UK law is a booming export but at home crime work doesn't pay

http://www.guardian.co.uk/law/2013/feb/07/uk-law-booming-export-crime

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From his seventh-floor office in Canary Wharf, Alan Mak surveys the citadels of corporate finance. The towers, stretching to the City, contain not only finance companies but what is becoming a British export success: legal services.

Carita Thomas's law firm, by contrast, is in a redbrick block next to Sheffield's magistrates court. She sees clients in police stations and helps people resisting deportation. Her legal aid work will be hit by the cuts in public funding that come into force this April.

These two young solicitors, both qualified for four years, represent the extremes of the profession – as commercial law booms but traditional high street solicitors face cut-price competition, lower fees and customers who can no longer afford to be represented.

Mak, 29, grew up in York, where his family, originally from Hong Kong, had a corner shop. He studied law at Cambridge and worked briefly as a researcher for the Conservative MP Ed Vaizey, now the culture minister. He works on the legal side of transactions and deals. "I enjoy the intellectual challenge and also the ability to work with businesses, governments and talented individuals when they are doing some of the biggest deals they have to do," he explains.

"London is already a global financial centre, but it is increasingly becoming a legal centre and a centre for dispute resolution. It's where some of the world's most successful law firms are based. The world is coming to London because it's a global finance centre, while the British legal profession is taking English law to the world."

Mak began as a trainee with Clifford Chance, one of the top law firms by revenue in the world. It employs more than 3,000 lawyers. Solicitors at Mak's level of experience expect to earn at least £85,000 a year. Like many others in the City, he gives up a significant amount of time to free, or pro bono, work for charities and good causes. "I wanted to do a job at the heart of business and society where doing well was important but doing good was equally important."

He is president of the charity Magic Breakfast, which delivers free breakfasts to 200 primary schools every day. He has worked pro bono for the National Autistic Society and a US prisoner on death row. "I come from a northern, working-class and minority background. For me, Clifford Chance is a platform to do good as well as to do well."

Thomas, 32, graduated in law from Edinburgh University. She spent a year working with VSO in Nepal. She now works for Howells, a large law firm with offices across northern England, and she is on the committee of the campaigning group Young Legal Aid Lawyers. "I do immigration predominantly and public law. But after April, legal aid will no longer be available for many immigration cases, like those based on the right to family life, and visa applications.

"Work on asylum and trafficking is still going to be available on legal aid, but I don't know how people will manage by themselves with the other types of cases. It will lead to a lot of heartache. Immigration law is very complicated and many people don't have the means to pay for advice.

"No law firm is going to be able to survive just on legal aid any more. For me, some of the worst affected will be people with limited funds who are fighting deportation because of their right to a personal or family life. Those cases can be particularly complex."

Thomas earns £31,000 a year. "I can't think of a better job to do than this," she says. "There's never a moment where I'm clock-watching. These are massive issues in these people's lives."

She believes there will soon be fewer opportunities for people entering the profession. "We are going to lose a lot of talent from the legal aid field and I question whether we will ever get it back. My clients will need good lawyers in the future. The traditional way of looking at lawyers and their training has to change, to support people from all backgrounds to enter the law so they can do this type of work."

The gloom is most intense among barristers specialising in crime. Last year the Criminal Bar Association, which has 3,500 members, raised the spectre of a strike in protest at repeated cuts in fees.

According to Maura McGowan QC, chair of the Bar Council for England and Wales, the prospect of more modest incomes may deter graduates burdened with heavy debts from university. Only the wealthy will be able to join in years to come, she fears. "These changes run the risk of damaging the gains we have made in improving social mobility and diversity at the bar."

The difficult prospects have not so far put off applicants. Back in 1980, according to the Law Society of England and Wales, there were 38,000 solicitors. By 2012, that figure had risen to 165,971 – of whom 128,778 were listed as holding practising certificates. But last summer the Solicitors Regulation Authority voted to scrap the minimum salary for trainees. Mark Stobbs, director of legal policy at the Law Society, says: "There a lot of people who try to qualify as solicitors but can't get training contracts. There are lot of solicitors in small practices who are finding times very hard indeed. The reduction in crime is affecting firms and there are more out of court disposals.

"Once, selling your practice was your pension. Now solicitors worry about the arrival of the Co-op, which is entering the [deregulated] legal services market and plans to employ 3,000 solicitors."

Some high street solicitors are said to be "zombie firms", with not enough cash to pay staff redundancies or the six-year legal insurance required to close the firm. Signs of the legal profession's newfound success are not hard to find. The gleaming new Rolls Building, in central London, home to the main commercial courts, is where Russian oligarchs and Saudi princes are increasingly bringing their international disputes for settlement. Large London firms are merging with overseas solicitors to capture an ever more globalised market.

The contribution of legal services to UK exports almost doubled between 2004 and 2010 – from £2bn to £3.7bn, according to the Office for National Statistics. By contrast, the size of the "legal activities" sector in the UK economy remained stationary between 2007 and 2010. "The UK is a world leader in the provision of legal services and we must all work hard to maintain that enviable status," the justice minister, Lord McNally, has said. "However, as well as celebrating its great achievements we also need to control costs.

"Our reforms will target legal aid at those who need it most to get best value for the taxpayer, and changing no-win no-fee deals will drive costs down for consumers. Legal services is a sector in flux and will need adaptability and flexibility to continue to prosper."

The success of Clifford Chance and other firms has profited the voluntary and legal aid sector for years through the significant quantity of pro bono work carried out by City lawyers. That co‑operation is now in danger of coming apart. Law for All, a chain of law centres to which Clifford Chance seconded its trainees, collapsed 18 months ago, blaming government cuts in legal aid. "One less opportunity to send lawyers out into the community," said a Clifford Chance spokesman.

Crime in free fall<br />

There has been a surprise 8% drop in crime across England and Wales over the past year, according to the crime survey for England and Wales, suggesting the long-term decline in crime since the mid-1990s has resumed.

Ministry of Justice reforms to save £350m in civil legal aid come into force in April this year. Funding will soon disappear for most cases involving divorce, child custody, clinical negligence, employment, immigration, housing, debt, benefits and education. According to the government's own estimate, 623,000 people will lose out on advice.

Legal aid for criminal cases remains but the fees paid to barristers for taking cases have been progressively cut by both this and the previous government. Criminal fees have fallen by 13.5% over the past three years. Fees for handling murder and homicide have dropped by 25%.

Maura McGowan QC, chair of the Bar Council, said: "We used to criticised for earning more than hospital consultants. Most criminal silks would now like to earn as much as hospital consultants. If crime continues to reduce there may well be less work for criminal barristers. But the commercial bar is doing extremely well."