Law Firms Going Bust

[Goat]

I had thre quotes for my case...£250 per hour was average....much more if you are in the City...Cherie Blair comes to mind...what was it..£4000 per day?

£250 p/h really is a huge charge out rate when you look at it.

The rough rule of thumb for the professions is 1/3 salary, 1/3 overheads and 1/3 profit. Are these £250 p/h fee earners really being paid £135,000 p/a - I doubt it, half of that would probably be closer to the mark.

[GinAndPlatonic]

You're arguing for law of the jungle for big cats when you're a guinea pig living in the same jungle.

We are all in the jungle. It is just that some only realise it when the water hole runs dry...Ok I`m a guinea pig but I`m not the one squeeling...

[okaycuckoo]

Oh dear it`s horrible isn`t it. They now have to compete in a real open market environment which is not not subsidised by Legal aid. The best will survive and the weakest will drop by the way side. I`m self employed and have been for thirty five years. I do not earn a mint but I do compete in an open market and look after my customers.

Why not solicitors. Tough ti tty if they have been fed a line from careers advisors or by their peers about what a wonderful and lucrative profession it was to get into. Most good things come to an end.

On the litigation side it's not an open market because their fees are restricted by the costs system. I know one area where costs haven't risen for 20 years.

On top of that litigation has been squeezed in favour of mediation and court hearings are being reduced.

All of this has been going on since 1993, bit by bit year on year.

But the big hit is just about to come, with giant corporations setting up their own law firms. I predict eventually there will be as many law firms in this country as banks or supermarkets. Now that's a free market!

[The Knimbies who say No]

I wonder to what extent the advent of the personal injury claim has papered over the cracks for some solicitors too in recent years. That particular beano needs closing down sharpish, which will only add to the current woes faced by many. Welcome to the real world, eh?

I imagine architects might be looking on with a wry smile, given what seems to have occured over the past few decades with their profession, if what I've been told is correct.

[davidg]

The only one I can think of is legal aid reforms,

Alternative Business Structures.

[2buyornot2buy]

The NI legal aid firms and counsel seem to do rightly. Firms with a couple of partners and a few associates raking in several million each year from criminal legal aid alone. It obviously pays. I think the problem is with the adversarial system is just too expensive.

[2buyornot2buy]

Also can someone explain fee uplifts to me? I can't get my head around the fact you can take on legal aid work and claim extra money based on complexity. Why isn't it build into legal aid fees? And who decides on the level of complexity?

[wonderpup]

The other thing that is going to make a big impact on the law is technology- sooner or later automated legal advice online will be workable for many routine issues- after all the law is essentially a form of 'big data' that operates by a definable rule set- it's hard to imagine that this area of commerce will forever be immune from automation in one form or another.

[chronyx]

Oh dear it`s horrible isn`t it. They now have to compete in a real open market environment which is not not subsidised by Legal aid. The best will survive and the weakest will drop by the way side. I`m self employed and have been for thirty five years. I do not earn a mint but I do compete in an open market and look after my customers.

Why not solicitors. Tough ti tty if they have been fed a line from careers advisors or by their peers about what a wonderful and lucrative profession it was to get into. Most good things come to an end.

Couldn't agree more

[spyguy]

I took an interest in the UK legal sector a few years ago. I was more interested if there was any money to be made from it.

AFAIK I could not.

My SIL is a lawyer (now) and one of my casual drinking associates is a partner at a local regional company.

SIL qualified 4 years ago. Did her LPC and - just - got her placement - whatever it is - working for a years or so for b.gger all.

Now she qualified from one of the top 3 UK university for law.

Out her class of ~40, only about 5 went onto practice.

The Lawyer website claims that only a small percentage of law grads go on to practice!

My SIL classmates struggled and gave up. God knows how people from less respected do - I guess they don't.

The drinking buddy I was chatting because of the smaller solicitor had folded/packed up shop - at one stage there were quite a few notices in the paper along the lines of 'Mssr Bullshitter + son have ceased to trade. All documents are with Mssr B.llox and co'.

Bloke said work really dried up. Too many companies chased CFA cases (conditional fee agreement) - 'After a family celebration, my client was walking along the pavement and tripped,resulting him not being able to pursue his childhood dream job of being an astronaut.' etc etc.

Very few of thee paid out. They ran up huge expenses pursuing them.

Then there was the change from parternships to LLPs. Small companies got dreams of grandeur and scaled up their operations.

Look at the likes of Halliwells. Even big firms Deuey + Lebeof. The Lawyer website is well worth a an occassional read.

This week's Economist had an article of how the wider 'professional services' group are in sh1t - law, accountancy, management/business consultancy.

Seems like they've all hit massive structural (computers) and cyclical (cash too short for the month) problems over the last 5+ years.

Law really doesnot seem a worthwhile career choice fro the forseeable future.

