Legal costs used to be based upon hours but this does not provide an incentive for lawyers to be time-efficient. Costs escalated. Managing legal costs involved squeezing down the scale of the work or the hourly rate of pay. Hence, purchasers of legal services shifted to alternative remuneration models with contracts for fixed or formula-based fees.
One of the enabling factors for this shift has been the availability of legal cost databases. Using statistical techniques, thousands of individual legal transactions can be summarised into a formula. Packets of work are identified: a law case is assigned standard amount of time. If the volume of cases is large enough then a “swings and roundabouts” argument can be made. Losses on one case can be made up by gains on another case. This is an economy of scale and leading to the demise of smaller legal practices.
Packetisation is suitable for transactional activities such as conveyancing. However, when it extends into the criminal justice system there is disquiet. As crime, and expenditure on crime has risen, publicly funded lawyers have to work within tighter case budgets. The UK already spends more per capita on criminal defence than any other country in the world and there is no political appetite to increase expenditure. The scope of criminal legal aid has been progressively reduced. Soon those facing jury trials will be subject to a means test.
Quality inevitably suffers when the time spent per case is limited. Less time is spent with the client. Elaborate case preparation is precluded. Clients may feel pressured to accept a solution that they do not really want. The delivery of justice is changing to be more affordable. The question is whether this changes the nature of justice – a question to which I will return.
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