updated on 27 September 2022
In this guide we outline some of the key issues facing the UK legal profession, as well as headline-grabbing cases and mergers – are you in the know?
Lawyers interact with companies, national and local government, institutions and individuals in almost every area of life, so it’s no surprise that wider economic and political issues affecting their clients often have a knock-on effect on their work. Of these, six key issues are currently pressurising the sector and driving profession-wide change in various ways. They can be divided into:
Head to LCN’s Commercial awareness hub to boost your understanding of the factors impacting law firms and their clients.
While the lasting impacts of covid-19 can be felt across the profession, it’s important to take a step back and consider other key issues that have been affecting the legal sector over the past year.
Access to justice is an ongoing concern following years of financial cuts in the legal aid sector. Over the past couple of years, courts have adapted to hearings taking place remotely, or instead being postponed in light of covid-19. Delays to hearings coupled with court closures means that the already overwhelming backlog of cases has been exacerbated and remains a serious issue.
According to the most recent Legal Needs Survey, it’s estimated that 3.6 million people a year in England and Wales “fail to have their legal needs met in resolving a dispute”. In addition, two-thirds of the UK population don’t know how to access legal aid and there are 14 million people living in poverty who are unable to afford it, according to The Access to Justice Foundation.
While covid-19 worsened the existing problem, at the heart of the access to justice issue is funding – or lack thereof. In early 2020 the government proposed to inject an extra £32 to £50 million into criminal legal aid funding, but the Law Society stated that this wouldn’t be enough to alleviate the threat to “the very existence of criminal defence practitioners”. Meanwhile, in late 2021 the criminal legal aid review was published and proposed a minimum increase of 15% in legal aid fees. This was again rejected by the Criminal Bar Association (CBA) who requested a 25% rise instead.
Responding to the ongoing disputes over legal aid funding, criminal barristers initiated strike action starting at the end of June 2022 lasting four weeks. Members of the CBA have been increasing their days of striking by an extra day each week, with plans to stage five-day walkouts every other week if no deal is agreed with the government. This strike action will continue to cause further delays to court hearings.
As of July 2022, there’s a backlog of 58,653 outstanding cases in crown courts, a 42% rise on pre-pandemic levels, according to data revealed by the Ministry of Justice (MoJ).
After the first week of strike action, the MoJ revealed that it plans to fast-track legislation that’ll see barristers receive increased legal aid fees at a faster rate. It confirmed that barristers will receive a 15% fee rise from the end of September 2022, while criminal solicitors will also see a 15% fee rise for their work in police stations, magistrates’ and youth courts. However, the CBA continues to call for a 25% increase to make up for years of underfunding.
It was also recently announced that the MoJ and the government will work together to provide additional support to those navigating the legal system, including:
Clearly action is being taken, but it remains to be seen whether this is enough to reignite the public’s trust in the fairness of the legal system – for both those who use the system, and those who work in it.
As defined by the Law Society, ‘lawtech’ is the term used to “describe technologies that aim to support, supplement or replace traditional methods for delivering legal services, or that improve the way the justice system operates”. It might include implementing document automation, advanced chatbots or smart legal contracts to increase efficiency and productivity, reduce costs, and improve access to legal services for the public, among other benefits.
Read this technology, media and telecommunications Practice Area Profile for insights into the working day of a solicitor in this area. Interested in working at the Bar, read this Practice Area Profile for insights into the working day of a barrister in this area.
While law firms aren’t (yet) overrun with robots, advances in AI and automation will continue to create new revolutionary possibilities, and challenges, for the legal profession over the coming years. More recently, we saw law firms transition to remote working in light of covid-19 to ensure they could continue delivering high-quality services to clients, but ‘lawtech’ is so much more than that.
