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Legal aid cull could cause "serious disruption"

30 March 2010

The Law Society has warned that government plans to reduce the number of criminal legal aid firms from 2,500 to around 400 could result in “serious disruption” to services.

“There are many factors currently driving the market towards a smaller number of larger firms, including the advent of alternative business structures, the activities of insurance companies and other bulk purchasers of legal services, and the general economic environment,” Robert Heslett, president of the Law Society, said.

“In the criminal defence market, it must be recognised that legal services must be delivered wherever the client is, for example, in the police station or at court. This means that the scope for consolidation may not be as great as it is for other bulk purchasers. The situation will be very different in urban areas from in market towns and rural areas.”

Heslett said it was unclear how quickly any move to the model proposed by the MoJ could be implemented without “serious disruption to service provision”.

Rodney Warren, director of the Criminal Law Solicitors Association (CLSA) said that although there may be a large number of legal aid firms in some places, nobody was suggesting that there were too many individuals involved.

“One size does not fit all,” he said. “It may be possible to have volume in some of the big conurbations, but it is much harder in the rural areas.

“I see this as an opportunity for change, once we get over our concern that lots of people will lose their jobs.”

Warren said small firms would be able to form consortia rather than merge. He said he was not convinced by claims that the big firms had “stitched things up”.

“The big firms said what needed to be said on behalf of everyone. Change is always uncomfortable.”

Warren added that the CLSA had asked the MoJ for a meeting to discuss how varied the requirements were for delivering the service.

Speaking to Solicitors Journal, Lord Bach acknowledged that a “large number” of small and medium-sized firms would be affected.

“We recognise that this announcement won’t please everyone, but to make no change is just not an option,” he said. “Change is necessary to maximise value for money from legal aid and to enable firms to thrive and make a reasonable return.”

Lord Bach said the changes would make suppliers more efficient and get a better return for the taxpayer.

“Restructuring is already taking place. Some smaller firms will want to merge and gain from the experience of other firms.”

Lord Bach said that previous cuts in criminal legal aid, such as reduced rates for duty solicitors, were “small beer” compared to today’s announcement.

He said that a consultation on the new tendering system was planned for the summer.

Richard Collins, practice director of Tuckers, welcomed the announcement.

“If the government wants to deliver the service for less money, the only way is to give firms greater volumes of work and more freedom from bureaucracy,” he said. “They must focus on allowing firms to reduce their costs.”

Collins said the earliest the new system could be introduced was July 2011, if the new contracts starting in July 2010 were reduced to only one year.

“This could be the way forward regardless of the outcome of the election,” he added. “It’s very unlikely that any new justice secretary will have a larger budget for legal aid.”

The MoJ has also published its latest league tables of legal aid earnings. Tuckers topped the table for criminal firms, earning £9,397,000 in 2008-09. The Johnson Partnership came second with £6.37m and EBR Attridge Law third with £5.4m.

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