Kevin O'Higgins Solicitors

'Do I accept that legal costs are too high? Absolutely not.'

Monday, 25 November, 2013
The Irish Times
by Gordon Deegan

“Survival” is the main challenge facing many solicitor practices across the country today. That is the stark message delivered by the newly-elected president of the Law Society of Ireland John Shaw.

A partner at Ennis law firm Michael Houlihan & Partners, where he has worked since 1984, Mr Shaw admits to “walking on air” since his election this month, but is candid on the many tough challenges facing the legal profession.

In recent weeks troika demands that the Government tackle legal costs have attracted attention, while estimates of €7 million relating to the costs of the recent Lissadell right-of-way case only served to underpin the troika’s concerns.

However, in his first interview since becoming president, Mr Shaw concedes that the issue of legal costs is a very difficult one because of the public perception around costs.

“If you take the Lissadell case, the public perception is that the costs are too high, but if you ask for the best in any profession and if you go into something on the basis of ‘I want to win at all costs’, then you are going to pay for that, and nobody in trouble ever asks for a cheap lawyer, they always want the best,” he says.

“It is not appropriate to take just the pinnacle of costs in the stellar cases and who gets paid that.

“Ronaldo gets paid far more than the guy in the League of Ireland gets paid and that is the gap you are talking about. You have to look across the board at costs to find a true picture.”

Mr Shaw points out that the Law Society now has a dedicated unit to deal with rising unemployment amongst solicitors, stating that there are currently 1,000 solicitors out of work.

“The ordinary punter, if he or she shops around, cannot get legal costs any cheaper than they are now,” he says. “In Ennis alone four legal firms have closed in the last 15 months.”

The Dundalk native says the market dictates legal fees. “Do I accept that legal costs are too high? Absolutely not.”

He goes on: “I don’t know where the troika is getting their information from on legal costs, but they don’t need to go any further than the Government’s own public procurement process; that has seen a reduction in the value of public contracts of over 50 per cent from what they were five years ago. We know that here at the firm because we have bid 50 per cent less than before and not got the jobs.

“So instead of making bland statements that legal costs are high, the troika should readily be able to identify the true fall in bids and contracts.”

He adds: “If the troika had asked me I would have baldly told them that in such a cut-throat market there is absolutely no way that solicitors can overcharge.”

Mr Shaw argues that criminal legal aid fees “have been reduced to a point where it is extremely difficult for legal aid practitioners to continue as a viable practice solely on legal aid”.

In an interview in the boardroom of Michael Houlihan & Partners, Mr Shaw points out that the top legal firms in Dublin are doing well “but the rural practitioner in particular is finding it extremely hard to survive”.

He says the bottom has fallen out of the three mainstays of rural practice – conveyancing, family law and probate.

“How anyone can suggest that when solicitors are attempting to survive, that there isn’t competition in the market, beats me.”

Mr Shaw believes that with practices closing and the traditional model of providing legal services now under threat, solicitors’ offices will have to find new areas of work.

Another issue destined to loom large during Mr Shaw’s year in office is the Government’s delayed Legal Services Regulation Bill.

One of the provisions of the Bill is to remove the handling of complaints from the Law Society, and Mr Shaw is well placed to comment on the current complaints machinery in the Law Society having worked in the division for six years and chaired it for two.

He has also chaired a task force into the future of the Law Society, and says that “the handling of complaints can’t be improved on what is there currently”.

On the handling of ex-solicitor Thomas Byrne, Mr Shaw says that the Law Society was not found wanting and Mr Byrne was dealt with and struck off within one year of the Law Society commencing its complaints procedure.

“I don’t think the Government has firmly grasped what they are taking on here,” he says.

“There is a big problem in terms of the competency and experience of staff in the new agency. There will be a huge learning curve.”

He adds: “The proposals are not currently framed. We are operating in a vacuum as to whether it will be handled by paperwork or if voluntary solicitors will be taking part – the big problem is that we don’t know what is coming.”

The Law Society currently employs 20 directly in dealing with complaints, and Mr Shaw says that their future has been in limbo over the past two years over the Government’s failure to advance the Bill.

He says that the number of complaints received each year, compared to the number of legal transactions taking place per year, “is miniscule”.

“The vast majority of solicitors are compliant, and the vast majority who do receive a complaint throw their hands up and say ‘sorry, I didn’t realise I was doing it and I won’t do it again’.”

However, Mr Shaw says the establishment of the new complaints authority will facilitate a shift in how the Law Society works, making it more of a representative body than a regulatory one.

Earlier this year the council of the Law Society stated that “the pay levels and benefits packages of the director general, senior management and other executive roles are market competitive with appropriate comparators” after a report commissioned by the Law Society found that “the current governance structure and process at the Law Society are working well”.

The report does not reveal how much the top earners receive and the only individual remuneration revealed in the Law Society’s annual report is that of the president, who receives €110,000 for the year.

Is the amount justified?

“I don’t see how you could do it without it,” Mr Shaw replies.

“We are using resources internally at the firm here to cope. I will be here for three days a week and some times it could work out less so how do you explain to any partnership that you are going to drop out income in excess of that for one year and you are not going to be compensated at all for it.

It is a huge ask for anyone to do it. “Does it fully compensate? I won’t know until the end of the year, but I don’t think it will.

“It is not in any way excessive. When you look at the rationale behind it, it is fully explained.”