£400m government legal panel opens to bids

The government has put slots on its restructured legal panel out to tender, adding an extra £80m to the value of its contract to provide general legal services.

Up to 50 law firms will be vying for a panel spot for the £400m contract, which had an estimated value of £320m when details were initially published. 

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Whitehall’s procurement arm, the Crown Commercial Service, has since removed insurance from the areas of law to be covered by the contract and added non-complex finance. It is also now welcoming consortium bids and other joint-working supply-chain model bids.

The invitation to tender document states that the panel agreement will have a reduced number of suppliers which can each expect to receive a high value of panel customer work.

Firms are expected to help ‘meet the spending challenges by offering efficiencies and competitive pricing, planning work and resources carefully and efficiently at all times without compromising on excellent quality’.

Applicants will be required to provide pricing by reference to hourly, daily and monthly rates. Discounts and free advice or training based on expenditure or income across all panel customers must be provided.

Later in the tender process, applicants will be asked to provide ‘creative and innovative’ pricing options and ‘effective’ alternative fee arrangements.

The panel will be divided into two tiers – 12 ‘tier one’ suppliers and six ‘tier two’ suppliers. Work will be awarded to tier-one suppliers in the first instance.

Should a tier-one provider be removed, the highest-ranking tier-two supplier will be invited to move up. If this happens, the tier-two firm will not be replaced.

Of those eligible to tender, a maximum of 50 top-scoring firms will be invited to participate in the next stage of the procurement process, which looks at suitability.

Up to 24 firms will make it to the third stage of the tender process, which will be assessed by a panel of senior civil servants.

Panel slots will be awarded to successful applicants on 21 February next year. The new panel agreements will come into force a week later.

The Crown Commercial Service’s invitation to tender also includes an ‘armed forces covenant’ – a public sector pledge from government, businesses, charities and organisations ‘to demonstrate their support for the armed forces community’, brought in under the Armed Forces Act 2011.

The covenant’s two principles are:

• The armed forces community should not face disadvantages when compared to other citizens in the provision of public and commercial services; and
• Special consideration is appropriate in come cases, especially for those who have given most, such as the injured or bereaved.

The tender document states that the covenant does not form part of the tender evaluation. ‘However, [Crown Commercial Service] very much hopes you will want to provide your support’, it adds.

Current panel lists are due to expire on 31 January next year. The invitation document states that these will be replaced with panels for general legal services, finance and highly complex transactions legal advice, and rail-related legal services.

The three new panels will be complemented by a procurement of a panel for lower-value legal services. This will be open to panel customers and the wider public sector, accommodating low-value and low-volume transactions.

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£400m government legal panel opens to bids

IBA 2016: call for action over 'long arm' of US law

An international body should to be set up to resolve jurisdictional questions raised by the US’s growing habit of prosecuting people in other countries for breaches of American law, the International Bar Association conference heard.

Speakers at a discussion on the US’s ‘long arm of justice' raised concerns about the US's attitude to extra-territorial jurisdiction, noting that a listing on a US stock exchange is sufficient to make a foreign-owned company liable for prosecution in the US for crimes outside its territory. 

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Another concern is that the US’s double jeopardy rule does not recognise convictions overseas, raising the possibility of prosecutions of individuals who have already served sentences deemed too light by the US authorities.

‘This is significantly different from how the UK would look at jurisdiction,’ Amanda Pinto QC of Andrew Mitchell Chambers said. 'This is a very real problem for the rule of law. Certainty is being undermined by what is happening.'

A high-profile example of the US's attitude to jurisdiction was the prosecution of FIFA executives arrested in May last year. James Klutz, a member of FIFA’s governance board, said there had been ‘a sigh of relief that somebody was doing something’. 



Mary Butler, a federal prosecutor in the Department of Justice’s (pictured) asset forfeiture and money laundering section, said that civil confiscation was the main route taken to recover looted assets. However she said that US wire transfers can bring offences under US jurisdiction. ‘The concern is that the US should not be a safe haven, that our financial system should not be used to facilitate or promote crimes around the world.’

However Charles Duross, a former US prosecutor now with Washington DC firm Morrison & Foerster, said there are limits to the US's powers to prosecute foreigners for alleged offences committed overseas. He cited the ongoing case of US v Hoskins, where a US district court ruled that a non-resident foreign national cannot be charged with conspiracy to violate the Foreign Corrupt Practices Act unless they acted as an agent of a ‘physical concern’. However Duross noted that the Department of Justice has taken an appeal to a higher court.

Duross said that the increasing use of extra-territorial prosecutions raised the need for an international agreement, for example through a neutral panel - though he admitted that he did not see the US subjecting itself to such a panel ‘any time soon’.

