Crimeline on PCT III

Here is the early view of friend of this site Andrew Keogh from Crimeline.

Make of it what you will!

The paper is quite interesting in that the bid method proposed suffers from non of the complexity of the auction methods in the last one (incidentally the same auction methods used to fix gas prices on the international commodities market).

This is how it works and my two-penneth worth:

Country split into areas

Each area to have X number of “contracts”

No firm can hold more than 1 contract in any one area

A firm can hold contracts in more than one area.

The largest area is a part of London, with 38 contracts. Therefore, in theory, the same 38 firms could hold contracts in all areas (not all of the 38 will of course, or can, as some areas are smaller). This is slightly better than last time where the number was theoretically 8. But I doubt that the minor statistical variation will comfort you.

Now lets take an example area, I will choose home turf of Greater Manchester There, there will be 37 contracts let. I do not now the current number of firms but in 2009 when the last paper was published there were 133, so lets stick with that.

Therefore almost 100 firms go bust. of course they could all go bust as the contracts might just as easily be won by outside firms.

The contract winners get an equal share of the market, so 1/37th of all work. What work? Good question – declining volumes – get the crystal ball out to factor that one in.

In order to create an equal contract size they have taken away client choice. So firms are called by the DSCC in strict rotation. If a punter walks in off the street he must be referred to the DSCC for allocation.

Genius when you think about it.

But what of a firm with say a greater than 1/37th share in Gtr Mcr already – well they lose share.

And of course you cannot grow share, however you cannot lose share either.

Quality? Hmm

The price of the work? Take the current global work value, deduct 17.5% then start your bids at below that. Cheapest bid wins.

Mergers? Why on earth (but lets not go there, we can stop at how on earth?) – think about the how as it is quite interesting.

And for those employed pay particular attention to the agency arrangements – a flexible workforce without rights = cheaper.

TUPE – almost certainly does not apply, but about 5,000 redundant solicitors will bring a class action to find out, so put a million in the litigation kitty when you place your bid, as you will not recover your legal costs even if you win – these horrible litigants are not only your worst enemy but also unemployed and penniless.

You might lose a bid in your home town/city but win elsewhere.

And before you know it the bid cycle will open again.

You do get 250% + extra work of course, and you will structure your business (which may or may not be where it is based now) in a matter of 4 months.

And don’t forget the little bit tucked away at having to sit behind counsel again – don’t forget to cost that transfer of cost from multiple representation to litigator support.

There, a detailed analysis.

Go on Punk, make Grayling’s day. Bid.

But, what next?

Is the Law Society position correct? It may well be I’m afraid.

This week is also a timely reminder of the miners situation all those years ago, in far better financial climes. And no-one hated them. I suspect that we have to take the price hit and organically re-order businesses (as is already happening).

If I am wrong then perhaps we strike (really?) or just ignore it? I don’t now either.

But they are shutting children’s heart units to save less money – think about that.

Those firms (if we take price cut on the chin) need longer lock in contracts for investment.

Despite cuts to advocacy fees some ground can be made up there in my view. The bar must be petrified.

Which leads me to conclude that it is all *&%%*£$*.

I think the difference this time is that it may well all go ahead. It will fail, but I shudder at the consequences that will flow.

Eh, it may be that I am missing something obvious that the more cunning business minded solicitor is seeing, and if so I wish you well – you obviously deserve it.

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