After a Second Read

Usually at times like this people ring me, knowing I will at least read a document they have not had time to. What they seek is a quick and pithy summary with a few opinionated comments thrown in. Nowadays this place has become a better medium for such communication so here goes.
Lets begin with yesterdays initial response, the key practical development in these proposals are that they are more gradualist and so all firms get something of a breathing space. That said 2009 looms large especially for Criminal practices.
For those who have attended our recent courses on Preferred Supplier (PSS) the proposals are pretty much as we predicted with one major difference – there will, ultimately, be an element of competition (more later). The next three years will therefore be something of a war of attrition with the PSS and the imposition of fixed fees being used quite nakedly to prune firms out of the scheme and create the market conditions for “fewer, larger firms” to develop. Peer Review, again quite explicitly, will be the immediate agent in this process (although the final threshold required is not satisfactorily explained).
The speed of change is faster and more aggressive in the CDS than the CLS. There is a strong feeling of kid gloves being on with the latter. The dawning reality, of a fragile market , has tempered proposals not least because many of the target PSs might just jack it in and do private work instead. This would effectively leave a rump of less good suppliers and the not-for-profit sector to deliver the scheme which is a real and frightening concern. Consequently all family and civil proposals are significantly more tentative with a 2010 or later deadline for the implementation of the competitive element of the scheme. There is also a strong commitment to the Community Legal Advice Centre and Network proposals.
Back to the CDS where the pace of change is swifter, and the focus of proposals more sharply defined. For instance there are suggested, all-inclusive standard fees in the appendices and a worked our example (from my part of the world) of how PACE schemes will be rationalised. Both of these will take place next year along with changes to the Duty Solicitor requirements.
The issue of minimum value contracts etc. is raised in relation to both CDS and CLS suppliers but looks, initially, to be set fairly low (50K in CDS – and that is total fund take). How this will develop is less clear and will probably only come out when the details of the “best value competition” scheme are finalised.
Here the final picture is not entirely clear and a very significant role has been given to the LSC to go away and plan this, which must be a major concern. The three key features will remain quality, volume and cost and the original capacity only auctions have disappeared from the horizon. There will however be a price based bidding process somewhere down the line. In this there is a powerful indication of very wide regional flexibility becoming a central feature of the final scheme. One can take differing views on this – it is clearly essential – however it seem to this writer not sufficiently nailed down at this point to allay fears about transparency. Even though this will end in competition and minimum bids etc. there does however seem to be a “sub contractor” escape hatch for good quality smaller firms.
Obviously the above is only a brief, initial summary – those with more detailed interpretative concerns should use the comments box or give me a ring.
And the opinionated bit?
This seems to me a warmed over mish mash of previously tried or considered approaches. Best Value returns after the BIDCOM (disaster) experiment, there is the reintroduction of “intelligent contract” thinking and Frontier Economics input/output obsessions are reinforced. Fundamentally there is the paradox of the title and the reality. These are sold as “market” reforms however they involve, nay require, significant manipulation of the market in order to arrive at their goal. The fact that the market has not developed in the way Carter thinks it should, and the quoted research might lead one to expect, is not addressed. That fewer, larger firms have not developed to any great extent is due to many factors, not least the underlying rates. Also there is the fact that these are people based businesses. We have visited many hundreds of firms over the last 10 years (and many more in our various previous jobs) and seen practices of a variety of shapes and sizes. Predominantly these are small to medium enterprises whose success, or otherwise, is determined by how good the key players are, or to put it into the language of today, how good the Leadership is. No amount of market tinkering, based on a wish to move to a research grounded notion of a more cost effective, model practice, will change this. I could say more but that will have to do for now.
Finally apologies for this being a rough post I have too little time to go back and polish it.
You opinions will be gratefully received.