No fireworks, but membership costs the burning issue

Published on Sunday 31 May 2009 22:13

IN THE end, the fireworks at the Law Society AGM failed to burn as brightly as expected, with the society's council winning its battle to be granted more time on the issue of membership costs. A convincing victory for its motion amendment means it has until September to bring forward concrete proposals on how it will reduce the fee for the practising certificate.

The tantalising prospect of a "material reduction" to the current 665 levy was enough to secure the support of some of the bigger fish in Scottish law, with Shepherd and Wedderburn, McGrigors and Dundas and Wilson all backing the society's insistence that it be allowed to carry out a thorough review of operations before it could commit to a funding cut.

Despite the quiet confidence of David Flint and his colleagues at MacRoberts as they waged a public fight for proxy votes last week, in the conservative world of Scottish law, the sizeable victory was perhaps not that surprising. Yes, law firms have felt the pinch like never before in the past 12 months, and the prospect of the professional body sharing some of that pain must have been appealing to its critics, but, as all lawyers know, the harsh management decisions many firms have taken over their business direction have not been made in haste.

To ask the Law Society to deal with a seemingly arbitrary 30 per cent cut in its subscription budget, almost overnight, was evidently too much for most solicitors to contemplate.

But after agreeing to the society's request, members of the profession will no doubt pay particularly close attention to the proposals presented before them at the EGM in the autumn.

Ahead of that meeting, one wonders at what level the society will pitch its material reduction and where it will find costs to trim. Set its plans for a reduction too low and the number of members clamouring for deeper cuts will almost inevitably grow. Pitch too high, and service to its members might be at real risk.

What follows the AGM, the society insists, will be a period of consultation with its members, asking them what services they expect from their professional body. And while the bigger firms could easily consider less involvement with their professional body, high street firms, sole practitioners, students and trainees lately cast into the wilderness still rely on the support the society offers.

Assuming it wants to maintain its cash surplus, a reduction of, say, 100 to the certificate will mean a drop in income of more than 1 million, based on the 2008 figures.

With no guarantee that next year's economic picture will be any rosier than at present, it is difficult to see the society shouldering that reduction without serious expenditure being threatened. With certain outgoings based on statutory functions, that will mean a close review of discretionary spending and, presumably, employment costs, given the fact these are, by some distance, its greatest burden.

To mitigate cuts in the short term, perhaps it will consider, as Mr Flint has suggested, releasing some of the 1.23 million in cash reserves it currently holds. That balance was boosted by an 18 per cent hike in the cost of the practising certificate in 2006, and the council and executive may take the view it is time to pay back the generosity of its members on a one-off basis.

That move is unlikely, however, to help it answer its critics' charges of inefficiency, and would simply put off the changes needed to its structure for another year, during which time the pressure from members would grow.

Given that a review of its operations is, the society points out, already ongoing, it would be surprising if it were to rely on that tactic to effect the reduction. How far it is able to use its reserves might also depend on the upkeep bill for Drumsheugh Gardens, after savings made by the suspension of maintenance operations for the office were cited as a reason for the high cash retention this year. Given the indefinite nature of the relocation postponement, the society has said it will need to include maintenance costs next year.

But what of the rebels? Although disappointed that his motion failed, Mr Flint expressed quiet satisfaction that his efforts appear to have put the Law Society's budget on the profession's agenda.

While the accusations of bureaucracy were not enough to convince enough colleagues to back his proposals at such short notice, if the review in September fails to offer real changes to the way the society is run, he is likely to find himself with increasing support.