The harsh reality of 'criminal legal aid contracting

Legal aid has always been a topic that’s shrouded in public cynicism and negativity. It’s an area where practitioners seldom receive good news. Government cuts have plagued legal aid funding for years and the current duty solicitor contract cut has proved to be no different. ?The announcement is set to ?be the most significant blow of all. There are, however, options for those affected.

The reform was spearheaded by the previous Lord Chancellor, Chris Grayling, in an attempt ?to achieve yet further savings. Whereas previously thousands of firms offered services in criminal legal aid, contracts ?are now only being issued to a fraction of the original number.

This cut in contracting is set ?to severely affect hundreds of solicitors and their clients. ?Sadiq Khan MP has previously predicted that miscarriages of justice will arise from the cuts already made. In addition to this, and the restrictions of freedom of choice, further fee cuts are planned in the new year.

Firms unsuccessful in their applications for duty contracts will feel that the future of their practices and their careers are ?in question. Many rely on duty solicitor contracts to contribute to the cost of running their business, and the absence of this funding and opportunity to gain clients will cause them to start thinking about the viability of their practices and their options moving forward.

What exactly is the next ?step if your firm has an uncertain future? As far as we’re concerned there are a number of options available, and now ?is the time to explore them.

??Restructuring

?Now may be the time to consider working in a different way, with a view to reducing overheads and future liabilities. Firms will undoubtedly have to consider reducing staff levels ?in order to focus the available work on the optimum number of fee earners. 

Partners who have previously been managers, moving pieces around the chess board and monitoring performance, will need to become more hands ?on with their own client work in order to achieve client loyalty. The fact that jobs will be lost is sad but true.

??Traditional structure?

?The concept of small firms offering client services and providing their own administrative support in-house, under a roof that they are paying for, will have to go in many cases. 

Firms should consider outsourcing a lot of their support services (if not all) to enable them to focus on earning fees with reduced overheads. This is a model already being operated by many of us.

?Partnering with other firms?

Many national firms that are ?not currently involved in duty solicitor work are willing to enter into discussions about ?the possibility of working with affected firms. This is equally as applicable to individuals as to entire firms. 

Geography need not be a restriction and solicitors can remain self-employed. This ?sort of arrangement is already proving ideal for solicitors ?who wish to work flexibly or are approaching the end of their practising careers, many of whom do not want to work to targets or comply with rigid working hours. 

?Closure

?If you decide to close your firm, you need to understand the processes and issues involved. You will have to pay your professional indemnity cover (run-off cover) to your insurers, which can prove costly – probably up to three times the amount of your annual premium and due in a lump sum. 

There are also regulatory requirements upon closure ?of a firm, along with the usual administrative and legal processes involved. Your staff, suppliers, and leases all need ?to be taken into consideration. ?Be sure to consult a firm who deals with regulatory and disciplinary procedures as they’ll be able to outline the correct processes involved.

For many, the harsh inequality of criminal legal aid contracting is coming home to roost. It’s an extremely contentious area at present and the news of an unsuccessful application can be difficult to come to terms with. 

Even if you were successful, the problems are not over as ?the 8.75 per cent cut that is to be introduced in early 2016 ?may exceed the percentage of profit levels being achieved by some firms. 

At a time of despair it is important to bear in mind that other solicitors are on hand to help you. 

Richard Nelson is the senior partner at Richard Nelson @RNelsonLLP www.richardnelsonllp.co.uk