There are high hopes for a new initiative to allow barristers to manage client money. Suzanna Ring reports

Navigating the relationship between the Bar and solicitors has never been easy, with co-dependence always in tension with the stark differences in culture and practice between the two branches of the profession.

But over recent years, however grudgingly adopted by sections of the Bar, there has been an unmistakable drift towards barristers cultivating direct access, seeing chambers take instructions directly from clients.

The expectation – the hope – of some of the senior members at the Bar who believe the future for the advocacy profession will be secured by competing much more directly with solicitors is that this evolution has reached an important new stage with the launch last week of BARCO.

While the creation of the new third-party escrow account may not immediately quicken the pulse, the Bar Council certainly sees it as a key move in the development of the modern Bar.

BARCO is structured as a limited company – which is applying to be regulated by the Financial Services Authority – and will provide escrow services to barristers and their clients.

The account will be held by Barclays Bank, which will see barristers able to effectively handle client money for the first time, allowing counsel and clients to interact over remuneration without the help of solicitors or breaching rules of conduct.

Making things easier?

The Bar Council's tag line for BARCO – 'Working with the Bar has never been easier' – speaks of the high expectations that are being attached to the project.

BARCO will launch in full next year following a pilot scheme with 11 sets, including Thirty Nine Essex Street, St Philips Chambers, St John's Chambers and 37 Park Square, which will be carried out over the coming months.

And while the extent to which the third-party escrow account in itself will reduce the interaction between solicitors and barristers is likely to be minimal in the near future, the long-term implications that BARCO will have for chambers' financial management nevertheless appear to be considerable.

Under the current Bar Standards Board code of conduct, barristers are not allowed to hold client money, instead relying on solicitors to manage the finances of a case and pay them their fees.

However, in 2007 the Solicitors Regulation Authority (SRA) overhauled its code of conduct, removing the onus on solicitors that had to that point forced them to pay counsel's fees regardless of whether or not they themselves were paid by the client, consequently removing the security barristers had enjoyed of always being paid regardless of difficult clients.

"There was always a degree of sensitivity about solicitors having to pay barristers whether or not they were paid by the client," says Thirty Nine Essex Street chief executive and director of clerking David Barnes.

"When the Law Society amended its rules, it was only right that the Bar should also rethink its position for its own security."

Before BARCO, the only fees barristers have been able to receive direct are for very small, specific pieces of work where clients can be told upfront exactly how many hours will be involved and how much it will cost them.

This, of course, is not conducive to the majority of advocacy work, which often involves long-running cases where work levels and fees are dependent on unpredictable court-based outcomes.

Ensuring security

BARCO should also provide barristers with a means of ensuring their own security over payment, without having to rely on the judgement of solicitors when it comes to determining whether a client is good for the fees or not.

St John's Chambers' development and support services manager David Anderson comments: "The first and most immediately effective use will be for block contract work where you are handling a large volume of cases from one client.

"Rather than the administrative burden of paying individual bills, a client will now be able to agree a monthly payment into the account that can be drawn upon as the cases are completed."

This direct interaction also gives rise to speculation over a reduction in the use of solicitors, with some clients opting to go straight to counsel.

The legal profession has wrestled with the possibility of a shift in this direction for many years, with former Bar Council chairman Nicholas Green QC urging chambers to set up separate business units dubbed 'ProcureCos' in 2010, to help them compete with solicitors to win work from clients.

However, while barristers concur that this could happen in the in future, the feeling from most is that BARCO is more of a practical solution, rather than a market-changer.

Herbert Smith Freehills litigation partner Ted Greeno (pictured) says: "I doubt this new facility will really affect the big institutional clients, but it could make some difference for individuals and foreign clients who want to go straight to the Bar if they are prepared to pay upfront."

But while such trends present little immediate threat to the City's leading litigation practices, it is hard to dispute that BARCO could be a significant move at a time when direct access is unquestionably becoming more fashionable with major clients.

At Legal Week's flagship Corporate Counsel Forum last month, there was a repeated refrain from senior in-house lawyers about the better value provided by barristers as opposed to solicitors.

The past five years have seen a range of companies including BAE Systems, BT, Everything Everywhere, Transport for London and several local authorities develop direct access.

By the same token, a number of sets such as Monckton Chambers and Essex Court have bolstered their links with in-house legal teams.

With ProcureCos proving still too radical a step for most in the Bar, BARCO could prove the acceptable face of modernism for the forward-thinking advocate.