DEBATE Carter: how will it affect your practice?

The tremors triggered by Lord Carter's review of legal aid were already rocking the high street well before he delivered his report last Thursday. The brief '“ to bring legal aid costs under control '“ was known to all, and most in legal circles agreed that public funding could not go on increasing indefinitely without greater accountability and efficiency. But what sort of reform would allow the system to continue to deliver the same or even better value at lower cost? Many fear that a market-based approach will spell the end of smaller firms serving the local community; that peer review will not provide an adequate measure of quality; that the only way of achieving efficiencies will be to cut corners; and that success will be assessed purely on the basis of structures and processes. Yes, costs will be reduced and allocated more efficiently, but the quality of legal advice, reduced to a pure commodity, will decline, and legal advice deserts will spread around the country. But is this really what is looming behind Lord Carter's reform? solicitors journal asked members of the profession for their reactions. They range from outright scepticism to the constructively critical'¦ and the entirely encouraging.

Richard Miller: worse problems

Lord Carter's brief required a cost-neutral system and some transfer of resources from crime to civil. We knew the report would be uncomfortable, but it could have been worse. However, in the context of a need to make savings, and research showing criminal defence as barely viable as a business for solicitors, 16 per cent extra for the Bar is outrageous.

The report overlooks that we provide a personal service that often must be delivered locally. The efficient economic structures the report describes probably cannot be set up outside the biggest cities.

We also have a concern about fixed pricing for criminal work: the criminal justice system is not and cannot be fixed. Therefore, what you must do for your fixed fee will not be fixed. Would your business be viable if because of Government inefficiencies, you had to do twice as much work in order to earn your fixed fee?

On the civil side, the proposals go with the grain of the LSC's work over the past year. There is a recognition of the limits of fixed fees. On CLACs and CLANs, the report implies that networks are seen as the key. There are also some interesting ideas on the future role of the LSC, which may have made uncomfortable reading in Grays Inn Road.

On the criminal side, we need to seek adequate mechanisms for escaping from the fixed fees, and for ensuring that others pay for the consequences of their inefficiency. Graduated fees for the Crown Court will need to be considered very carefully; but the idea of having the scheme ready for implementation by April 2007 appears unrealistic.

Most people agree that the current system has problems; but LAPG is yet to be convinced that the Carter proposals will solve the existing problems without creating worse new ones.

Richard Miller is director of the Legal Aid Practitioners Group

Andrew Keogh: making it work

Put simply, there is no other option but the one proposed by Lord Carter. Certainly if there is another viable system, no one has yet come forward to explain it. Carter recognises the inevitability of increased pressure on public finances and reverts to a model of increased volume to secure lower unit cost; the only question is whether the market can in fact deliver. From a large firm's perspective the answer to that is 'probably'. Everything depends on the critical move to stage 2 of the reforms after six months; any delay beyond that period is unsustainable. It is therefore critical that the Legal Services Commission does not get sidetracked by those predicting a collapse in supplier base or quality dropping through the floor, neither will happen due to robust protection mechanisms already in place such as peer review. Smaller firms do have a future post-Carter, large firms are already planning future models of delivery based on franchising and a roll-out of back office functions. For the ambitious small supplier, the future is in fact much better than some would have them believe.

There is still some work to be done and we eagerly await details of bid zones and final pricing. It is doubted that a phase 3 based on best value tendering will in fact be needed, as it is almost certain that the floor price for publicly funded work will already have been achieved through natural wastage of suppliers and the economies achieved through price cuts and early delivery of volume, and further downward pressure on price is inconceivable given the other factors at play. It will be critical to the success of Carter's proposals that a robust response is dished out to those criminal justice partners who obstruct efficient delivery by their own inefficient working practices. Everyone must calm down, read the report and get on with it.

Andrew Keogh is a partner at Tuckers and was voted Legal Aid lawyer of the year 2006

Raj Chada, solicitor

The Carter Review has proposed the most radical change in the provision of legal aid since the inception of the Legal Aid and Advice Act in 1949. For the first time, legal aid firms will not only compete for clients but

will compete to win contracts from the Legal Services Commission.

The competition will be based on 'best value' principles, including measuring a firm on quality, capacity and price. This is a welcome move away from the original disastrous proposals from the LSC, where the lowest price would always have won. That being said, it remains to be seen how much weight is actually attached to an indicator such as

quality (and whether peer review can be an effective measure of this).

