It’s been a bruising few months but the ever-ebullient Desmond Hudson was packing up his desk last week in good form. He was not forced out as chief executive of the Law Society, he insists; and if there are regrets, they are few. “Part of me is demob happy at the idea of not having that ping ping of emails in the inbox. That is quite attractive. Then I think — what am I going to do?”
Hudson, himself a solicitor, is something of a bogeyman to some lawyers, chiefly over his “deal” with ministers on criminal legal aid. Yet the flak has not changed his positive views of his profession. “What never fails to impress me is the quality and calibre of solicitors and the passion that they have for clients and their causes.”
In his eight years heading the solicitors’ professional body Hudson has seen radical changes: the Legal Services Act; legal aid cuts, and he has worked with a new regulatory regime. “The landscape has changed very markedly and traumatically — it’s too soon to say whether for better or worse. Many people are seeking to operate in a space previously the preserve of solicitors — it is a very, very busy part of the street now.”
If he does not predict the demise of the high street solicitor, firms will have to provide their services in different ways to meet consumer need: “only those able to compete and able to satisfy service expectation as well as being competent lawyers . . . those are the ones who will survive and prosper.”
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In particular he is gloomy about the future for legal aid lawyers. “The number of firms who turned over less than £200,000 last year was less than 2,000. I don’t see how firms on that scale can survive. So you will see significant changes in terms of their shape.”
Hudson’s so-called deal with ministers on criminal legal aid prompted a vote of no-confidence, but he and then president Nicholas Fluck resisted calls to go. The deal, he insists, was taken and approved by the council and was in the “best interests of the members”.
Yet Hudson concedes he could have handled things differently. “I don’t have regrets about the analysis or rationale for what we did. But if I had my time again, in the way we sought to communicate and share those issues, yes, clearly I could’ve done that better and would have liked to have done that better.”
Should he have kept lawyers more informed, been more transparent? That idea is “naive nonsense”, he says. “How on earth can you conduct sensitive, difficult negotiations with a member of the cabinet and his team and give a running commentary to everyone in the profession? It’s just not practicable.”
Yet he admits: “clearly we did not persuade a significant proportion of criminal legal aid practitioners to the sense or wisdom of arguments that the Law Society advanced and if I could have communicated, presented that case better, I would like to have done.”
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It would be wrong for legal aid to be Hudson’s epitaph. He has boosted the society’s profit-making services, creating £7 million in surpluses this year; invested thousands (now worth millions) in activities such as Riliance, a compliance software application; saved millions in ending the staff final salary pension scheme while achieving “an honourable settlement” for members; and set up a joint venture with Miller Insurance to provide professional cover for solicitors, commission-free.
His has been a tough business style that has led to cuts of up to 25 per cent in staff levels to some 300, although new staff are now being recruited to growing services. But he rejects the “ruthless axeman” label as simplistic: “I think people respect the way I have run the staff and the organisation and people would say that where changes were needed, it was done in a humane and sensitive way. But yes, I do confront issues that need to be dealt with.”
If anything, Hudson regrets not doing more, sooner. The society was a “brittle” instititution on his arrival and he had to tread slowly. “If I had my time again I’d have been more radical and made those changes earlier — staffing cuts, the type of activities we do, investments — to make it more sustainable.”
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Hudson’s own pay package of £400,000 and those of senior staff have been described as anything but lean. But, he argues, pay must be competitive in the market. And there has been reform: he axed staff annual increments.
In January Catherine Dixon, chief executive of the NHS Litigation Authority, takes over. What challenges will she face? The regulatory framework, he says, is inefficient and costs solicitors up to £20 million a year. “I am not happy that we have an über-regulator (Legal Services Board), whose chairman is appointed by the government. As for the Solicitors Regulatory Authority, it is too “interventionist”, with too wide an agenda. “I’m not suggesting we go back to chaps regulating chaps behind closed doors, but far more could be done by the profession.”
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Hudson, 58, is to be the new lay chairman of the Institute of Actuaries. Beyond that he seeks other work. “I don’t want to stop.” As he goes, his feelings are mixed: “I’ve worked with an excellent set of people including the volunteers on committees and am very proud of the Society and staff. It’s been a real privilege to have this job.”
Hudson on Hudson
Des Hudson, the chief executive of the Law Society, leaves his post this week after eight years. Below are his thoughts on his time heading the professional body for 150,000 solicitors in England and Wales, on solicitors and on the profession.
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On solicitors:
“Something I did not know as well as I do now is how difficult and challenging running a solicitors’ firm is — the demands in terms of admin, regulation, client expectations, the way the market is changing — it is sobering to see how difficult that struggle is for so many of our members.”
On the changing legal services market:
“We are seeing shifting plates. I don’t think we will see any signs of growth rate ending but the shape [of the profession] will be very different. The expectations of clients have changed remarkably in line with trends in the wider economy; they are more demanding and the practice of law has become more complex. Running a law firm on the high street, providing a service to clients, is very difficult.”
“I don’t think the need for legal services or skilled lawyers is going to disappear but the way those services are being met is changing. I think we willl have a smaller high street: my sense is that the needs of people, justifying the existence of the high street practitioner, are not going to disappear but the numbers of people seeking to service those needs (lawyers) and the terms on which those needs are being met, and the prices being paid for those services... are all in a state of flux and only those able to compete and able to satisfy service expectation as well as being competent lawyers — those are the ones who will survive and prosper.”
