The recent warning from the British Retail Consortium that high streets could reach a ‘tipping point’, beyond which they will no longer be viable, highlights an important question. Macro-environmental factors like the global economy, technological innovation and the rise and fall of international power blocks have unpredictable effects on local economies, industries and professions. In uncertain and complex business environments, how can law firms develop robust business strategies? Small firms probably take Peters and Waterman’s famous advice to ‘stick to the knitting’ – that is, keep on doing what they do best. They also keep a close eye on visible competitors and may try to copy them when they successfully exploit new ideas. Of course, ‘sticking to the knitting’ and watching your competitors doesn’t work if you’re not clear, or simply wrong, about what you do best or who your competition is. From the 1870s to the 1990s, for example, Eastman Kodak’s production expertise was in chemicals. Sticking with photographic products in the face of a digital revolution meant it had to abandon much of its existing expertise and master electronics. It then had to survive competition from powerful competitors with strong capabilities in electronics – such as Sony. As the Law Society’s current Improving Residential Conveyancing consultation makes clear, residential conveyancing solicitors face a difficult environment and a need to make strategic choices. Technology is a significant factor in success or failure in this environment. It has the potential to change the business landscape for high street conveyancers as profoundly as the BRC fears the economic environment will impact on high streets. Survival will involve abandoning paper-based routines, acquiring expertise in the management of digital systems and facing formidable new competitors. It’s an obvious challenge but, as a recent In Business special report (see  Gazette, 23 July, 12) made clear, virtual law firms are already emerging and thriving despite recession. ‘The future is already here – it is just unevenly distributed,’ is a saying attributed to science fiction writer William Gibson. What that phrase means in practice was brought home to me in a discussion with Richard Barnett, chair of the Law Society’s Conveyancing and Land Law Committee and head of Barnetts Solicitors. Mr Barnett argues that the TransAction Plus vision outlined in Improving Residential Conveyancing is a way to help all conveyancing firms cope with a turbulent future. TransAction Plus will mean common conveyancing protocols, offering a much more open and transparent system for clients, and completion-ready packs, enabling estate agents to use a seller’s solicitor to deal with the home information pack and allowing the profession to offer a consumer-friendly alternative to the basic HIP. There would also be opportunities to build on TransAction Plus by developing a secure electronic portal. Mr Barnett’s strong advocacy is not based on the false assumption that all law firms need to develop the internal capabilities of a firm like his. Firms without specialist IT expertise may well benefit disproportionately from common protocols and a ‘shared’ IT infrastructure that they will not need to develop for themselves from scratch. Maybe this is just outsourcing the future? The Land Registry’s most ambitious plans for e-conveyancing have gone, but electronic registration is on its way. So are alternative business structures. The switchover from the paper-based past to the digital future may arrive sooner than some firms expect. The technologically savvy may already have the internal capabilities to respond quickly and flexibly. For others, TransAction Plus could make the difference between survival and death. The Improving Residential Conveyancing consultation closes on 18 September, and one factor that may shape many responses is the prevailing view on what it is that conveyancing solicitors really do best and who their competitors are. For any organisation, finding the ‘right’ answer to questions like those is fundamental to finding robust strategies that cope with technological change. Timothy Hill is technology policy adviser for the Law Society
A move to scrap the single renewal date for professional indemnity insurance (PII) in 2010 is ‘improbable,’ the Solicitors Regulation Authority said this week. The SRA also warned that any shift to staggered renewals ‘will not in itself significantly alter the overall dynamics of the market’. The news comes a week after the Law Society’s council voted to lobby the SRA to scrap the single renewal date in favour of staggered renewals. Research undertaken for Chancery Lane by consultant actuaries Lane Clark & Peacock concluded that staggered renewals would lead to lower premiums. However, research undertaken for the SRA by insurance broker Marsh recommended that the single renewal date be retained. The SRA said that, while it is not reviewing the entire PII regime, it will ‘look into’ the renewal date issue, and will launch a consultation on the assigned risks pool (ARP) in the next two weeks. A second successive fraught renewal season led to many solicitors, brokers and insurers calling for the single renewal date to be scrapped, while a record number of firms fell into the ARP. There were 308 firms in the ARP as the Gazette went to press. Andrew Long (pictured), chairman of the SRA’s financial protection committee, said of the renewal date issue: ‘When the SRA looked at the detail of this 18 months ago, the professional advice and practical considerations did not favour a change. ‘However, much has changed since then, including the renewal process becoming more complex, with insurers requiring more detail from firms and asking more follow-up questions. ‘We will look at this again in the light of recent experience, professional advice, forthcoming meetings with insurers and brokers, the views of the profession and the imminent consultation on the assigned risks pool. ‘The one note of caution is that a variable renewal date will not in itself significantly alter the overall dynamics of the market.’ An SRA spokesman added that any move away from the single renewal date before next October is ‘improbable because of the work involved’.