There will be a managed transition in which fixed pricing becomes the norm instead of just at magistrates' courts.

Lord Carter is of the view that the traditional payment gives incentives for firms to conduct work even if not necessary or the most efficient way of doing this work.

Instead, he proposes to transfer this burden to firms so that from the government point of view, the firms have a clear financial incentive to be efficient and provide value for money to the tax payer. The problem with introducing such a profit-driven incentive is that it also gives an incentive for some firms to cut corners. Carter acknowledges this issue and we return to how the quality measures work being critical.

There is a clear presumption that greater volume of cases in concentrated areas will lead to the reduction of unproductive work such as travel and waiting. There will be challenges for all firms in how to respond to this and how to restructure to survive.

The current system is unsustainable in the long-term. Firms are at the edge of profitability, as rates have not increased in a decade, the LSC's cost is spiralling and the government has increased total spending on legal aid by

25 per cent '“ the Carter Report has started a debate, but the jury is still out whether it can deliver a sustainable legal aid system.

Raj Chada is a partner at Hodge Jones & Allen

Joel Bennathan, barrister

Most of the headlines about Lord Carter's latest report will be dominated by the professional bodies fulfilling their trade union roles; the Bar will be happy, solicitors not. It is another two issues that worry me more.

The first is Carter's emphasis on replacing payment for the hours worked with payment per case; in industry or commerce, where time-saving and efficiency can be pain free this may be a good idea. In a system that depends upon defence lawyers to spot holes and weaknesses in the prosecution's case and positive points for a defendant, it is not. When I am defending in a case, I read all the papers, think about them, and then stop. I do not undertake pointless tasks, as I have other things to be doing with my time. The danger of Carter's approach is that the only corner to cut is not preparing as much.

Second, how will the changes to solicitors' funding affect black and minority ethnic (BME) firms? The increased presence and confidence of BME solicitors, barristers and, at last, judges, has been one of the great advances of my time; no longer is it common for court staff to assume that black lawyers are the accused. In part, this progress is the work of many small, dynamic BME firms. Carter's first draft threatened to all but wipe out such firms through a 'big is beautiful' philosophy. The latest version is a vast improvement, by leaving room for any firm that earns more than £50,000 per year from criminal defence work, which means any serious outfit. Yet there are still opportunities waiting to be missed. How about demanding robust equal opportunities policies as a prerequisite for getting on the approved list? Carter goes some way to suggesting such an approach to the Legal Services Commission. More fundamentally, how about ensuring the system by which funding is awarded is not just about price, by creating a 'value plus' scheme that makes diversity one of the criteria? It is not too late to make Carter an engine of change for good.

Joel Bennathan is a barrister at Tooks Chambers and a member of the Carter Diversity Group

Diane Burleigh, ILEX

The central premise of the Carter Review is the need to get 'more for less': more efficient and more expert provision of legally aided help at a lower cost. This very detailed final report will need to be analysed carefully. At this stage, ILEX remains concerned that the central premise is unrealistic.

Carter proposes that fewer, larger firms will provide higher quality services than the current, more diverse range of practices. But quality is defined primarily in terms of structure and process. The focus on quality of advice introduced by peer review may not survive these changes, as prices are driven down.

ILEX agrees that Carter offers the prospect of firms being able to manage their businesses more effectively over a longer period, which will be essential to their survival. Larger firms will have the ability to use their financial and human resources more effectively. However, the barriers raised by the current contracting regimes against the effective use of ILEX

Fellows and other staff, such as accredited police station representatives, will have to be dismantled to make that possible. ILEX Fellows can now qualify as advocates in the magistrates' and youth courts, as well as in family and civil proceedings in the magistrates' and county courts. Firms must be able to recruit and use these qualified lawyers fully.

ILEX still has doubts about the suitability of corporate and commoditised services for legal aid work, dealing as it does with clients who are often disadvantaged and marginalised. The report seems to accept that legal aid 'deserts' will not be solved by the main proposals. ILEX believes this will inevitably mean that the proposals will not deliver common standards of assistance to clients, either geographically or socially. It is too early to judge the effects of fixed and graduated fees on the viability of firms. Given the range of costs in individual cases, ILEX is concerned that if they do not work in practice, legal aid firms running on the margins of viability will give up this type of work and the current downward spiral in provision will continue.

Diane Burleigh is chief executive of the Institute of Legal Executives