Delivered direct - the growing band of in-house teams instructing the Bar direct
A growing band of in-house legal teams are cutting out the middle man and instructing the Bar directly, as Caroline Hill reports
June 07, 2012 at 07:03 PM
7 minute read
The Stobart Group to enter the legal market?! It hardly seemed the most obvious Tesco Law-style move, but the recent announcement that the company is to offer direct public access to a panel of barristers has been driven by its legal team's own innovations and is the latest example of a practice being repeated in-house across the UK.
The logistics business and parent of the Eddie Stobart lorry fleet has launched the service to link members of the public and businesses direct to a barrister for a fixed fee without needing to employ a solicitor.
The move comes after Stobart's legal director Trevor Howarth began instructing barristers direct in 2008, "a move which has created significant savings on the company's annual legal fees", according to the company.
While a haulage company is far from an obvious entrant to the legal market, in fact Stobart's legal team is among a growing band of in-house departments to recognise the advantages of cutting out the middle man and instructing the Bar directly.
The in-house team at BAE Systems, for one, has, since 2010, operated an informal panel of barristers' chambers, which it instructs without recourse to solicitors. Henderson Chambers, Matrix Chambers and Atkins Chambers were selected after head of dispute resolution Joanna Talbot conducted a review of the chambers instructed by BAE. The triumvirate are instructed on day-to-day discrete matters that BAE can resource itself, or to advise on whether the company should settle or fight a claim, before solicitors are instructed. For more specialist advice or large solicitor-led litigation, BAE is not obliged to use its panel.
BAE is far from uncommon, with criminal, fraud and regulatory set 2 Hare Court saying it has seen a sharp increase in such work. Until 2005 the set had received no instructions from in-house counsel but, since then, there has been a year-on-year increase. In the last three years the volume of in-house instructions has increased more than four-fold.
Instructions include advice on discrete financial crime points, anti-money laundering and know-your-customer (KYC) issues, policies under the Bribery Act and hearings before disciplinary committees and regulatory tribunals. The set recently provided training to the legal teams of national newspapers on criminal law as it affects media organisations – in particular phone-hacking, misconduct in public office and perverting the course of justice.
However, not all direct instructions are behind the scenes opinions and training. This year Brick Court's administrative and public law junior Martin Chamberlain and Sarah Love were instructed by Transport for London's in-house lawyer Jane Hart to secure a high-profile injunction preventing private taxi firm Addison Lee from using bus lanes.
Last year Brick Court also acted for BT, a claimant in British Sky Broadcasting (BSkyB) & Ors v Ofcom & Ors. BT's in-house lawyer Emily Smith instructed David Anderson QC to lead Sarah Ford and Sarah Love in its appeal that the wholesale prices for the sports channels, featuring key Premier League football games, were not calculated properly when Ofcom intervened.
Brick Court clerk Mark Simpkin says: "We are seeing it more and more. More companies have their own internal legal departments and, from their point of view, they feel they can instruct the Bar direct and achieve the same result without the cost."
At rival set Fountain Court, director of clerking Alex Taylor comments: "There has been talk in the market of a sea change of in-house departments going direct to the Bar."
Last year also saw BT instruct Hogarth Chambers and Matrix Chambers in its defence against 20th Century Fox's action to block access to the Newzbin2 website. BT instructed Antony White QC of Matrix and Roger Wyand QC of Hogarth. Hogarth director Briget Harrison says: "Chambers are being instructed by large corporate clients with large in-house departments." According to Harrison, at least five of the set's barristers count 10% of their work from direct instructions from in-house teams and the cases span intellectual property, copyright, trademark and patent disputes.
Some of the set's consumer clients are also finding direct instruction an attractive proposition and March this year saw judgment in the case of Golden Eye International Ltd and others v Telefonica UK Ltd (O2) and Consumer Focus (Intervener) [2012], a copyright infringement case in which Hogarth, led by Guy Tritton, was directly instructed by Consumer Focus.
While companies such as BT do have large and well-resourced in-house teams, according to 2 Hare Court director of business development Maurice MacSweeney, around half of the in-house lawyers the set works with are in reasonably small teams of no more than 10 lawyers. MacSweeney says: "A company doesn't need to have a massive legal function in order to benefit from using the Bar directly. Even if it's a large job, we can provide a team of barristers, which might still be less expensive than a team from a panel firm."
As in-house budgets are squeezed, cost is clearly one good reason why direct instructions have become more prevalent. Barristers clerks still refer to Nicholas Green QC's 2010 report, The Future of the Bar, in which he cited the example of an in-house lawyer who obtained quotes from three City law firms ranging from £10,000 to £25,000 and instead instructed a young silk who "rattled off a 10-page opinion over the weekend" for a cost of £2,800.
According to Talbot, instructing the Bar is more cost effective on a number of levels. Barristers will advise on a point of law based purely on the papers they are presented with, so in-house lawyers can control and limit the scope and therefore the cost of advice. Furthermore, in preparing the papers for a barrister, it helps in-house counsel to clarify and narrow down the issues in their own minds. Talbot says: "It is helpful for lawyers to crystallise their thoughts by preparing instructions to the barrister. It's a good exercise."
But if cost is a driver, there are other factors at play, including barristers' ability to offer absolute specialism in their field. In-house lawyers who know their business inside out can quickly tap into this pool of expert advice and take it straight back to the board for a decision. MacSweeney says: "They are the people best placed to know about the business and they know the commercial ramifications."
However, the Bar is still poor at marketing itself, and one costs-conscious general counsel at a large multinational telecoms company says: "To be honest, I don't go to barristers directly as often as I could and should – which is purely as a result of inertia. That said, not many barristers/chambers do any direct marketing to in-house legal teams. Presumably they don't feel they need to. If they did, they might remain nearer the 'top of mind'."
Talbot adds: "It depends on the chambers. One reason we chose the chambers we did as preferred suppliers was that they were so proactive and supportive of in-house referrals." Chambers are still somewhat shrouded in mystique to some and need to be more proactive in demystifying the process of instructing them, Talbot says.
As the Legal Services Act ushers in new competition, chambers will need to up their game. In February this year Riverview Chambers was launched – a subset of alternative business structure LawVest – which has 43 barristers and aims to provide direct access to companies on a fixed-fee basis.
With legal teams across the UK being encouraged to think a little more creatively, perhaps The Stobart Group will ultimately prove only one of many aiming to see if the Bar can live up to the promise of direct access.
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