06 March 2008
London
Jack Straw has spoken on legal services reform, diversity and legal aid at the launch of the Law Society's campaign on 'markets, justice and legal ethics'.
The Right Honourable Jack Straw MP, Lord Chancellor and Secretary of State for Justice:
Good evening, it is a pleasure to be here at the launch of the Law Society's 'markets, justice and legal ethics' campaign. The Law Society plays a pivotal role in the legal sector, and I commend it for stimulating the debate on the values which go to the very core of why individuals pursue a career in law.
The need for a strong legal system committed to justice was seen no more clearly than during my five years as Foreign Secretary. As I visited a great number of countries, I had time to reflect on what was crucial, what was fundamental to the welfare and happiness of a nation's citizens. In the end it was not the availability of a country's natural resources, for they can easily be misused. Nor the vagaries of the climate important though that is; it was instead the strength of its institutions, the quality of its public administration, and above all whether all its citizens, poor or rich, low or high, got justice against the powerful, and the state. And where the legal system did not provide protection and the rule of law was not promoted I saw the enormous damage this produced.
We are fortunate in the UK to have such a strong legal system, judges of the highest probity and a profession of exceptional quality. The UK's legal profession is one of the finest in the world. The expertise, the professionalism, the dedication to delivering justice is unrivalled. That is well recognised across the world.
The legal sector makes a great contribution to the British economy. In the last financial year the sector's turnover was £23.3 billion - more than double what it was in 1997. And we are the second biggest exporter of legal services in the world - our exports of legal services grew to £2.6 billion in 2006.
But to see the importance of the profession in only economic terms forgets the social contribution which lawyers make. It is through them that the law is connected to the people and the communities they serve, whether the world community of international trading companies, or individuals unable to sort out the problems of debt, social security, relationships or impossible neighbours.
The profession has moved on from Charles Dickens' vivid description of a self-interested profession in Bleak House. His contempt for the arcane English law, its practitioners and the misery it perpetuated for the vast majority of citizens was clearly summed up by the familiar line 'The one great principle of English law is to make business for itself'.
That is still one view of the profession. It is a long time since I practised, but because I am still part of the tribe I often am the subject of such brickbats myself. And it would be idle to pretend that the legal profession is not one where the rewards - for some - can be great. But the rewards for many, I know, are rather less than the parody of the profession implies. And what binds the profession together, the essential ingredient without which it is nothing, is its values - the heart of this campaign. Values which earn trust, protect the vulnerable, promote rights, provide a high standard of service and ensure access to justice for all. These are the values which post-Dickens and the 1870 reforms have underpinned generations of lawyers and through which they exercise their responsibility to enrich and protect society.
But as venerable and well-respected as the legal profession is, we have to accept the profession cannot be immune to change. The way solicitors and barristers do their job, the manner, the style, the environment has changed significantly over the last decade. And so we have to consider how best we can still give effect to the values which underpin the profession, but in a way which enables it to meet the demands of the markets in which the profession operate.
That is why there is such a recognition, across the profession that the legal system has to continue the process of modernisation and change, becoming more reflective of society and more effective and efficient. And it is in the pursuit of this that I want to touch on three specific areas tonight: legal services reform, diversity and legal aid.
Legal services reform
The Legal Services Act 2007 is a catalyst for more growth in the profession and for the legal services market to flourish. The legislation was greatly improved as a result of the constructive dialogue between the professions, consumer groups and the government, and I hope this positive dialogue will continue as we look to implement the Act. Andrew was very generous in the compliment he offered for the way the department worked with the Law Society on the Bill. But I must just say that the work was by and large done by the time I arrived, and so all the plaudits should go to Lord Falconer and those in the department who worked so hard.
A key aspect of the reforms is allowing for Alternative Business Structures, paving the way for a dynamic legal profession that is able to respond more effectively to the needs of the consumer. Alternative Business Structures will be instrumental in widening consumer choice and access to high quality legal services.
But it is not only about consumer choice. There will also be opportunities and incentives for the profession to innovate. By permitting different types of lawyers and non-lawyers to work together to provide a range of legal and non-legal services, lawyers will have greater flexibility in structuring their businesses to take advantage of domestic and global markets.
Whilst these new structures will not be able to emerge until after the Legal Services Board is established in 2010, the Government is keen to realise the benefits of these new structures as soon as possible. So the Act allows limited forms of Alternative Business Structures to emerge in the interim. These include structures regulated by the Solicitors Regulation Authority and will enable firms to employ up to 25% non-lawyer managers.
Full Alternative Business Structures will go further still. By opening up opportunities to access external investment, the Act also facilitates the expansion of firms and investment in large-scale projects -IT is just one particular example, but the opportunities extend far beyond that.
Firms will be able to reward non-legal staff in the same way as they reward lawyers, making it easier to attract high quality experts to take businesses forward. This will mean the firms of the future could have partners that are finance or marketing directors, driving up the quality, and I hope the standards of service for the consumer.
These proposals are facilitative rather than prescriptive. The drive for reform will need to come from the legal profession itself. But it provides a radical opportunity for the profession to put itself on a more competitive footing. It will I hope ensure that not only consumers have access to good quality and fairly priced legal services but that the profession is equipped to adapt as it thinks best to meet the needs of the market.
Diversity
The second area I want to discuss is one where I believe the legal profession has the opportunity to lead the way for the wider professional sector.
Diversity is an issue where I am sure we all agree. There is no place for discrimination in a profession with the core value of defending the rule of law.
But whilst we can agree on this idea, there sadly remains not just a perception but a reality that the legal system is not as diverse as it could be.
