow.

We can't have it all. In times of economic difficulty, criminal justice will be asked to cut costs. Law firms and chambers should work to ensure that their systems are as efficient as possible and so make the best use of the money available. Firms should look to external investment expertise - and accept the requirements placed on them by the investors in terms of reporting and control systems. Who knows, we might end up in an ethically, as well as financially, stronger position...


  1. I'm not sure I follow this at all.

    There is, of course, nothing unusual still less unethical about a set of chambers trying to run itself as efficiently as it can. However, it does not owe either the Court or the LSC any duty to do so. The LSC does not pay members of inefficient sets any more than it pays members of efficient ones. Similarly, the Court does not lower its ethical expectations of counsel according to how efficiently their sets deal with their costs. In contrast (and entirely acceptably), if the set were to acquire external investors, those investors would be entitled to expect that sets would run themselves efficiently.

    Gross makes discrete points in the two passages that you cite. In the first he recognises that the interests of external investors and the court may not always be aligned. You are right to say that often they will be. However, he is focused on the circumstances where they are not. If I were a barrister in a set with external investors and faced a straight choice between doing something thoroughly (but, therefore, more expensively)and meeting my duty to the court and doing something less well (but more cheaply) there should not be any question but that I should do the former. He is not suggesting that external investors should have no influence. He is suggesting that the one thing they cannot expect to be allowed to influence is compliance with ethical standards and that one has to be vigilant to ensure that apparently harmless requirements do not in practice have that effect. That is scarcely "having it all".

    His second point seems to me to have nothing to do with external investors. It maybe that efficiency conscious external investors so streamline the operation of a legal aid set that they manage to generate an investment return and still leave the barrister with as much (or hopefully more) than they would have had in their pocket had the efficiencies not been made. However, legal aid rates are so ridiculously low (and trending ever downward) that without a personal devotion to doing that kind of work, barristers who could earn more doing something else are likely to drift off and do it. An investor might very well say "give up legal aid work; do something more remunerative and everyone will be happy". That would be fine as long as "everyone" is understood not to include the parties who suddenly find they have no access to competent representation and the courts who have to deal with the consequences.

    1. Thanks for your comments.

      You are absolutely right to say that barristers in efficient sets are paid no more than those in less well managed chambers. I see members in both types of chambers every week. The point that I try to make is that, as well as appealing for more realistic payments, members of chambers should ensure that their own house is in order and that their contributions are working as efficiently as possible. The ethical expectation for any set or any firm should, of course, be the same, no matter their source of funding.

      My point with external investors is that there is no particular reason to suggest that such people would exercise influence to act in any unethical manner. In the example you use, I should absolutely expect that any lawyer would refuse to lower their ethical standards. Any investor in a set of chambers who had done the least amount of due diligence would realise that they were dealing with people who would stand by their beliefs. As an investor in banks and accounting firms, I expect the same from those working there.

      I absolutely agree with your point about investment in legal aid sets - and for that reason, sadly, would be very surprised to see external investment in a set which only did that sort of work (complete control, perhaps, but not investment in an independent set).