On publicly funded lawyers:
“It is very, very difficult to identify a rationale by which the publicly funded practitioner can exist — it is getting harder and harder by the month and 2013 saw the first impact of Laspo (The Legal Aid, Sentencing and Punishment of Offenders Act 2012) in civil and the changes have still got some way to run. So it is massively difficult for those people.”
On corporate lawyers:
“The type of lawyer is changing and types of law being done is changing and what is driving that growth in the total numbers on the roll is the corporate demand for legal services — that is, by and large, where the growth is. That is what is driving the market and the importance of this jurisdiction — in particular London in international markets grows ever more significant.”
On the criminal legal aid negotiations:
“No, I don’t have regrets. I do understand the depth of feeling on that issue. It is worth noting that we consulted very widely with our members and they had massively divergent views. There was no consistency. I think that the alternative proposition that we put, around a single tier structure, that anyone who met quality criteria should get a legal aid contract, that would have been the way to deal with it, with rationalisation of legal aid provision.”
“I am very proud of that proposition that the Law Society created and put forward. I think it would have been a better proposition but when faced with the elected government of the day, who says — thank you very much, we have listened to that and we are now making a public policy position, what do you do — what are the practical, pragmatic steps you take on behalf of your members?”
“We had a choice: we could have taken the easy option, standing on the barricades, having banners and badges printed, and shouted at the government, but I do not think that would have served the interests of solicitors at all.”
“I look back on my strategy and the decision to seek some form of agreement with the government and reflect on the fact that nobody gets elected by telling the electorate the bad news before the election. We chose to tell our members how we saw the reality, one [example] was that crime in this country and across the Western world has been falling consistently and in this country for more than a decade. There are more lawyers, whether barristers or solicitors, chasing fewer cases and a reduced legal aid budget.
“Post austerity, whatever the political colour of the government after the next election, no one is going to be spending more money on legal aid.”
“The choice we had to make was to confront those economic realities, those truths, and share them with our members. That led to our decision around the ‘deal’ and the special general meeting. It was never going to be popular or palatable but what was the honourable and right thing to do? It would have been much easier just to oppose the changes.”
On his decision to retire:
“I took the decision in 2013 that I was going to retire: I had originally planned to retire around the AGM although I stayed a bit longer. I took the decision (to retire) with the outgoing president and deputy. I did announce my decision earlier than intended but the timetable was agreed a year or more before — it was nothing to do with the criminal legal aid negotiations.”
On the Law Society:
“I believe I have made enormous changes to the way the society operates, its financial stability. The key is — this is not something where you need to optimise or maximise profit, because that profit comes from the spending of our members. So it needs to be financially sound but for the business to be run as lean as possible, so as to leave as much as possible in the members’ hands.”
“When I arrived, the Law Society was a brittle organisation and I needed to move at a moderate pace — brittle in the sense that it was not used to changing, was not part of the wider world where change was automatic, and that judgment I was probably a bit too timid on.”
“It has served the role it had for 150 years and that role was changing, with the passing of the Legal Services Act, so its role needed to change.”
On his management style:
“I don’t think I have a rough, tough management style but I do think I confront issues that need to be dealt with. Senior management is not necessarily about being popular — someone has to make the choices, someone has to pick the team.”
“I don’t deny there has been significant change in the people here, but I don’t accept that was done in a ruthless or unpleasant way. I have changed things and have been rigorous and would say that that had to be done — and there is more to be done.”
On funding the Law Society:
“I think people would choose to pay if it was voluntary — some would choose not. What proportion — who knows? But I think such an approach would leave the entire profession worse off. It is very easy to way: what has the Law Society ever done for me? This year, for example, if you look at the interventions we have made in court cases on behalf of civil society and in particular the profession; the money put into trying to protect access to justice and the rule of law; the information and practice notes and guidance we put out to our members — these are all things that are easy to overlook, very difficult to value, but would be missed if not there.”
On regulation and the Solicitors Regulation Authority:
“We have to think how to plan for the future. My sense is that the SRA is very different, strategically, from any other comparable legal regime anywhere in the common law world. I think the money and resources spent by them are much more. I think they are a much more interventionist organisation, a much bigger organisation... and have set themselves an agenda that is much wider than comparable common law regulators.
“All the compliance, etc, raises the question: beyond being sure that the money solicitors have in client accounts is protected, what is the public interest in terms of whether firm X’s business plan fails or succeeds? I would like to see how we can simplify regulation and make the regulatory structures proportionate and effective. No one is saying we want a free-for-all but it is really important to have an agile, well-regulated profession and a structure that works for business activity and services the needs of the community that the profession supports.”
On future challenges:
“We need to look at how we ensure solicitors are trained and educated to ensure the highest standards. As we see ‘alternative business structures’ and changes to the old model of partnership and the hierarchy of firms as the means by which we teach and police ethical standards of behaviour, how do you instil good ethical behaviour?
“My perception is we will see a reduction in levels of protection [through professional indemnity insurance]. There are sound arguments on both sides: it might make legal services cheaper and costs would fall, leading to more new entrants. But it also raises the question — is the relationship changing between the profession and the clients? Are we moving to being an industry? We have the providers, suppliers of services and punters who buy those services. Where is there public benefit, the public policy imperative, in that?”
“Lawyers play a key role in that public benefit that is a key part of the system, the law — a killer app that enables the creation and generation of wealth in this country because, for example, you have a system of contract, of property rights. The fact that you can find lawyers up and down this country to defend you, represent your business, that is a public business.
“But if people can’t access that system — because of its costs — that is a problem. It is clearly not healthy if there are great swathes of society disenfranchised because they can’t pay [legal fees]. And therefore access to justice and what we do about legal aid and making our services available is massive important.”