Platform for change: Creating a partnership led by barristers

1 Aug 2012News

Daniel Jones and Tom Street discuss why they created the barrister-led LDP Artesian Law and plan to convert it into an ABS

Key takeaway points:

Plan ahead. We found both the Solicitors Regulation Authority and Bar Standards Board to be helpful, but it takes time to negotiate the former’s processes. The earlier you can engage with the SRA, the better it is for both sides.
Draw up a partnership agreement. This may seem obvious, but many law firms still don’t have one and it is a new experience for barristers in particular. Taking the opportunity to talk through in advance how the partnership agreement will work is vital.
Allocate responsibilities. The way we operate means that everyone has to muck in. We have found it best to give each partner lead responsibility for a particular part of the practice.
Talk to your clients. When things have been done in a certain way for so long, a new way of doing them can cause raised eyebrows and some questions. But, with the legal media full of stories about alternative business structures and the like, the market is far more receptive to innovation than it once was.

As six members of a traditional London criminal set – of between 13 and 34 years of call – it became increasingly clear to us that the chambers structure is outdated, uncompromising and unable to cope with the challenges that face us all in practice as members of the self-employed Bar.

None of us wanted change – we are all proud to be members of the Bar and are proud of its traditions. But, looking at the realities of criminal practice, we turned our minds to creating a legal structure that could allow us to compete in this market on a more level playing field.

We can’t exactly claim to have been the first to realise that life at the criminal Bar had to evolve. In his 2010 blueprint for the profession – The Future of the Bar – then Bar Council chairman Nicholas Green QC said the criminal Bar needed to work with solicitors and transform itself into “fully functioning litigation units” if it wanted to survive, in part so that barristers could contract directly with the Legal Services Commission.

As well as frustration with the chambers model, there were other drivers for us. There was the threat of ‘one case, one fee’ and the cheaper alternatives available to solicitors.

We were also particularly galled by the limitations placed on us handling public access work. We had all already gone to the expense of doing the training, only to be told by the Bar Standards Board (BSB) that we could not accept instructions when the client may be eligible for legal aid. Solicitors can get away with simply sending out a letter to tell clients that they may be eligible, but we can’t. The BSB has finally begun work on changing that rule, but we didn’t want to wait.

As a result, Artesian Law, a legal disciplinary practice regulated by the Solicitors Regulation Authority (SRA), was born – with at its heart the desire to offer excellence in our core skills of advice and advocacy, but with more efficiency than is the norm, and with the capability to adapt to the ever-changing world of legal services.

Options for the future of the Bar

1. Stay as you are

This will be the preferred model for most barristers. Even though some chambers are becoming far smarter in the way they are run – with chief executives, business development managers and so on – they are still hamstrung by the very nature of chambers and the way decisions are made.

Many barristers think themselves in some way insulated from the changes the Legal Services Act will introduce to other parts of the market. Even if this is true – and in some cases and some areas of practice it may be to some extent – they will still be affected by how those changes impact upon the solicitors who instruct them and need to bear that in mind.

2. Create a ProcureCo

ProcureCo was the Bar Council’s big idea a couple of years ago, a corporate vehicle that can be bolted onto chambers so that barristers can collectively bid for work, instruct solicitors and also bring clerks and others into ownership roles.

ProcureCo has reportedly enabled chambers to: bid for and enter into block contracts with large purchasers, such as local authorities; use a more uniform marketing approach to procure work directly from the public or companies; develop arbitration and mediation centres; and expand international work.

However, in reality, there is little evidence of ProcureCo taking much hold at the Bar. It was always only a stepping stone and can be administratively unwieldy.

3. Direct access

Thousands of barristers have already undergone direct access training, ourselves included. Aside from the problems the current rules cause for those doing legal aid work, direct access offers real opportunities to barristers who embrace it, and there are already a wide range of examples from many different areas of the law of those who have done just that.

Former Bar Council chairman Peter Lodder QC last year talked about how different chambers are approaching direct access: one set conducted a targeted advertising campaign in magazines distributed in a reasonably affluent local area to promote ancillary work in family; a criminal set has established a programme for direct access in association with accountants and management consultants; and another set has embarked on direct access work in advising road haulage contractors.

4. Become an SRA-regulated partnership

This, of course, was our choice. You need a solicitor partner and a clear understanding that being in partnership is very different from being in chambers.

It enables barristers to conduct litigation, pay referral fees/share fees, bid for contracts – basically anything that a solicitors’ firm can do. They don’t have to, of course, and we have chosen to stay as a traditional referral practice. But the model allows for far greater freedom of choice.