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IBA 2016: call for action over 'long arm' of US law

IBA 2016: Stock market listing comes at a price

Of the first five law firms to float on the Australian stock exchange, only two appear to be in sound health, the International Bar Association’s annual conference in Washington DC heard.

Stuart Clark (pictured), of Sydney firm Clayton Utz and president-elect of the Law Council of Australia, told a session on new business models that one of the five is in liquidation and two of the others are in financial difficulties. The two that have succeeded are ‘boutique IP firms, with more stable cash flow and nothing like the cost base’ of personal injury giant Slater and Gordon, Clark said.

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Clark added that he is ‘not a fan of taking the profession of law and making it a publicly listed business’, saying he could not see how a director’s duty to shareholders squared with a lawyer’s ethical duty to the court. While the assumption is that the duty to the court comes first, ‘that has yet to be tested’. However he said that opportunity that might arise in two class actions against Slater and Gordon by shareholders over the crash in the company’s share price following the acquisition of Quindell in the UK.

Shelley Dunstone, of Adelaide firm Legal Circles, noted that a sixth law firm has now listed in Australia: another IP practice, QANTM Intellectual Property. 

With the exception of the District of Columbia, non-lawyer ownership of law firms is still banned in the US, though Washington State has introduced a category of ‘limited licensed legal technicians’ allowed to set up business aimed at clients who would otherwise not be able to afford a lawyer. Session chair Steven Richman of New Jersey firm Clark Hill, said that the 'guild mentality' of US lawyers made it unlikely that the situation would change. But 'to continue to put our heads in the sand as many bar associations have done in the US is not a long term solution'. 

Asked whether alternative business structures in England and Wales had helped improve access to legal services, Law Society chief executive Catherine Dixon said that it is too early to judge the overall impact. She noted that Law Society research showed most ABSs to be operating as conventional firms, while enjoying the ability to raise different kinds of finance and bring non-lawyers into the management. As for the widely predicted phenomenon of 'Tesco law', 'in reality that hasn't happened' - though she predicted that as the public gets more used to online services 'that dynamic might change'.

Although the session seemed to show little international enthusiasm for emulating England and Wales and Australia in ABSs, a speaker from the floor said that legal businesses owned by non lawyers were the norm in his jurisdiction. 'We have ABS's everywhere', said Moscow attorney Mikhail Aleksandrov, saying that with the exception of criminal law no qualification is needed to provide legal services in Russia. 'Anyone can set up a company and practise.' A Russian colleague observed that his country is famous for great social experiments - 'But the lesson is usually what not to do.'

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IBA 2016: Stock market listing comes at a price

Co-op Legal's recovery picks up

Co-operative Legal Services has posted a first-half profit, the group revealed today in its interim results, continuing its steady recovery over the last two years.

The legal arm posted a profit of £600,000 for the six months to 2 July, compared with a £200,000 loss in the same period in 2015. Underlying operating profit was £1m, the firm said.

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The company, one of the first three alternative business structures, had already showed tentative signs of recovery by posting a profit for the 2015/16 after heavy losses the year before.

Revenue from legal services rose 10% to £11m in the first half of 2016 – although this is still lower than during the same period in 2014, when the company was reported to be struggling.

This year’s figures include income from Sheffield-based Collective Legal Solutions, which was acquired at the end of last year and brought on board more than 100 associates and support staff.

This acquisition increased the company’s involvement in estate planning, wills, lasting powers of attorney, trust and probate: estate planning sales now form 18% of the business, compared to 3% last year.

CLS said its probate and estate administration business has grown 6% compared to last year, with profit ‘in line with expectations’.

It is building an ‘advanced solution’ for the probate and estate administration business to simplify taking customer instructions and to speed up cases.

The interim report added: ‘During the second half of 2016 we’ll continue to focus on growing estate planning, probate and estate administration while providing our members with access to legal services support.

‘We will continue to invest in improving our customer services and improving our customer satisfaction as we continue to use technology to improve processes and services.’

Overall, the Co-op Group reported what it called a ‘planned’ reduction in profit driven by a investment in rebuilding the business.

Profit before tax was £17m in the first six months of 2016, compared with £36m in the same period last year.

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Co-op Legal's recovery picks up

Firm defers pay review until Brexit picture is clearer

A top-40 firm has confirmed it will put off any pay review until the uncertainty following the Brexit vote has cleared.

National firm Bond Dickinson today confirmed it had informed staff of the decision.

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Managing partner Jonathan Blair told the Gazette the firm had opted to wait before committing to any pay review and adopt a similar approach to that taken by other firms.

‘We have been reviewing activity levels post-Brexit and while it is too early to tell what the longer-term impact will be, we have concluded that we should defer our salary review process until later in the year when we have a clearer picture of market trends and client activity,’ said Blair.

In July, Blair had said clients had already sought advice and guidance from the firm within weeks of the referendum vote to leave the European Union.