A report in January by the Department for Communities and Local Government revealed that the 'homogenous socio-demographic profile of judges' was one of the main reasons those from BME [Black and Minority Ethnic] backgrounds expected to be discriminated against by our courts.
My concern is that such an expectation, however false it is, exists at all. We have the finest judiciary in the world, universally committed to the rule of law and fairness. Instances of actual discrimination are rare indeed and brook no tolerance from the Lord Chief Justice or me. But if the public is to have confidence in the justice system, it needs to see its own background reflected in the judiciary. And high quality lawyers, from diverse backgrounds at every level of the profession will be key to achieving this. At a more fundamental level diversity is even more important. For we must never forget that to a significant extent the public define their view of our legal system by those who promote it.
In addition to the moral argument there is also a very strong business case for diversity. An environment where differences are respected will support better staff retention. It makes sense to encourage the most talented people to not only join but to stay with your firm. A firm can only ever be as good as the staff it employs.
Statistics bring the current situation into sharp relief. It is encouraging that in the last ten years the number of women holding practising certificates has increased by 100%. But whilst presently women make up 60% of admissions to the Law Society, only 23% are partners in private law firms. And worryingly those from a BME background account for only 9% of the total number of solicitors in private practice.
A similar picture emerges at the Bar. 30% of the practising Bar are female, but women make up less than 10% of QCs. And only 4% of QCs are from a minority ethnic background.
I know there has been some improvement in recent years but we cannot be satisfied with allowing the current situation to continue. And nor it seems are consumers. Clients are looking more and more at how the profession treats it staff and partners. Barclays Legal, for example, when procuring legal services, ask the firms with whom they work for their diversity policies and statistics as a matter of course. Diversity is something firms can no longer ignore if they want to deliver not just good legal services, but world class services which meet today's expectations.
The large investment banks and audit companies take diversity very seriously, as do other professions including doctors. I want UK law firms to be the best. Not only because it gives the sector greater moral credibility but because the greater the pool from which talent can be drawn, the greater the level of quality available.
I know the Law Society is committed to increasing diversity and is working hard on its Diversity Charter, a scheme which encourages FTSE 100 firms to monitor the ethnic composition of law firms tendering for contracts. Some individual law firms are beginning to publish their diversity policies and data on the internet; and many of the larger firms are employing staff to consider the diversity issues within their firms.
It remains vital for law firms to recruit and retain the most talented individuals, regardless of ethnicity, gender, disability or sexual orientation. I want the UK's law firms to be the most admired and sought after in an increasingly competitive international market.
Legal Aid
The final area I want to touch upon this evening is legal aid. It is an emotive issue. I am all too aware that in recent years there has been a great deal of dialogue, debate and at times anger over the reforms we have proposed. But we have now reached a crossroads where we have the opportunity to move forward together. I am hopeful that we will shortly be able to come to an agreement which is to everyone's benefit and which provides firms with a period of certainty and stability in order to plan for the future.
Underpinning our reforms has been the principle that the public is right to expect value for money from every part of public service. Legal aid should be no different. That is why we have taken steps to ensure that maximum value is obtained and resources are directed to those who need them most. Our reforms are designed to create a more efficient, more competitive environment which will deliver better outcomes in the longer term for both consumers and providers of legal services.
Legal aid is integral to the principles of social justice which have underpinned all postwar Labour Governments. We established this system with our other great postwar reforms including the NHS. Like the NHS, it is an important part of the welfare state ensuring there is access to justice for all - not a select few. We are committed to making sure that the most vulnerable and most in need are protected. That commitment is borne out by the funds we have made available. Our legal aid system is the best funded in the world. We spend £38 per head of population compared to between £3 and £4 in France and Germany. Even countries with a legal system more like ours spend less; for example, both New Zealand and the Republic of Ireland only spend around £8 per head.
Legal aid has been one of the fastest growing areas of public sector spending over the last 25 years. Spending has increased from £522 million in 1982 (in today's prices) to around £2 billion today. It has grown faster than any other comparable public service; faster than social services, faster than education, faster than health. In fact it has grown at nearly twice the rate of the number of practicing solicitors and barristers and spending today is equal to what we spend on the prison system. Such unprecedented growth could not continue unabated. And our legal aid reforms ensure we will still be helping those in genuine need in the years ahead. We cannot only think about this year or next, we must think ahead five, ten, twenty years into the future. We must be responsible and ensure legal aid has a sustainable future.
The reforms we are pursuing are proportionate and necessary. And I recognise that getting the best deal for all parties is a shared problem for the Government and the profession. I am keen that we sort it out together.
Conclusion
Providing help to those in need has long been an important part of the value lawyers provide to society. It shows the profession at its very best, giving up time and expertise to help others. The scale of contribution by solicitors to pro bono is immense.
But it is not just through pro bono work where lawyers can have a positive impact on the lives of our communities. There are countless opportunities where lawyers can bring their skill and experience and be of real benefit, particularly with regard to the criminal justice system. And in this vein can I make a particular plea and encourage more lawyers to join their Local Criminal Justice Boards. These Boards play a pivotal role in ensuring that the justice system works for the local community, and I know lawyers can bring valuable insight and new ideas to discussions of how the system could work better. Increased involvement has the potential to make a real difference to the effectiveness of our criminal justice system, and to the communities in which we live and work.
The profession is world renowned, like our justice system, for its quality, probity and fairness. We need a profession which can lead on the world stage but that remains committed to its core principles of justice, integrity, independence, acting in the best interests of the clients and providing a high standard of service.
We have a fine profession and an excellent legal system.
One great principle of English law will I hope remain for a long time to come - that is 'the undoubted quality and integrity of those who practice it'.
The campaign will I hope serve to further enhance this reputation.
Thank you.