Two law firms have joined forces to launch a new support service for solicitors experiencing regulatory, conduct, practice or business problems. The Lawyers Defence Group (LDG) has been set up by national firm Richard Nelson and London firm Murdochs to provide all lawyers – solicitors, barristers, legal executives – and support staff with advice and online information on the issues they may encounter in legal practice. The two firms are backed up by a panel of other solicitors, barristers and consultants. By registering on the website, users can receive newsletters, regulatory bulletins and precedent documents dealing with policy and practice management. Duncan Finlyson, a solicitor at the Birmingham office of Richard Nelson and manager of the LDG, said: ‘We have seen an increase in the degree of regulation, an increase in the severity of penalties imposed and an increase in the uncertainty within the profession about what the rules are.’ He said there is a general lack of understanding among solicitors of the processes of the most frequent regulatory activities of the Solicitors Regulation Authority. ‘There’s a degree to which people feel the rules are being made behind closed doors,’ Finlyson said. ‘They are unaware of the impact of any rule changes and do not have the time to find out because they are busy trying to run a practice. ‘Our aim is to become the first port of call for all lawyers with practice-related, regulatory or employment problems.’
Akhil Shah QC, Alexander Milner (instructed by DLA Piper UK) for the appellants; James Leabeater (instructed by Berwin Leighton Paisner) for the respondent. Aviation – Conditions of engagement – Contract terms – Interpretation The appellant aircraft maintenance company (C) appealed against a decision that its standard conditions of trading were not incorporated into a work order form. The first respondent was the owner of the second respondent company that was the registered owner of an aircraft that had been leased to a third party company (E). The aircraft was maintained by C under a maintenance support contract and a continuing airworthiness management support contract with E. Under the contractual arrangements, C’s practice was for the scope of maintenance works to be carried out on the aircraft to be defined on a work order form. C’s work order forms contained the statement ‘terms and conditions available on request’. On a particular occasion, C negligently carried out works, pursuant to a work order form, on the aircraft with the result that it sustained damage on a subsequent flight. E assigned its right of claim against C to the first respondent. The respondents subsequently brought a claim for losses incurred by them and E as result of the damage suffered by the aircraft. The respondents applied for summary judgment in their claim on the basis that, among other things, C had no real prospect of showing that the work order form was a contractual document or that it incorporated C’s terms and conditions. A judge held that it was reasonably arguable that the work order was a document intended to have contractual effect. However, the judge held that the statement ‘terms and conditions available on request’ did not incorporate C’s standard conditions of trading because they conveyed no more than that there were terms and conditions available, and they did not purport to incorporate any particular terms and conditions into a contract. C contended that the judge erred by adopting too linguistic an approach and failed to look at the commercial context in which the work order form and the statement on it was made, and that if he had he ought to have found that it was at least arguable that it was intended that work carried out by C pursuant to a work order form was subject to its conditions of trading. Held: The judge had correctly directed himself towards the applicable principle as to the construction of commercial contracts, namely whether reasonable people would have understood the words used as referring to contractual terms upon which C had agreed to do the work, Investors Compensation Scheme Ltd v West Bromwich Building Society (No1)  1 WLR 896 HL followed. However, the judge had erred in finding that the words used could not be said to have incorporated C’s standard conditions of trading. The work order form was a contractual document that took its place in a contractual maintenance scheme, whereby the work order form activated the work, and nature of work, to be done on the aircraft. While the judge’s interpretation of the words used might have been correct grammatically, in a business context it would be odd if a contractual binding order such as the work order form contained no commercial terms but left them only for inclusion at a customer’s request. It was at least arguable that a reasonable person would have understood the words used as referring to contractual terms upon which C had agreed to work on the aircraft. Appeal allowed. Rooney & Anor v CSE Bournemouth Ltd (t/a CSE Citation Centre): CA (Civ Div) (Lady Justice Arden, Lord Justice Toulson, Mr Justice Hedley): 9 June 2010
The Legal Services Board has approved the level of the individual practising fee at £428 per solicitor for 2010/11. Solicitors, recognised European lawyers and recognised foreign lawyers (RFL) will pay the individual fee, while their firms will also pay a firm-based fee, which will be calculated based on its turnover. Reduced individual fees will be available for those on maternity leave. RFLs based mainly outside England and Wales will pay a lower fee of £100. According to the Solicitors Regulation Authority, the total funding requirement for 2010/11 is £121.7m, compared with £122.2m last year. An additional £2.1m will be collected to boost the compensation fund. The SRA says it is bringing in the new fee system because ‘the way the cost of regulation is currently allocated among the profession through the practising certificate fee leads to anomalies and unfairness in the context of modern legal practice’. Guidance and policy documents, as well as the table setting out firm fees, are available here.
