On 8 January 2007, the new Chairman of the Bar told the Financial Times: “"Where we're missing out is ordinary working-class people, from all racial and social origins, who think the Bar is unattainable." It’s unclear who is working class nowadays. According to a survey carried out for the Royal Liverpool Friendly Society last year, “about 2.67m people consider themselves working-class even though they are among the top 20% of richest Britons, as do 500,000 who earn more than £100,000-a-year” (BBC News, 5 May 2006). But if such people consider the Bar unattainable, maybe it’s because they don’t fancy being part of a legal theme park.
But if the Bar wants to make itself more attractive to clients especially through Direct Access, it must radically change the way in which it operates. If it doesn’t, the companies and private equity firms who will be sniffing around once the Legal Services Bill becomes law, will force change upon us.

At present, chambers operate with a model derived from the eighteenth century. We wear wigs, have pupils and clerks. The computerised billings systems current in chambers are primitive, and solicitors complain about them with good reason.

But it’s the Bar’s archaic terms of work, its pricing practices, and its approach to fee collection which are beyond the pale. It beggars belief that any profession that operates as sole traders, should think it acceptable not to have contracts with private clients. True, there are alternative contractual terms on the Bar Council’s website – but who uses them? Only a few senior practitioners utilise bespoke contracts. The new draft Code for Solicitors, currently before the Master of the Rolls for approval, has dropped solicitors’ professional obligation to pay counsel. This will leave many sets high and dry, unless they start making proper contracts.

Much of the Bar fails to recognise that, like solicitors, it is in the business of selling legal expertise. Chambers that do not recognise this are becoming “price takers,” and will see income per tenant decline. A bizarre situation is developing in some sets, particularly when high volumes of repeat work are involved, whereby they are being excluded from the pricing “loop” altogether, resulting in the imposition of “take it or leave it” briefs.

A parallel to this would be having your doctor refer you to a specialist for a surgical procedure and telling the surgeon, as you are climbing on to the operating table, what you are prepared to pay him. This would result in the surgeon handing over to his newly qualified house surgeon, to allow him a bit of practice. Such practices always produce lowest-common-denominator results for the client, and ensure the least experienced, least qualified, lowest-priced person does the job. The lay client deserves better than this.
 
Successful chambers looking to attract and develop young barristers by offering personal development objectives and some idea of future income will have to be far more pro-active. At a minimum, chambers must ask themselves whether it is reasonable to meet with the instructing solicitor and his client to set terms in advance. From the lay client’s perspective, this is perfectly normal. Marginalizing the Bar is no basis for developing a strong relationship between lay client, solicitor and barrister. After all, they are all on the same side.

Many chambers have a slovenly approach to fee collection from private clients. This comes from not setting proper terms as to payment, when work comes in, and (incredibly) not stipulating a time for payment, or stage payments in ongoing cases, still less prompt payment of disbursements and interest. Some silks and juniors do much better and so do some sets but, I suspect, fewer than one might think.

This is absurd, not least because solicitors insist on such terms, when they take on clients; they cannot get paid without a retainer. There is no reason why barristers cannot mirror these arrangements. Yet there is a supine reliance on the Bar’s existing non-contractual terms of work. These treat the Bar as suppliants, who should be grateful for instructions, and assume that if our solicitor clients had to treat us as commercial equals, we would simply not be instructed by them.

The inevitable result is that clients can withhold fees for excessively long periods and get away with it. Most businesses would think 90 days was pushing it. Private hospitals, doctors and dentists collect payment from the client before they leave the premises. Yet barristers who have provided a professional service, often at very short notice, can be reduced to begging for “interim” payments, months after a case has concluded. Worse, they pay tax on aged debt, which has not been collected. No private equity firm taking over a legal practice would tolerate such financial anarchy.

I do not know if any set has a qualified accountant in charge of monitoring and ensuring fee collection, on a monthly basis. The time lag in collecting payment in some chambers reinforces the stereotype that barristers need private incomes to survive. The preliminary results of the Bar Council's Exit Survey show unacceptably high numbers of barristers leaving private practice between five and 10 years after being called to the Bar. Who can blame them?

One result of the Bar’s dismal inertia is that we do not benefit from the Late Payment of Commercial Debts (Interest) Act 1998, Directive 2000/ 35/ EC, and the 2002 Regulations. The statutory rate of interest for contracts between businesses concluded before 7 August 2002 is 8% plus the Bank of England base rate, and for contracts concluded after that date it is 8% plus the reference rate, plus compensation for the cost of chasing late payments. The Bar has looked this gift horse in the mouth.

