A colleague of mine drew my attention to an article last week in the Law Society Gazette. He was frankly perturbed and shocked by what he had read and I was disgusted. It's about referral fees and you would have thought that an accident lawyer like my colleague would have been able to take it in his stride, but not a bit of it! You can read the article here:
Solicitors demand a kickback from barristers
It seems that the referral fee culture has extended the range of its corruption right into the solicitors' profession. Solicitors requiring barristers to hand over a proportion of their fees for work done, or else they don't get the job. It all sounds a bit supermarket, doesn't it? You know, we want to run a special offer on crisps, so the crisp supplier has to drop his price by 50%? Mind, at least the consumer gets cheap crisps that way, unlike the solicitor's client!
Why is it that solicitors refer work to barristers anyway? There are two main reasons - to gain the benefit of the barrister's specialism for their client and to save their client cost. If a solicitor starts selecting a barrister on the basis of how much the barrister will pay the solicitor to get the work, this is all going to go horribly wrong. Let me explain why.
1. Expertise. When I am managing a client's case, there are often times when I need an in depth view of the law on a specific issue. I pride myself on being a broad spectrum practitioner. Specialism has its own dangers. It has been defined as knowing more and more about less and less. Or as I sometimes see it, as expanding one's ignorance at least as quickly as one's knowledge.
As a broad based lawyer, I can often see interactions which a specialist might miss - the interaction of divorce finances and insolvency, for example. However, there are frequently times when my client needs someone who has total mastery in depth of an area of law - cue the barrister. So my selection criteria are simple. Who is it that has that specialist knowledge? Put it another way, who is it that knows a lot better than I do? Furthermore, having good counsel available throughout the country
means that I can act for clients regardless of location. The modern
world of email and teleconferencing means that I am available to clients
up and down the country and even abroad. Any court hearings can be
attended by independent counsel. So expertise, both of solicitor and counsel, now become far more available to clients who are no longer
restricted to using whichever firms are located near to them.
Now add to that a new selection criterion, who will give me a substantial kick back? Immediately I cut out of the equation a set of experts who would otherwise be well placed to assist my client - i.e. the ones who refuse. My client's available choice has been cut back sharply so that I can make money without working for it. What's more, the most highly regarded and in-demand barristers are the ones who are likely to have the least incentive to say yes. They have well established reputations and are not going to have to pay to secure work. This almost certainly means that refusing work to barristers who refuse to pay for it will mean the client gets the lesser experienced and able barristers and not the best available expertise. In short, the client loses out so the solicitor can cream off an additional profit.
2. Saving cost. I select the right level of barrister for a particular job. Not every case justifies using the most highly rated QC. In fact most of them don't. I'm looking for the right level of experience and expertise which can be bought at the right sort of price. Family finance cases are about money, pure straight and simple. Expend too much in legal fees and the whole exercise becomes self defeating. On the other hand, you can spoil a ship for a ha'porth of tar, so spending wisely on good representation can more than pay for itself. Using the right barrister can often be more economic than dealing with a hearing myself, even setting aside the issue of expertise. Frequently they can charge a lower fee than my time would demand.
Now add into the mix the idea that I'm going to demand of the barrister that s/he pay me 20% of his/her fee. What will happen to fees? Will the barrister meekly settle for a 20% income cut? Of course not - prices are bound to shoot up to compensate. And who will be paying those increased fees? Some remote insurance company, as in accident claims? No, it's going to be my client. So by demanding a cut of counsel's fees, I would have significantly increased the cost of the case to my client - the person whose interests I am supposed to be protecting. And what added value has my client received from me? Well, zip all, naturally.
Let me make myself clear - I already consider that my profession has gone to the dogs. Practices have grown up already which I find obnoxious. Solicitors are shamelessly trying to overcharge in contentious matters, from what I can see. If this practice becomes widespread, then it will simply show how utterly careless of their clients' interests solicitors have become. No, there is no way I will ever be persuaded to join in. My clients can have the benefit of counsel at a proper price. I shall do my work and charge for it - I shall leave counsel to charge at a proper rate for theirs.
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