Former human rights solicitor Sadiq Khan was today named shadow lord chancellor, as new Labour leader Ed Miliband assembled his first shadow cabinet. Khan, who was a partner at London human rights firm Christian Khan before standing as Labour candidate for Tooting in the 2005 general election, was previously shadow transport secretary. He served as a transport minister in Gordon Brown’s government. Khan has previously served as vice-chair of the Legal Action Group, and was chair of the National Council for Civil Liberties, now Liberty, for three years. Baroness Patricia Scotland was named as shadow attorney-general. Scotland became the first black attorney general when Gordon Brown appointed her to the post in 2007.
Perhaps a passion for the musical genres of trance, house and Ibiza is the secret of securing a training contract with a law firm. It certainly worked for Radio One presenter Judge Jules, who is also, as it happens, a London School of Economics law graduate. But what about non-celebrities, like the young man whose parents asked me last weekend whether doing the conversion course was a good idea? Was I right to tell them about the thousands of Legal Practice Course (LPC) graduates without a training contract? They asked the question, but should I have sugared the pill? Was I being a killjoy – or simply realistic? Happier news by far was that reported by The Sun on 10 April. The newspaper told us that Judge Jules, the DJ (that’s disc jockey, not district judge) born Julius O’Riordan, was close to finishing his law studies ‘begun more than 20 years ago’ and being allowed to practise as a solicitor. Law firms linked to the music industry were keen to take him on, the newspaper added. According to Wikipedia, Judge Jules is studying for his LPC at the College of Law, Bloomsbury. Reading this, I was reminded of some of the other celebrities who have studied law. The actor and comedian John Cleese graduated in law from Downing College, Cambridge in 1963, but never practised. The best-selling novelist John Grisham, on the other hand, practised for more than 10 years before beginning to write full-time. And Julio Iglesias was studying law in Madrid when, back in 1963, he was hurt in a road accident. Somebody gave him a guitar while he was convalescing and the rest is mega-star history… But to get our feet back on terra firma, let’s consider the plight of that young man who might still do the conversion course, followed by the LPC – and then maybe face the same reality check that thousands of other aspiring lawyers have faced before him. The reality check of thousands of pounds of student debts rewarded by setback after setback as law firms freeze recruitment, cut training budgets and make existing staff redundant. Things don’t seem about to get much better, either. Only this morning (13 April ) former member of the Bank of England’s monetary policy committee David Blanchflower said on BBC Four’s Today programme that there was unlikely to be a ‘double dip recession, but growth was going to be very slow’. It’s all very frustrating, depressing and disillusioning, but the Junior Lawyers Division is not admitting defeat. It is holding a free forum for LPC students at which there will one-to-one CV clinics, tips on effective interview techniques and advice from trainees and others on how to secure that elusive training contract. The forum, on Saturday 16 April 2011, takes place at Chancery Lane, London and lasts all day. Details can be found at the junior lawyer pages. What else is being done? The Gazette has reported on a number of initiatives and developments. More and more law graduates are taking Institute of Legal Executive (ILEX) examinations, with the numbers for 2010 up 40% on the previous year. Many are going for the ILEX fast track graduate diploma as a route for qualifying as a solicitor without needing to secure a training contract. Aptitude tests to assess candidates’ suitability for a career in the legal profession before they commit money to the LPC are also under consideration. And the Legal Services Board, Solicitors Regulation Authority and Bar Standards Board are engaged in a detailed review of legal training to address the mismatch between the number of LPC graduates and the number of available training contracts. There’s a lot going on, then, so maybe there’s no need to despair – yet. And so to my original question: was I right to answer truthfully when that young man’s proud parents asked me about career prospects in the law? Should I have said that things might be looking up, what with all the initiatives that the Gazette has reported? Or should I have ducked the question and referred them to the ever upbeat Judge Jules? ‘Hello – how are ya?’ he says on his website. And urges you to check out where his tour bus is ‘gunna’ be heading. See you in Ibiza!
A leading barrister has called for a halt to magistrates’ court closures, saying economies would be better made by returning the courts to magistrates’ control. In a pamphlet, The Cost to Justice, published by think tank Politeia, Stanley Brodie QC said the programme to cut 142 courts undermines the government’s Big Society agenda and commitment to localism. He told a meeting that the Ministry of Justice could save £1.5bn by reverting to the situation before 2005, when magistrates’ courts were placed under central government control. ‘The magistrates of England and Wales, and their courts system, until 2005, were an outstanding example of the Big Society in action,’ he said. Brodie described the ‘attack on the magistrates’ as ‘part of a more sinister trend in which government and Whitehall have been undermining the independence of the judges’. John Thornhill, chair of the Magistrates Association, told the meeting that the legal system could be made more efficient without shutting courts. The funding gap could be filled by enforcing payment of an estimated £1.3bn owed in fines.
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