[davidg]

This week's Economist had an article of how the wider 'professional services' group are in sh1t - law, accountancy, management/business consultancy.

Seems like they've all hit massive structural (computers) and cyclical (cash too short for the month) problems over the last 5+ years.

Law really doesnot seem a worthwhile career choice fro the forseeable future.

The latest Law Society Gazette has an article about why law firms are struggling that touches on the problems of too big structures with too many expenses. If you have a copy it might be of interest.

[The Masked Tulip]

There are two roads in Swansea - Walter Road and St Helens Road - both with huge Edwardian buildings. For most of my life they were the roads where the solicitors' offices were. Names of firms that everyone knew in Swansea and people spoke about the people who owned them in hushed tones.

The roads were clean, tree-lined and always had the latest, most expensive cars parked in them.

Then, about 2 or 3 years ago, they all started closing one by one. One or two of the bigger firms relocated to an enterprise park but most simply closed shop. I am told that it was because of legal aid being cut back.

St. Helens Road now looks more and more like Little Bangladesh. I am amazed at the different foreign languages I hear on that road now and it is, frankly, filthy. Walter Road is turning into bedsit land.

Goodness knows where all the solicitors went.

[Maynardgravy]

St. Helens Road now looks more and more like Little Bangladesh. I am amazed at the different foreign languages I hear on that road now and it is, frankly, filthy. Walter Road is turning into bedsit land.

Goodness knows where all the solicitors went.

Perhaps they were all involved in accidents that weren't their fault.

[okaycuckoo]

Perhaps they were all involved in accidents that weren't their fault.

I think that applies to most of us. Some call it neoliberalism, others Thatcherism.

My version? I didn't land on Plymouth Rock - Plymouth Rock landed on me.

[Guest eight]

There are two roads in Swansea - Walter Road and St Helens Road - both with huge Edwardian buildings. For most of my life they were the roads where the solicitors' offices were. Names of firms that everyone knew in Swansea and people spoke about the people who owned them in hushed tones.

The roads were clean, tree-lined and always had the latest, most expensive cars parked in them.

Then, about 2 or 3 years ago, they all started closing one by one. One or two of the bigger firms relocated to an enterprise park but most simply closed shop. I am told that it was because of legal aid being cut back.

St. Helens Road now looks more and more like Little Bangladesh. I am amazed at the different foreign languages I hear on that road now and it is, frankly, filthy. Walter Road is turning into bedsit land.

Goodness knows where all the solicitors went.

Just another example of how high land costs can mean that marginal businesses can be worth more closed than trading. It's entirely possible that they make more renting out the building to twenty immigrants than they ever did as a law firm. Consequently marginal employment for the staff becomes marginal unemployment.

[heresjohnny]

One of my brother in laws left his law firm a few years ago and has set up his own business doing "offshore tax planning" for wealthy people. Only other legal person i know is a mates sister who has been in house lawyer for an energy company since she qualified years ago.

I also worked for one of the high street banks years ago doing marketing and they had a massive (i mean massive) legal department - had to meet them quite a lot to sign off adverts and deal with any legal bother like when we mailed people we shouldn't and ASA complaints and the like. I having a law degree doesn't mean you have to be a solicitor as such.

[Eddie_George]

They need some bankster prosecutions to help the law industry. Call it a stimulus or a "bankster scrappage" scheme.

[okaycuckoo]

They need some bankster prosecutions to help the law industry. Call it a stimulus or a "bankster scrappage" scheme.

But isn't it better to have the FSA mediating between the public and banks that are subsidised by the public? No pesky facts coming out.

[Sancho Panza]

If you don't know anything about the finances of law firms, you ain't got nothing but prejudice to go on.

It's no good moaning about the fees, when the chances are nigh on certain that you couldn't do the work yourself, but you do want someone else to take the hit if something goes wrong.

AFAIK, law firms haven't made much money for years, since the government told them to allow unrestricted numbers of lawyers into the profession. The result has been declining wages and prices, with the average fee earner making about £15 per hour, and the billing rate overstated by 300% because two thirds of the time spent is not billed. Any profits go straight into the pockets of the partners, who bought their premises 30 years ago for £10,000 and are planning to retire before financial armageddon hits the country, with the profit at the end coming entirely from the house price rise, not from the legal work. Basically, 3 Bob cratchets work for survival money so that one partner can have a middle class life. Why do you think the squalid living conditions of lawyers is becoming a standard topic in comedies?

Legal aid has nothing to do with it. For years now, legal aid has been cut to peanuts, that's why you can hardly find any firms doing it (apart from criminal firms)

A couple of facts: to do a flat purchase takes about 20 hours if you actually read the documents. Look how much they're charging for it. Second fact: Take a look at your nearest solicitors premises and ask yourself the question when was the decor last changed? If it's about 20years ago, that would be about average.

They haven't made any money for years, which is why there's going to be a steady stream of law firms going bust, partners had up for stealing client money, and cases where it turns out no one read the documents, because the staff who were paid £10 an hour, didn't have time to read them.

