"Commercial barristers are struggling," said an article ('The Bar Barometer') in the pages of Legal Week in December 2006, offering analysis of the future prospects for leading chambers and supported by tales of woe from several leading commercial sets.

The reasons for these problems are not hard to find. Litigation is an expensive and time-consuming business; the Woolf reforms were designed both to reduce the number of cases going to court and the cost of such litigation. Large cases such as BCCI or Equitable Life are increasingly difficult to mount and may now be resolved at a much earlier stage – whether or not alternative means of dispute resolution are employed.

The new rules have introduced a climate of compromise, with one commentator even suggesting that far from being the lifeboat that would tide such chambers over the rocks of a shrinking market, the reforms may actually be the rock that sinks litigation.

The commercial Bar is particularly affected by the growing trend within leading firms of solicitors to build their in-house advocacy capabilities and make less use of the Bar.

Herbert Smith head of litigation Sonia Leydecker sees an uncertain future for the junior commercial Bar. She comments: "We do not tend to use the junior commercial Bar very much now, [as] we do things in-house."

Such a move away from the Bar will have the greatest impact on the top sets, the so-called 'gold circle', which have traditionally relied on these solicitors for a significant proportion of their work.

The chill wind at the top end of the commercial Bar reflects not only a reduction in the number of very large cases but also in cases at the Court of Appeal or High Court. Certainly, very large cases are fewer in number, but cases of such magnitude were never, in any event, thick on the ground. Fewer major cases, a smaller proportion of what is available, and a change in the approach to resolving commercial conflict paints a gloomy picture indeed. These trends appear to have the greatest impact on, and be most damaging to, the gold circle sets, which may be why senior clerks are complaining.

So how should the commercial Bar respond as the market changes? Mrs Worthington was warned off the stage as the career of choice for her daughter; should she now not send her to the Bar either? Should commercial sets reduce the number of barristers? Indeed, should barristers in practice hang up their wigs and gowns and slink off to the major law firms or move in-house to top corporations?

A brighter future

It may be that the picture is, in fact, not so bleak after all. It is far from clear that the demand for the specialist services that a barrister provides is actually diminishing – or that there are fewer contentious matters. The third annual Fulbright Litigation Trends survey, published in October 2006, reported that 80% of UK businesses faced court action over the previous 12 months – up from two-thirds (66%) in 2005.

The percentage of UK respondents who faced more than 50 court actions in the past year also tripled, from just 5% in 2005 to 15% the following year. These are hardly figures that support the imminent death of corporate litigation or the commercial Bar itself.

All markets change over time, and the Bar is no different from any other market – particularly in a legislative climate focused on the removal of professional barriers and the provision of increased 'access to justice'. The Bar is subject not only to a significant change in demand but also to changes in the way that users are permitted to access its services. It needs to find different ways to meet that demand and to manage the experience of intense competition, from both its peers and even its own suppliers, as access restrictions are removed.

It is entirely possible for organisations to survive and prosper in what appear to some to be unstable market conditions; however, it does require a clearly defined strategy, a willingness to look at what the organisation is good at and a search for innovative ways to gain and retain business.

Looking at what other professional organisations do, we can see successful strategies at work. Commercial success among firms of solicitors – including those outside the magic circle and the very top City firms – has seen some of the less traditional firms make striking progress.

One example of this is the regional firm DMH Stallard, where a period of reorganisation and a number of successful mergers have, in the words of Tim Ashdown, the head of the firm's dispute resolution team, allowed DMH to "stand toe-to-toe with the established London-based litigation practices on the largest of projects".

Ashdown's firm has focused on its particular strengths, deploying significant litigation skill and resources, which are "based in readily accessible key regional centres from which clients will benefit from the lower costs-base", with the resulting pay-off being rapid expansion and significantly increased profits.

New opportunities for the Bar continue to present themselves, but these may be more easily grasped by less traditional sets – quite possibly those in the 'second tier' whose client base is more diversified and less subject to the problems experienced by top-tier commercial chambers.

Many of these sets have similarly demonstrated an enviable growth record in recent years and have maintained, and indeed increased, their market share, if reported figures are to be believed. Litigation and commercial work as a whole will be won and retained by those chambers that add value to their clients' litigation team.

Ashdown observes: "As we constantly drive to deliver greater value and certainty to our litigation clients, and as our purchasing power with counsel grows, we have streamlined our use of the Bar and now align ourselves with those chambers [that] are prepared to move beyond their traditional service models and help us deliver that greater value and certainty.

"Barristers and their clerks can no longer practise law in a vacuum and without reference to the strategic and commercial objectives of the ultimate client and the law firm instructing them."

It may be that sets outside of the gold circle have become aware of this imperative and are well placed to meet such demanding service levels.

In addition to winning market share, diversification may present new opportunities both in terms of client base and areas of law. There are undoubtedly areas of enormous demand for specialist advice and dispute resolution – such as intellectual property, IT, education and healthcare. Far from shrinking, these markets are enjoying buoyant demand, reflecting the needs of the market and the wider economy. Recognising these trends and developing strategies to take advantage of them has contributed to the growth of several supposedly second-tier sets.

Changing regulatory structures can also create market opportunities and the Bar can benefit from the relaxation of the rules covering who can instruct barristers. Direct access is a large and still relatively untapped market; indeed, a recent study by Hardwicke Building has shown that, within large organisations, both commercial directors and in-house counsel see real value in working directly with the Bar.

This market is ripe for further growth and offers a new stream of work for the talent and skills of the Bar. In-depth specialisation, allied to value for money, presents a compelling proposition. Which sets will manage to establish a foothold in this area? Again, it may be that the more traditionally structured sets lose out to the fast-growing band of up-and-coming competitors.

The Bar comprises a collection of talented and knowledgeable individuals. In such a rapidly changing environment, it would be surprising indeed if they do not find different ways of deploying those talents. Those chambers that have a winning strategy will not be the complacent, the old-fashioned, the under-resourced, and almost certainly not the very small. Sets of chambers that possess the business acumen to prosper in the current market may be well outside today's commercial elite.

If these sets are really feeling threatened, the future of the commercial Bar may lie with those ambitious enough to adapt to changing circumstances. In this case silver will indeed be the new gold.

Ann Buxton is chief executive at Hardwicke Building.