ARTICLE
The present picture
D
However it is unlikely that such businesses will be offering the same level of consumer protection or the customisation or depth of service that well managed solicitors’ firms can provide. To meet this challenge there are three things members can do.
uring the early days of the pandemic in March of this year, news was eagerly awaited and though the spring months speculation raged daily upon all manner of possible outcomes. Much has now been said and written about the experience of lockdown and its impact on families, plans for education, travel and the world of work. After a brief respite during the summer we hover at the brink of a journey through the dark months of winter but hopefully with the benefit of experience and better prepared with plans for delivering our work or developing careers in a new direction.
1. maintain contact with clients and former clients making them aware that you are available to meet their needs 2. give assurance concerning costs and standards by flagging the information on your website a required under the SRA Transparency Rules on your website 3. emphasise the value of the outcomes that you can deliver backed up by long-term protection through professional indemnity insurance and our compensation fund. At a time when many companies and suppliers will be failing the most consumers are looking to avoid additional risks.
Many of our members are smaller firms for whom innovation and initiative are everyday tools of trade. However there have been some fairly radical changes adopted by the profession using some of the technological tools that have been around for a while but only now have been taken up with serious intent.
The Law Society has and advice on tis coronavirus page and really useful toolkits on return to the office www.lawsociety.org. uk/topics/coronavirus and for tips on Brexit transition www. lawsociety.org.uk/topics/brexit/how-to-prepare-for-the-endof-the-transition-period-a-10-step-checklist-for-law-firms. ■
The challenges of conducting interviews, witnessing signatures, explaining procedures and dealing with courts and other institutions who are not fully operational, has forced our members to develop alternative ways of meeting client needs. For some clients the need to access lawyers has reduced as some commercial markets were closed - temporarily in the case of conveyancing and more permanently for some of the self employed community who have less income and may have ceased business activity. The impact on firms is patchy -some niche firms prosper whist others fail and mixed practices may suffer reduced impact depending upon their market sectors of normal operation. Retailers in particular have been overwhelmed with a range of new problems having to furlough employees and compete with online producers. Commercial property landlords have been left high and dry and having to deal with insolvency situations. The demand for the services of employment solicitors and family lawyers has increased. The criminal courts now have an enormous backlog and the LAA have introduced enhanced payments on account arrangements to mitigate cash flow for legal aid practitioners. This has been welcome alongside new Crown Court payment scales and the extension of the criminal legal aid contract until 2022. What next? So how should we respond over the next six months. The prolonged period of uncertainty. extends back before the pandemic to the previous years when the Brexit stalemate dominated the news and economic activity. There are two probabilities - that clients will need advice from solicitors more than in the previous periods but also that personal finances will be stretched. Solicitors will need to be resilient as they have shown themselves to be thus far and flexible to meet the demands and aware of competition from non-regulated service providers. Unregulated services are available nationwide to provide family advice, employment advice and court representation, through non-qualified organisations. These businesses invariably represent themselves as offering cheaper outcome for clients and they will not have the same regulatory burden as SRA regulated firms. Indeed that freedom may well go to boost sophisticated marketing and convenience software.
20 | The Bill of Middlesex
Finding your way
I
n March those solicitor firms -about 15% of the market - who renew their annual professional indemnity insurance reported an uncomfortable jump in premiums as the market hardened. At the time of writing this same situation is being played out across the 85% of firms who renew at the end of September. Most will renew cover often with the same insurer but will find the cost has increased between 25-40% depending on any increase in turnover or proportion of conveyancing. The increases are particularly steep for those with a claims record and premiums for cover in the layers above the minimum of £2m/£3m are also substantially higher. The reasons for this have not been hidden - insurers have withdrawn from the market or been unwilling to take on any new risks and decided only to consider existing clients and to avoid exposure to certain types of work. It seems inevitable that apart from firms closing for retirement or agreed merger there will be a number of firms left without cover or forced to make the uncomfortable decision not to renew because of the steep increasing cost and the uncertainties of the Covid induced recession. For some, prepared to pay the increased cost, the availability of government backed loans will have provided the means of staying in business for another year to await recovery of the economy. For those facing the decision to close the steps are difficult but help and support from various agencies supported by the Law Society will be of help so that the journey is not faced alone. The organisations have been briefed on the situation and are aware of the issues. There have also been discussions between the Law Society and the SRA and the SRA guidance on requirements for closing down you practice are clear www.sra.org.uk/solicitors/ guidance/closing-down-your-practice. There is also an article on this at https://communities.lawsociety.org.uk/july-2020/ closing-down-your-firm/6001185.article.