More recently, the Bar has attempted to introduce new, and exclusively contractual terms with its dominant client group, solicitors. These are still being negotiated with the Law Society. Having seen a draft, they do not seem calculated to enhance the Bar’s standing in the fast-changing world of legal business. I cannot imagine any busy professional welcoming 16-odd pages of legalistic provisions, including four and half pages of recitals and definitions. It is not until page 9 that we learn that a barrister “shall be entitled to submit a fee note and..to be paid.” Solicitors get two months in which to challenge a fee note. Most businesses require you to query an invoice straightaway, or within 14 days.

There is a cumbersome procedure “for the agreement of fees which have not been agreed before the performance of the services have been completed.” After four months of serving notices and counter-notices on each other, and a further six weeks in which a barrister may choose to accept the solicitor’s counter-offer, the barrister and solicitor are supposed to present themselves to a Tribunal, which will act as an expert and not as an arbitrator. But this is not an encouraging template for modern professional relationships.

The new terms in form and content are very different from the Bar Council’s straightforward and user-friendly Client Care letters for Direct Access clients. By an interesting coincidence, the Bar’s latest Practice Management Guidelines (2006) also recommend the use of Client Care letters, although their model letter is pretty thin on detail. However, a properly drafted, accessible client engagement letter should be the model to adopt. Every solicitor who takes on a client is required to send them a client engagement letter, which spells out what the relationship entails.



To illustrate, consider this extract from a short-form engagement letter in use for solicitors in the UK and New Zealand. It has been kindly supplied by Ashley Balls of Legal Best Practice (www.legalbestpractice.com), a company with a reputation for improving client relationship management, which has just completed a comprehensive study on this in New Zealand. * It shows how a core element in the relationship can be simply stated, without making clients run for the hills.

“Charges and expenses.
Unless stated otherwise our charges are based upon a combination of factors: the time anticipated to complete the matter, urgency and ‘value’. Time recorded will include: Meetings with you and others, travelling, preparing and working on papers, correspondence and making/receiving telephone calls and other electronic communication.

Time recording charges. The firm charges <partner/staff member’s name> time at $___ per hour for each hour he/she (delete as required) is engaged on this matter.
Our rates are reviewed annually on <review date> and any change to charging rates will be notified to you, in writing, following that review.
In addition to time spent other factors may influence the time charge. These include: The speed with which action must be taken, the complexity of the issue(s), the value of the subject matter involved. On the basis of the information currently available we do/do not (delete as appropriate) expect these factors to influence our charges.

Disbursements policy. We will also charge you for any disbursements (court fees, registrations, duties/levies etc.) and travel expenses incurred on your behalf. These will be billed separately and in the case of court fees, registrations and other unavoidable costs must be paid for in advance. A separate estimate of disbursements will be issued.
[…]

Billing Arrangements.
To help you budget we will send an interim account at the end of every calendar month while any work is in progress. We will send a final bill on completion of the work. For your convenience a number of payments methods are available: Electronic funds transfer, cheque and credit card.

All accounts, whether interim or ‘final’ are due for payment immediately. Accounts remaining unpaid after a period of 30 days from the date of issue will attract interest at a rate of 1.75% above MLR (Minimum Lending Rate) from the date the bill is due. Interest will be charged on a daily basis.

If you have any query about any bill you should contact me immediately.”

The Solicitors Act governs relations between solicitor and client. It is but a short stretch to include the relationship between a solicitor and other professionals engaged as a consequence or a pre-existing solicitor/client connection. Counsel’s fees form an integral part of the solicitor client relationship, and should be paid for speedily. Many of Mr Balls’ clients now have a policy, whereby all disbursements (including counsel’s fees) must be paid in advance.

One wonders whether the Bar Council took advice from an outside consultant, experienced in client relationship management, before it put pen to paper. Chambers will need to get their skates on, however, if they want something more user-friendly. The point is: it’s not difficult!

Apart from greater clarity and improved cashflow, most solicitors will welcome chambers that emulate their own professional approach to client engagement. If chambers are concerned about how regular clients may react, they should invite them in for a meeting to present the new arrangements, and show them how that will benefit them in their relationships with their lay clients. I believe that the sooner chambers start relating to clients on this level, that is, as professional equals, the happier and more productive they are likely to be. They can be businesses with a future, instead of chambers with a past.

* The Business of Law: the essential report on management and financial performance in the New Zealand legal profession (Thomson, 2006)