You’ve been asked to manage a Chambers?…. Good Luck!

 The title is an all too common reaction we get. So for many Barristers another article on Chambers Management will no doubt raise a degree of cynicism; “yet more corporate meddling, restructuring a system that has delivered justice effectively for so long”. If there was an equivalent media focus on strategies to enhance Members personal practices then there might be a greater enthusiasm to read on. This epitomises the challenge that Heads of Chambers, and those appointed to manage Chambers, face as they attempt to deliver their strategies.

 This article addresses challenges faced by those tasked with leading chambers, the equilibrium of enhancing individual members’ practices while delivering a strategy for the long term security of the set as a whole. It considers some of the options that have been chosen, the issues that arise and the lessons that can be learnt. Is there a radical solution?

This was a recent reaction from a Barrister with many years’ experience demonstrating the cynicism that exists when it comes to the introduction of innovative management solutions. However there is a clear need for many chambers to develop and deliver strong plans for the future. Can this be done?

Simply hiring a “CEO”, with a big salary but limited actual power, and passing it over to them is unlikely to be the solution.

The traditional role of the profession is being squeezed with tightening revenue streams and increased competition, including from solicitor-advocates. Barristers are also applying to deliver public (direct) access and to conduct litigation. The barriers to competition across the legal services sector are falling. While this might please the LSB[1] it does nothing to ensure the long term security of chambers, nor the bar as a standalone profession.

In the face of this challenge what is the profession doing?

There are a few outliers, experimenting with different strategies such as Alternative Business Structures (ABSs) regulated by the SRA. However, despite the BSB being approved to regulate “businesses authorised to carry out and provide reserved legal activities” last December, it was recently reported that the vast majority of barristers were “quite happy” with the traditional chambers model[2] .

It is clear that anyone wanting to drive change in the profession is going to have their work cut out. As Niccolo Machiavelli succinctly stated:

“There is no more delicate a matter to set in hand, nor more dangerous to conduct, nor more doubtful of success, than to step up as leader in the introduction of change. For he who innovates will have for his enemies all those who were well off under the existing system and only luke warm support in those who might be better off under the new.”

There are numerous examples of Heads of Chambers failing in their efforts to deliver changes even when voted for by the members. The obstruction from those who feel their personal practices could be damaged and the limited support of others all help to derail the plans. Additionally, if there is no long term personal benefit to the leadership why should they waste time on fighting the set when they still need to protect and maintain their own practices?

Inevitably it comes down to the balance of interests between members’ own practices and the wider ones of the set, whatever its structure may be.

A few points to consider:

  • The majority of barristers are not interested in being employees of a business.
  • Surprisingly (or perhaps not) for a profession reliant on the eloquence of ones arguments chambers can be particularly poor at the quality of communications.
  • The success of the Chambers can drive the success of a members own practice. Being part of a successful set will make a significant difference.
  • Even so many barristers still grumble when it comes to paying their rent. The idea of chambers retaining significant reserves (profit) commonly leads to calls for reductions in the charges to members.
  • Any barrister who takes on responsibilities within the set is unlikely to benefit personally from the investment of their time. One Head of Chambers (HoC) spent significant personal time and energy in sourcing, negotiating and managing the development of smart new offices for his set. The new premises clearly helped to enhance the reputation and performance of chambers, yet the direct return for the HoC was limited. At retirement he would gain very little from the years of investment in the wellbeing of the set.
  • Beyond bonuses and commission the senior management team (clerking and administration) have little opportunity to benefit from the long term investment in chambers, or the power to implement change.

To be successful an organisation needs a number of factors:

  1. clear leadership, capable of implementing decisions,
  2. good communication,
  3. a committed team with a clear sense of direction,
  4. an attractive service that the clients want use, and
  5. deliverable benefits to leadership, staff and members.

The actual structure whether traditional chambers, authorised body or ABS will ultimately depend on what suits the group best. They each have their strengths and weaknesses.

Traditional Chambers

  • A well-established model allowing members to develop their own practices.
  • Often lacks of strong decision making structures, struggling to respond effectively to opportunities (eg. public access and litigation by barristers).
  • Limited personal benefit for investing in long term strategies within chambers.

BSB Authorised Bodies

  • Allow barristers to own the organisation and create a strong leadership structures.
  • Provides the potential for long term return on investments.
  • Barristers may become employees rather than having their own practices, losing influence over their direction.

ABS’s

  • Can deliver a wider range of services and combine of a range of professions.
  • Clear and strong leadership structures.
  • The potential for significant long term return on investments.
  • Currently, only achievable via the SRA so barristers face two sets of regulators to deal with. (BSB should be able to regulate these entities in 2016).
  • Risks losing the kudos and differentiation that chambers can have and use to their advantage.
  • Seen as direct competition to the solicitors who may be major sources of work.

Not all of the above will apply to every barrister led organisation and each set needs to consider what works best for them. However the challenge remains that the successful “chambers” of the future will need to:

  1. be flexible and capable of responding effectively to new challenges, and
  2. deliver the correct balance between the individual interest of the barristers and the long term development of the set.

There is no “one size fits all solution” but the following demonstrates how a little thought may deliver a solution.

There are already a number of sets where the chambers itself is a limited company providing traditional services to its members. At present these companies are typically set up as not for profit and designed purely to provide some financial protection.

A logical step would be to take advantage of the changing regulations and develop these limited companies into profit centres in their own right. They will still focus solely on providing services to their membership as before but members who wish, or are invited, will also become shareholders and directors of the limited company.

This will limit the voting power of the non-shareholding membership. However these are the de-facto customers of the “Chambers Co.”. Delivering high quality and cost effective services to them must remain the primary focus. The Chambers must still meet its compliance duties, including the principles of the cab rank rule.

The enhanced structure has the opportunity to strengthen the leadership in delivering future security for the set. It allows value to be developed within the chambers company itself, to the benefit of those who invest their time. It allows junior members to buy in as they become more established. By maintaining healthy reserves and profits the Chambers are in a better position to invest for the future and also to support pupils and juniors.

This is not a global, or particularly radical, solution. It won’t be the strategy for everyone but hopefully demonstrates that relatively small changes in structure and focus can make a difference.

The ability to empower the leadership, rewarding those who sacrifice time focusing on their personal practices, will be a key factor to ensure the long term strength of the set as a whole…. whatever the solution that suits your organisation best.

Alex von der Heyde BSc (Hons), MBA

Managing Director

Esterase Limited

Email:    Alex.vdh@esterease.co.uk

Tel.:       08455 199149

[1] LSB – Legal Services Board

[2] “Bar 2015: barristers lukewarm on innovative business models” Gazette 26/10/15


 

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