He explained Brexit was a ‘critical part’ of the business planning, and its alliance with firms in the US and in Germany is already considering how best to respond to the challenges of leaving the EU.

Bond Dickinson is the latest in a number of UK law firms to announce a halt on pay rise discussions since June 23.

It was reported in July that City firm Berwin Leighton Paisner had become the first to freeze pay for UK staff.

Corporate firm Addleshaw Goddard confirmed last month it had deferred a pay review and equity partner drawings in the wake of the vote.

The firm said: ‘Like many other businesses in the UK we have seen Brexit have an impact on activity levels in the short period since the referendum.

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Firm defers pay review until Brexit picture is clearer

Criminal bar chief targets 'corruption’ of defence work

The leader of the criminal bar has urged the government to get on with advocacy reforms to fix a sector troubled by corruption and poor business models.

Delivering his weekly message, Criminal Bar Association chair Francis FitzGibbon QC (pictured) said the Ministry of Justice had yet to respond to responses it received to a consultation paper issued nearly a year ago on enhancing the quality of criminal advocacy.

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Proposals include the introduction of a defence panel scheme and a statutory ban on referral fees to strengthen the current regulatory ban.

‘The criminal bar has shown great patience while waiting for action on these urgently needed reforms,’ FitzGibbon said.

‘A policy that has been developed with thought and full planning is preferable to one made in haste, but our patience is not unlimited and the urgency has not diminished.’

Highlighting that bad practices continue, FitzGibbon said criminal defence work is still hindered - at the margins - by corrupt practice and, more centrally, by unhappy business models ‘shaped by the skewed system of payments that do not serve the public well enough’.

Having received several reports of ‘incompetent’ solicitor-advocates, or barristers employed by solicitors, FitzGibbon said they were ‘thrust into court work’ for which they are not prepared and do badly, either as juniors or on their own.

Required to train the next wave of recruits, bad habits are then passed on.

‘Bad firms claim an advocacy fee and a litigator fee, with precious little to show for either; people still buy and sell cases - ie clients - without regard to what’s in their interests,’ he added.

‘The referral fee, disguised or in its own dress, is still alive and well. I get too many reports to dismiss the problems as isolated occurrences, although thankfully it’s still a minority, if a pernicious one.’

The 'overly corrupt' are a tiny minority, FitzGibbon said, acknowledging that 'there are no doubt some barristers among them'.

The bigger problem, he said, 'is the business model that turns advocacy plus litigator fee into the only way the legal aid firm thinks it can make a profit. That business model does not necessarily make for bad practice, but it’s the breeding ground on which it grows'.

FitzGibbon warned that until the reforms became reality, ‘this is a drum that I will continue to bang, without apology’.  

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Criminal bar chief targets 'corruption’ of defence work

CBA chief says defence work ‘beset with corrupt practices’

The leader of the criminal bar has urged the government to get on with advocacy reforms to fix a sector troubled by corruption and poor business models.

Delivering his weekly message, Criminal Bar Association chair Francis FitzGibbon QC (pictured) said the Ministry of Justice had yet to respond to responses it received to a consultation paper issued nearly a year ago on enhancing the quality of criminal advocacy.

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Proposals include the introduction of a defence panel scheme and a statutory ban on referral fees to strengthen the current regulatory ban.

‘The criminal bar has shown great patience while waiting for action on these urgently needed reforms,’ FitzGibbon said.

‘A policy that has been developed with thought and full planning is preferable to one made in haste, but our patience is not unlimited and the urgency has not diminished.’

Highlighting that bad practices continue, FitzGibbon said criminal defence work is still hindered - at the margins - by corrupt practice and, more centrally, by unhappy business models ‘shaped by the skewed system of payments that do not serve the public well enough’.

Having received several reports of ‘incompetent’ solicitor-advocates, or barristers employed by solicitors, FitzGibbon said they were ‘thrust into court work’ for which they are not prepared and do badly, either as juniors or on their own.

Required to train the next wave of recruits, bad habits are then passed on.

‘Bad firms claim an advocacy fee and a litigator fee, with precious little to show for either; people still buy and sell cases - ie clients - without regard to what’s in their interests,’ he added.

‘The referral fee, disguised or in its own dress, is still alive and well. I get too many reports to dismiss the problems as isolated occurrences, although thankfully it’s still a minority, if a pernicious one.’

Although the ‘overly corrupt’ are a tiny minority, ‘the bigger problem is the business model that turns advocacy plus litigator fee into the only way the legal aid firm thinks it can make a profit’, FitzGibbon said. ‘That business model does not necessarily make for bad practice, but it’s the breeding ground on which it grows.’

FitzGibbon warned that until the reforms became reality, ‘this is a drum that I will continue to bang, without apology’.  

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CBA chief says defence work ‘beset with corrupt practices’