The next test: what to charge

On 14 February, a Valentine’s day epistle arrived from the OFT which told of its decision to close the investigation into the Master Policy and take no action. This is a highly satisfactory outcome which we all (or nearly all) recognise is for the best. The OFT, having looked at all aspects of the Master Policy, concluded that there were benefits for the Society, its members and the public through the operation of a collective insurance scheme. In particular, the OFT recognised the considerable benefits for solicitors, and consequently the public, of the Society’s collective bargaining power to secure uniform and affordable professional indemnity insurance. The OFT has recognised that the same approach as prevailed in England and Wales did not necessarily provide an appropriate solution in Scotland.

Not all was quiet on the competition front. The Society’s review instigated after Commissioner Monti’s report on competition last year continues. I wrote to all firms this month about Council’s decision to act on the legal advice that the Table of Fees has to be withdrawn. The Society obtained counsel’s advice that it could be in breach of article 81 of the Treaty of Rome, and the Competition Act 1998 by issuing a recommended Table of Fees. The Society will discuss with the Scottish Executive, OFT and Lord President how the withdrawal of the Table of Fees may be best effected. The Society will also develop advice for firms on writing letters of engagement in the absence of a table of fees.

Counsel’s advice is that it will be possible for the Society to issue historical information on the cost of running a business. I would urge firms to complete the Cost of Time Survey this year, as its analysis of particular firms’ individual costs will be of increasing value, in the absence of a recommended unit rate, for firms setting their own fee rates.

Firms should be thinking about this and taking action now. It will certainly increase the focus on terms of engagement letters and the Client Communication Practice Rules. The next area for change is likely to be advertising rules and I anticipate it will be Caroline Flanagan who will keep the profession informed of change in that area as President rather than me.

As I write this, the Scottish Executive’s consultations following on the strategic review of legal aid and following the Justice 1 Committee recommendations on complaints are still awaited, so the opportunity to discuss them at the AGM will probably be lost. These important consultations will impact substantially on the practice of law in Scotland. I invite members to engage in the discussions they create and let the Society know their views so that the response can reflect the profession’s views.

I was delighted to be invited to the Scottish Young Lawyers Association Annual Weekend. I have never forgotten the advice of two speakers when I attended the equivalent weekend. Jeannette McManus spoke of life on the front line with Ross Harper and Murphy. Her tip was to have some toys in your room to entertain the weans while mum discussed the divorce. A very practical tip which was all about client focus – being aware of and responsive to client’s needs.  Philip Love, the then President and Professor of Conveyancing at Aberdeen, counselled in the strongest terms to only ever witness a deed you had seen executed or ensure you had a satisfactory declaration from the person who had signed the deed. I had thought hard about what I could add to these pearls and settled on the suggestion that in their careers they should be confident and decisive in advising clients. Clients crave positive advice, which is what they are paying you for after all. The corollary being to know your own limits and know when to ask for advice and when you need assistance. Although I am not a fan, it reminded me of Donald Rumsfeld’s briefing on the “known unknowns” and “unknown unknowns”, when he said: “But there are also unknown unknowns – the ones we don’t know we don’t know. And if one looks throughout the history of our country and other free countries, it is the latter category that tend to be the difficult ones.” Transposed for solicitors in Scotland – it’s the things you don’t know you don’t know which lead to claims on the Master Policy.