The Impact of the Recession Upon the Legal Profession

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One

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I know that there is a recession on, and obviously there is not as much conveyancing work available now compared to the boom times. However I was talking to a solicitor last night that is based in a rural practice. The firm that employs that solicitor employed a total of six solicitors for years, and employed those six solicitors until this year. Now the firm only employs two solicitors.

I was a little shocked by the number of solicitors made redundant there. Is this happening right throughout the legal profession, or is this an isolated unusual case that is not a reflection upon the rest of the profession?
 
There was an Irish Times article on this a few weeks ago. Seems it's a pretty wide spread issue across the profession.

However, it's indicative of how many professions were falsely created by the "eggs in one basket" economy of the property boom. While it's sad to see so many jobs go, with just a population of 4 million, you have to wonder how many we actually needed (in all the economies reliant on property) and whether we're just seeing some kind of correction and de-frothing back to a more sustainable level of certain professions.
 
This is how a solicitor described it to me in an email recently

I really don't know where to start to be honest, but what's actually going on in this profession at the moment is galling. I'm on Jobseeker's Allowance; my practice and fee income has collapsed; AIB is calling in my overdraft facilities because solicitor's practices are no longer viewed by credit departments as "viable businesses"; I'm in danger of losing my home; the Law Society are reporting me to the Disciplinary Tribunal for not filing an accountant's report, the only reason being is because I don't have the money to pay an accountant; I face another prosecution from the Society because I won't be able to purchase run off insurance cover at a cost of 40,000 Euro in December in compliance with the legislation.

So that's my life at the moment, and truly I cannot wait to get out of this monumental train wreck of a profession. I'm telling this story to anyone who contacts me about the profession, as the truth of what's actually going on must be told. I cannot stick it a moment longer, and all young people considering entering it should run for the hills as fast as possible.

Sorry to have to tell it like it is!!!
 
Brendan said:
I won't be able to purchase run off insurance cover at a cost of 40,000 Euro in December in compliance with the legislation.
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I heard this too, that insurance costs were extremely expensive that many can't afford them.
 
The recession is having a big impact on the legal profession and not only because a lot of practitioners practiced in the area of conveyancing.

For example, in the area of family law more and more people are eligible for legal aid which means there are less clients attending private practitioners. Also it seems people are postponing dealing with their separation because of the recession, the fact they have less money and they know the value of their family home has fallen etc.
 
I've heard that some can't even get insurance which is very scary. Have to say however that it seems there is hardly a week goes by in which there isn't a solicitor in the papers for dodgy dealing so it's understandable

Many solicitors built up their practises in recent years on conveynacing, frankly, some don't know how to do anything else. Those will go out of business. I do think many of the longer established firms will survive albeit on a scaled back basis as they have the long term and more varied customer base

It's simple economics, supply and demand, we don't need as many of them any more
 
Unfortunately this is what happens when we think we can found an economy on people buying and selling houses to each other.
 

That addresses my query fairly directly I must say! I am stunned to hear this (and of course I feel very sorry for the person who is in that much bother). Is this really caused principally by the decrease in conveyancing work? Was much of the legal profession over reliant upon conveyancing?
 
missdaisy said:
....in the area of family law more and more people are eligible for legal aid ........
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Why are there more people eligible for legal aid? Is it because they may have lost their jobs, therefore they had a decrease in income, thus entitling them to legal aid?
 

Have reason to come in contact with many Solicitors - some would say their business is down by c. 80% (those that were particularly exposed to conveyancing - either residential or commercial). To add insult to injury many of them have invested in property themselves and are taking a hit on that side too.

I know some have little sympathy for them as a profession - but at the end of the day many of them have families the same as the rest of us, and have fallen from a height, which can't be easy...
 
I gather the insurance for conveyancing has gone through the roof, in large part due to Lynn et al. It's not so bad for non-conveyancing practices.

At the moment, solicitors seem to be desperate to get in whatever money they can, which is an indication of how the profession has fallen in the last while.

