In recent years barristers have not benefited as much as solicitors from the growth in the legal services market. But this could change with the BarDirect scheme, which extends the number of organisations that can instruct a barrister directly without the intervention of a solicitor.
The evidence for barristers’ failure to benefit from the growth in the legal services market lies in the numbers of practising solicitors and barristers. While there are many more solicitors than barristers, the numbers of both grew at broadly the same rate throughout the 1990s. However, the BDO Stoy Hayward Survey of Barristers’ Chambers last year noted that in 1999 the number of practising solicitors grew by 5.9%, whereas the number of practising barristers grew by only 2.4%.
One possible reason for slower growth at the Bar is that solicitors’ firms, particularly large firms, are now able to offer in-house many of the traditional services of the Bar. Solicitors are at the heart of the legal supply chain, so they can determine whether or not work gets referred on.
BarDirect overcomes the problem of solicitors’ control of the value chain by offering organisations licensed by the Bar Council the opportunity to instruct barristers directly. More than 30 organisations have now been licensed.
The list of licensees indicates the scope of BarDirect. A wide range of organisations have been licensed, including banks, insurers, employment consultants, police forces, probation services and commercial firms. These organisations are likely to be instructing counsel across an equally diverse range of work types from criminal work, to professional negligence, to pure commercial work.
There is also work for counsel of a wide range of experience, from the senior barrister specialising in clinical negligence to the pupil pursuing a breach of probation terms.
The Bar Council quotes positive feedback from those that have used BarDirect so far. For example, one department of the North Yorkshire Police, which piloted BarDirect, asserted that “it has clearly achieved a reduction in our legal fees, [and] the advice given has always been prompt enabling swift decisions to be made as necessary”.
Even before the introduction of BarDirect, members of certain professional organisations (such as chartered accountants, chartered surveyors) could instruct barristers directly.
So could employed solicitors in organisations such as local authorities. But BarDirect has extended this.
It is early days yet: the BDO Stoy Hayward survey found that last year BarDirect and Direct Professional Access (DPA), which has now been subsumed within BarDirect, together accounted for just 2.3% of the Bar’s income, which we estimated to be between £1.3bn and £1.5bn. But what are the prospects of growth?
Growth in income from BarDirect will rely on two factors:
1. the Bar’s ability to identify suitable opportunities; and
2. individual barristers’ and chambers’ ability to exploit the opportunities.
1. Identifying opportunities
Legal work takes many forms. A solicitors’ firm is in many cases best equipped to manage
the work, using barristers on a referral basis as necessary.
However, in other situations the solicitor adds little value and a direct relationship between client and barrister can be more cost-effective. BarDirect can provide the vehicle for this relationship, provided barristers and chambers identify the opportunity. To do this, they need to put themselves in the lay clients’ shoes and consider what they can offer.
The 30-odd BarDirect licensees have already concluded that they can work directly with the Bar, as have many members of DPA-authorised professional bodies. But barristers and chambers should be looking beyond these lists. So, how can chambers identify the opportunities?
One way is to look at the different types of legal work and ask these questions.
l Is it recurring work?
A referral profession such as the Bar typically exists where the lay client only rarely requires a specialist. However, in some situations, a client will require a specialist on a regular basis – for example, an insurer might require legal advice regularly on head injuries. In this situation, the insurer is likely to know exactly where to go for advice and should be able to go directly to the barrister.
l Is the barrister the key component in the service offered?
More generally, any piece of legal work where the barrister is the key component offers an opportunity. Much legal work is a package of different elements – preparing a case, representation in court, etc. However, if the barrister’s time represents the vast majority of what a client is paying for, why use an intermediary?
l What value does the client gain from the solicitor firm infrastructure?
Our survey of chambers showed that barristers’ overheads take up about 30% of gross income. On the other hand, typically around 50% of what a fee earner in a firm of solicitors generates goes on overheads.
A solicitors’ higher overheads are used to support an infrastructure that in many cases offers value to clients. It might be worth paying a solicitor for services that a chambers might not be able to offer, such as document production services, staff strength in depth, etc. But this is not always the case.
l Are there spin-off benefits from the solicitor/barrister relationship?
A solicitor client can often offer an on-going stream of instructions. Chambers will therefore be reluctant to seek BarDirect instructions where this is clearly cutting out an existing solicitor client.
For example, a chambers that accepts instructions regularly from a firm of solicitors on insolvency matters is unlikely to go directly to that firm’s clients, who might typically be the insolvency practices of the large accounting firms. However, the chambers would be justified in seeking out a completely different group of potential clients, for example, accountants who are sole practitioners.
l Are there spin-off benefits to the client from instructing a solicitor?
A client might wish to instruct a solicitor even though he can go directly to a barrister. For example, a firm of accountants may place insolvency work with a firm of solicitors in the expectation of referrals back from that firm.
However, if the solicitor cannot offer reciprocal benefits the client might consider going directly to the barrister.
Answering these questions will help identify situations that offer opportunities.
Many of these situations will be ones where clients have instructed neither a solicitor nor a barrister previously, for the legal market is dynamic. For example, employment tribunal work has grown rapidly in recent years and has provided work for both solicitors and barristers. It is those individuals and organisations that identify the growth areas that will prosper – whether they are barristers
or solicitors.
This does not mean barristers are moving away from their traditional work of offering advice and advocacy – it is more a question of using those well-recognised skills in new areas.