A modern practice

We remain individually regulated by the BSB and intend that Artesian – named after the road on which we first met to discuss the idea – should operate to a large degree in exactly the same way as traditional chambers. We are different in that our practice is based on cloud technology using LEX Chambers Management, meaning we mainly work from home when not in court. We maintain a small office just off Fleet Street, keeping our overheads low.

Neither the BSB nor the SRA have put any hurdles in our way, at least once the SRA got its head around the idea of what we were doing (which took a little time, in truth), but getting through the regulatory thicket has taken longer than expected.

A common question is whether partners could act as opposing counsel; our view is that we would simply put up a Chinese wall in the same way as any chambers would.

We are a partnership in the true sense of the word. We have a partnership agreement, we share profits and we meet regularly as a group. Each member takes responsibility for a different part of the business, but we are all rowing together.

In fact, running the business has been the most exciting part of setting up Artesian – it has given us an incredible sense of freedom. It may seem odd to say that we felt more shackled when we were self-employed advocates, but it’s true – there’s certainly none of the inertia that characterises chambers decision-making.

This core group will remain running the practice. We have been pleased by the number of people, from QCs to ‘third six’ pupils, who are keen to join us.

Most recently, we have appointed our first associate member, Bryan Cox QC, who takes on a role equivalent to a door tenant to help Artesian service briefs which require a QC. He will retain his tenancy at New Park Court Chambers in Leeds, but will also work through and with us where appropriate – happily we need help with our current workload.

Another interesting option opened up by the LDP structure is shown by the solicitor who has joined us as an associate member while she conducts a particular case. She benefits from our systems and insurance, and our low overheads, while we gain financially too.

There are other solicitors talking to us about attaching their practices to Artesian in this way. Solicitors’ firms can also sub-contract their advocacy work to us and share in the fees, which of course they cannot do with barristers in traditional chambers.

ABSs and the Bar

Barristers who want to form an alternative business structure (ABS) currently have to go through the Solicitors Regulation Authority but, from 2014, the Bar Standards Board (BSB) is set to offer an alternative for ‘advocacy focused’ practices – ABSs, legal disciplinary practices or ‘barrister-only entities’.

The BSB will not accept multi-disciplinary practices. It is using structural restrictions to maintain the advocacy focus of those entities it regulates, rather than explicitly restricting their services to advocacy and ancillary litigation services, which would be very difficult to define and excludes too much of what the self-employed Bar can do.

Thus the key elements are:

BSB-regulated entities and self-employed barristers will be permitted to apply to conduct litigation;
BSB-regulated entities will be permitted to provide the same services as those currently provided by the self-employed Bar;
all owners of BSB-regulated entities must also be managers; there will be a 25% limit on non-lawyer owners/managers of ABSs;
a majority of the owners/managers of ABSs regulated by the BSB must be barristers or other advocates with higher rights of audience;
BSB-regulated entities and self-employed barristers will not be permitted to hold client money; and
all managers of BSB regulated entities (barristers, solicitors and non-lawyers) will be subject to the same conduct rules.

For us, becoming an ABS is about making our practice manager a partner in name as well as in status.

Will we move to the BSB when the time comes? We are happy with the SRA but, at the same time, the BSB promises a regulator more attuned to what we do. At the moment, we simply cannot say.

Was it worth it?

While we have not yet gone as far as Nick Green envisaged, we have the platform to respond quickly – we have no plans to seek a legal aid contract or to conduct litigation, for example, but clearly we could if we wanted to.

Our platform also enables us for the first time to give proper recognition to the pivotal role played by clerks. We neither consider nor call Tom Street a clerk (he’s our practice manager) and, once we convert to an alternative business structure, he will become our managing partner.

It is fair to say that at first some instructing solicitors were wary or just confused by our model. But, once they realised that we aim to operate in the usual way – and in fact can work much more in partnership with them – this has fallen away.

At the same time, we can wrestle back some of the power from instructing solicitors. How many of us over the years have referred would-be clients to a solicitor, in the hope of them returning the favour at some point in future? Well, now we can strike a commercial agreement with that solicitor.

More than a few colleagues at the Bar see what we are doing as the future for our profession. Our only regret thus far is that we didn’t do it sooner.

Daniel Jones (daniel.jones@artesianlaw.com) is a partner and Tom Street (tom.street@artestianlaw.com) is the practice manager at Artesian Law.