Barrister led ABS: too much to take on?

There is a mystique to the Bar of England and Wales, designed to present a timeless image of legal practitioners.  Working in rabbit warrens around the Temple, wearing robes and a horsehair wig, and dealing with only the highest levels of legal thought, it is a façade that conceals some very radical ambitions for change.

This month the Bar Standards Board released its Consultation Paper on the use of alternative business structures (ABS) in the Bar and their application to the Legal Services Board to become a regulator of such entities.

So what is an ABS?

Essentially, it’s about shared back office services for a legal business that plans to advance in multiple markets but needs to keep the different arms separate enough for regulatory reasons.  It is also the antithesis of what is sometimes called the “now you see it, now you don’t” nature of a traditional chambers, the unincorporated association that may act like a company but ultimately places responsibilities back on individual members.

As you may guess, the interest in ABS-type organisations is primarily about stealing away work from other markets.  In-house lawyers want to be able to instruct counsel directly, solicitors want to appear in court hearings, and accountants want to give legally privileged advice on tax to their clients.  Moreover, with the right setup a firm could provide all these same services under one roof while keeping administrative costs down.

This last issue – of keeping costs low – is why a barrister led ABS sounds like a contradiction in terms.  The Bar is already the ultimate lean legal business model, providing advice and advocacy on a piece-work commission basis.  Similarly, as barristers are often self-employed, they naturally work hard to keep their costs down and profits up so there isn’t a cost-saving advantage in an ABS.  You would only create one if you wanted to deal with a new source of revenue.  The interest in the barrister led ABS is purely to allow barristers to take the conduct of litigation out of the hands of solicitors.

Will it work?

Barristers are capable litigators trained in the arts of courtroom advocacy, but miss out on parts of the conduct of litigation because solicitors will be the usual first point of call. Decisions made about the conduct of the case, whether to settle, or what evidence to collect will have been taken before instructing outside counsel.

It is fashionable in this debate to talk down solicitors, but their hard work preparing documents, taking witness statements, collecting evidence and reducing the elements in a case down to an instruction to counsel is what allows the Bar to remain so lean.  To take over the “nose to tail” elements of receiving a case, processing it, and allocating work will ultimately mean that chambers have to hire teams of paralegals and maybe even solicitors to manage this process.  They will certainly need business development specialists and perhaps an enlarged clerking team.

But this opportunity then cuts both ways and there’s nothing to stop law firms employing barristers and producing a solicitor led ABS with many of the same elements and greater experience of generating work direct from the lay client.

All this rather suggests a new way to compete rather than the ending of the old way of doing things, and, as any smart lawyer will tell you, just because you can do something it doesn’t necessarily mean that you need to.