If it takes you 20 hours to read the docs and complete on a flat then you shouldn't be in the business anyway.

The problem is for a lot of solicitors is that they're advice is incredibly poor.It normally takes two weeks for me to get to see my chap unless it's an emergency because his advice and guidance is superb and I'd rather wait,than pay a similar sum for some bumbling idiot/easy on the eye totty (there's one law firm in particular-from what I hear obviously- in London where there are a lot of very good looking girls).

Another for instance while I'm on the subject.A local sol,gave up his partnership years ago and set up on his own working from his adapted outhouse as a divorce lawyer.In certain social circles,it's a race to sign him up when the big 'D' rears it's head.A lot of firms could leave City Centres.

What conveyancing supermarkets are we talking about? Are they any good? Anyone here used one?

myhomemove.com consumed countrywide who were the other big player.They basically give finder fees to EA's and provide a branded service in return.So when you ring up you think you're speaking to say 'Boxtons' conveyancers but actually it's MHM.

They used to be cheap but now come in well above my local chap.

The situation currently is that most local sols are there or thereabouts.The difference is that MHM have their foot in the door at the EA level.

edit to add;they have software that allows most of the basic humdrum work/phone calls to be done by clerks,thereby freeing up the guys who can bill to do the billable work-quite a sensible practice.So roughly speaking,one or two Licensed Conveyancers would run a team of say ten clerks and they'll be looking to complete roughly 15-20 cases per week.There'll normally be soliticitors overseeing a wider range of issues,higher up the food chain.

I took an interest in the UK legal sector a few years ago. I was more interested if there was any money to be made from it.

AFAIK I could not.

My SIL is a lawyer (now) and one of my casual drinking associates is a partner at a local regional company.

Law really doesnot seem a worthwhile career choice fro the forseeable future.

It hasn't been for some time.The cream will always rise to the top but there's a lot of dross that can hide when there's 120,000 house transactions a month but finds nowhere to hide when there's 50,000.

The trick to getting pupillage/a trainee contract is to know someone who's in charge of managing big corporate caseloads.Otherwise,be brilliant,persistent or lucky.

Much like getting into medical school I guess,where the sons and daughters of Doctors/Dentists will have natural 'in' given that they've been around medical language all their lives.How does one wink? There we go.

Can I say that?

Edited September 27, 2013 by Sancho Panza

[Guest eight]

If it takes you 20 hours to read the docs and complete on a flat then you shouldn't be in the business anyway.

We got a good one going on now. Our house was a repo, bought a good few years ago now. Recently found out that a charging order was made on it some time before we purchased it, but that the charging order states "XXXXXX Street" whereas we actually live at "XXXXXX Road." Obviously the searches at the time came up blank but amazingly the recent correspondence regarding the matter had the correct address on it!

This is going to take some untangling, that's for sure.

[Errol]

who decides on the level of complexity?

It's normally pretty self explanatory. Murder, for example, is usually more complex than assault or theft.

[Bloo Loo]

We got a good one going on now. Our house was a repo, bought a good few years ago now. Recently found out that a charging order was made on it some time before we purchased it, but that the charging order states "XXXXXX Street" whereas we actually live at "XXXXXX Road." Obviously the searches at the time came up blank but amazingly the recent correspondence regarding the matter had the correct address on it!

This is going to take some untangling, that's for sure.

dont think so...the forms have to be correct...the order was made on a different address...thatll be £250 please.

[Guest eight]

dont think so...the forms have to be correct...the order was made on a different address...thatll be £250 please.

The other address doesn't even exist. God knows where it's filed at the land registry.

[Ungeared]

It's obvious to me that the £250 per hour is danger money

http://www.dailymail.co.uk/news/article-2409506/Solicitor-facing-disciplinary-probe-dubious-deals-stabbed-death-park.html

http://www.bbc.co.uk/news/uk-england-wiltshire-22936650

http://www.walesonline.co.uk/news/wales-news/solicitor-told-plan-leave-partner-2046169

http://www.centralfifetimes.com/news/roundup/articles/2013/07/16/464452-woman-and-solicitor-threatened-with-death/

http://www.liverpoolecho.co.uk/news/liverpool-news/liverpool-solicitor-nick-marray-tells-4801502

[okaycuckoo]

We got a good one going on now. Our house was a repo, bought a good few years ago now. Recently found out that a charging order was made on it some time before we purchased it, but that the charging order states "XXXXXX Street" whereas we actually live at "XXXXXX Road." Obviously the searches at the time came up blank but amazingly the recent correspondence regarding the matter had the correct address on it!

This is going to take some untangling, that's for sure.

Hmmm. Very tricky, but needs sorting. You might consider applying to discharge: http://www.justice.gov.uk/courts/procedure-rules/civil/rules/part73#IDAVRYIC