Another huge shakeout is going to have to happen in the Bar - in the eighties there were about 400 barristers in Ireland, now there are over 1,400 in the Dublin Bar alone. Unless that changes it's going to become a hobby profession for wealthy people.
 

Is that not what it is now?

Joking aside, we have far too many lawyers in the country so there's going to be some very painful changes over the next few years.

Wait 'till the Architects start one of these threads!
 
While the property collapse is a major issue maybe the PIAB also has an effect. Compo claims were all the rage some time ago and seem to have died down recently.
 
In addition to what One and Brendan has posted (business decimated, practices reducing drastically and PI going up dramatically) a lot of practices are finding it difficult to get in fees even where there is business as apparently no one has any money.
 
There seems to be a widespread view on this thread that there may be too many solicitors....
Is it regulated, can the law soc (or whatever the professional organisation is) limit the number of people who qualify ? If so, are they going to make it harder to qualify to reduce numbers ?

Does anybody have any stats of how many solicitors we have per capita, and how it compares with other developed economies ?

Also does anybody know how big the legal industry is in monetary terms, like how big is the cake ?

I dont think the legal profession should despair, they should realise that the economic downturn effects everybody. A drop in economic activity means less money for everybody, no profession is immune, apart from say accountants involved in liquidations and doctors who specialise in dealing with depression.
 
Hi Louis

They used to limit intake but this was decided to be anti-competitive a few years ago.

So now there is a vast oversupply.

You are right about the economy going in cycles, but we will need one gigantic economic boom to employ all the solicitors we have.

It's probably no harm. I suspect that we have too many solicitors and barristers and there needs to be a massive rationalisation of the legal profession.

In trying to recover an €8k debt recently, I had to have a solicitor and a barrister. I have successfully got €150k compensation from the Financial Services Ombudsman without any legal assistance. I have represented myself in front of the Labour Relations Commission. But the system is too complex for chasing a commercial debt. It needs to be simplified and we will need even fewer solicitors.

Likewise our property registration process should be changed so that people can buy and sell their property without legal assistance, if they want to.

Brendan
 
I've just been reading the above and I'd like to respond to a couple of points outlined:

I'm a 29 year old Solicitor who up until the beginning of 2009 was employed in a large provincial practice. I, along with two other solicitors and fifteen members of staff, were selected for redundancy on a last in, first out criteria. The reasons given for our redundancy was the major decline in conveyancing work which, as rightly pointed out, was the major income generating work for years in most practices. This work obviously saw many solicitors become very wealthy over a short space of time, with most equity partners in substantial rural firms drawing down on between 150,000-250,000 (Obviously these fees would have been higher in Dublin city firms, but my knowledge on this would purely be anecdotal and at times, quite speculative). As Louis Cribben points out, the recession affects everybody. Thus, even if your business was not derived mainly from commercial property transactions, the truth is the general loss of income and capital, for both individuals and companies, means those individuals and companies are less likely to want to engage in legal work, unless they absolutely have to. This is especially the case in Litigation as the 'c word' (costs) looms a little larger now (as if that was still possible). Costs follow the event, meaning that whoever loses the case will generally have to pay the costs of the winning side, in addition to their own legal costs. This is very daunting and scary position for any client, either plaintiff or defendant to be in, even where that client's case seems almost watertight as the failure to win could see a catastrophic impact on your client's finances. Therefore, in a continuing effort to offset the possibility of being lumbered with massive legal costs, settlements are still very much in fashion (unless you're an insurance firm, to which I understand they are more likely to contest matters than before, as they need to recoup monies as best as possible. In other words, they're prepared to gamble more in court that you're responsible for the accident or that the level of damages you're looking for will be seen as excessive.) Obviously, a settlement would require the paying of legal fees, however, these legal fees would be much less than if the matter was to advance to full hearing and an award of costs being made in favour of one party or another. Not to get too bogged down here, I'm using the issue of litigation/costs/settlements as another example of the reduction of fees due to the economy in an area other than conveyancing.

What this all means for the profession is massive redundancies and I think the current figure is 800 unemployed solicitors in this country out of about 10,000 plus members of the profession. The redundancies have mainly been concentrated on junior members of the profession, much like myself, who have between 0-3 years post qualification experience. If they are not made redundant, then they are quite likely on a 3 day week or at the very least, there salary has been reduced. Very few have remained unscathed from this mess. The options open to us now are the same as for many others; emigrate, continue to looking for work, set up on your own or do something different altogether. I think there is no set answer on what my colleagues should do next. I think it's a very personal decision which encompasses how they have viewed their profession up to this point, their experiences, and wants in life etc. Many are already fed up with the role, some are too frustrated on having spent so much time getting here for no jobs to be available that they wish to have nothing more to do with the legal world and are happy to leave it behind them. Personally, I have a deep appreciation for our work and for our role in society and despite the public perception I think there are many solicitors who see clients as people who need assistance and not merely as the next pay cheque. Obviously we need to be paid for our services in order to survive, but I personally wouldn't have that as my only motivation for working in this area. With that in mind, I hope to open my own practice, now that the insurance quotes for small one-man shows are not as prohibitive as initially thought.

Before I finish this very long post (apologies) I just wanted to respond to Brendan. I understand your desire to be able to deal with matters without the assistance of a solicitor. No doubt you are an educated individual, able to know where to look for information on a legal issue and to apply to whatever set of facts. I also agree that individuals should be able to represent themselves in a court of law or tribunal should they wish to do so. However, your mention the property registration business and how you would like to see it opened up to lay people. I have to disagree with you there. As a friend once said to me 'They want to let everyone do conveyancing. Why shouldn't I be allowed to open up a dentistry practice and say I want to carry out root canals? I have no experience in it, but what's the difference between that and conveyancing. They're both skills that you acquire through experience and work and are specific to each profession. Why should that be taken away from us?'
 

Good post but I think your analogy is a bit off. I think the example of someone building their own home would be a better one. They don’t have to employ an architect or a professional builder if they don’t want to. They simply have to make sure that what they do conforms to specific standards.
 
What I think you're really saying is that the limit for the District Court should be raised. Your claim exceeded €6,300 odd allowed in the District Court and you were required to be represented at Circuit Court level or above, instead of being able to take the case yourself.

It doesn't logically follow that more solicitors is a bad thing.
What an oversupply should do is lower the price of doing the job as competition for business kicks in.
However the baseline costs for doing business as a solicitor are still too high, based on the comments posted above referring to €40,000. That's an astonishing figure, and its either a massive over-charging based on occassional Michael Lynn-type occurrences or there are more solicitors being sued routinely than is being reported in the Press.

Likewise our property registration process should be changed so that people can buy and sell their property without legal assistance, if they want to.
Brendan
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As another poster has noted, you personally might be competent to represent yourself in front of a quasi-legal or legal forum. Most people are not.
You have a logical mind, well sorted in terms of logical argument and presentation of facts, honed by years of moderation here. Most people do not.
You may have so much experience in terms of conveyancing that you will not make the kind of errors that even solicitors fall prey to. I am not so self-assured.

I say this as somone who has certified hundreds of apartments over the years, sworn many Declarations of Identity, marked up and signed off on many Title and Registry Maps.
I'm the one who checks that the folio names and numbers cited in the Declarations are correctly called up just before they are signed and sealed.
I am relatively competent at what I do - or, at least, I have yet to have a sworn document returned by any solicitor for correction.


I have often discovered and corrected typos and transpositional errors in citing folios, but I am not competent to perform an in-depth check on old title documents, for example.
I would certainly want at least a year or two working in a solicitor's office before I was let near a detailed search for surviving relatives, for example.
That's just my opinion, but I think you'll find that most qualified professionals will share it, whatever profession they are in.

This kind of attitude is not limited to the professions or professional protectionism.
Anyone who's learnt a skill or a trade knows the pitfalls and mistakes made on the way.
Its the basic dictum of the least skilled tradesman to the most bright-eyed general operative on the building site:

"Stick to what you're good at".

FWIW

ONQ.
 
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