The Solicitors Regulation Authority’s (SRA) research with the University of Oxford Technology and Innovation in Legal Services looked at “current and potential innovation, and adoption of technology within the legal sector”. The research set out to not only increase understanding of lawtech, but to also identify how the sector can be supported in implementing these changes. “Supporting lawtech and innovation, especially that which improves access to justice for all” is one of the SRA’s three core objectives within its 2020-2023 corporate strategy.
Of the 900 law firms that took part in this research, 87% use video conferencing technology, 66% use cloud storage and 50% use practice management software, with 90% of firms saying that their increased use of technology will continue in a post-covid world. In terms of legal-specific technology, 37% of respondents say they currently use it, while 24% say they plan to use it soon. Of the sector-specific technology, the most common technology include online portals for matter updates, interactive websites to generate legal documents and chatbots or virtual assistants. Meanwhile, improving service quality (72%), improving efficiency (71%), and allowing staff to work more flexibly (44%) were among the main reasons firms cited for using new technologies.
Not all firms are using or implementing these practices, so what’s stopping them? A lack of in-house skills and uncertainty over business benefits are among the reasons. However, one of the biggest barriers is cost, with more than half of firm respondents reporting affordability to be the main obstacle, “or more specifically a lack of spare financial capital to invest in such areas”, according to the SRA’s summary report. Other cited barriers include a need for greater clarity and guidance from the SRA on regulatory issues, such as client confidentiality and data protection requirements.
In addition, according to the research, firms working in employment and family law were less likely to make use of technology compared to those working in conveyancing. Meanwhile, firms established in the past five years and those working with large corporate clients were among the firms most likely to innovate.
Benefits can be seen among firms that have adapted trainee roles to embrace technology. Junior solicitors and trainees have traditionally drafted simple contracts and reviewed documents, but this type of work is becoming increasingly automated.
Now, trainees are more likely to manage the process of referring the initial document review to a third party that does the work at a lower cost, undertaking a secondary review of the document later. It’s likely that trainees will be interacting more with AI in the future. Management skills and an understanding of technology – and how to resolve technical problems – are increasingly important to showcase in both an interview and training contract.
Since the invasion of Ukraine, the UK has imposed a number of sanctions on Russia – the “sanctions regime is aimed at encouraging Russia to cease actions destabilising Ukraine or undermining or threatening the territorial integrity, sovereignty or independence of Ukraine”, according to the UK government. The SRA states that the current financial sanctions restrict “law firms from providing services or access to financial markets, funds or economic resources to listed entities or ships without a licence”. As a result, it’s crucial that law firms remain up to date on these sanctions and their impact on their operations.
Many firms were also quick to review their client lists in response to the conflict, forcing some Russian litigants with cases at London’s High Court to look elsewhere for representation. The SRA has made it clear that firms can choose their clients and said that it’s unlikely to become a regulatory matter: “The general position is that firms can choose who they act for, and can choose not to act for any reason (unless unlawful, for example under equalities legislation)”. As many organisations, including retailers like H&M, revealed plans to stop trading in Russia, so too did law firms. White & Case LLP announced that it would be closing its office in Moscow, while Debevoise & Plimpton LLP, which said it planned to terminate its relationship with Russian clients, also said it intends to close its Moscow office. Allen & Overy LLP, Clifford Chance and Bryan Cave Leighton Paisner are among other firms to confirm plans to stop operating in Russia’s capital. However, many firms are facing ethical dilemmas as they make efforts to break away. It’s worth continuing to follow the impact of the war in Ukraine, not only on the geopolitical landscape of the world, but also on businesses and the economy.
As of 1 January 2021, several changes came into effect impacting solicitors in England and Wales with clients in the EU. According to the Law Society, they’re “now subject to 31 different regulatory regimes, one for each jurisdiction”. With freedom of movement terminated in the EU, new rules have been introduced to control how solicitors can cross the border to each EU member state, European Economic Area (EEA) countries and Switzerland.
Those interested in working in the law should be engaged with Brexit and its impact over the months and years ahead. This will involve analysing its ongoing effect on the business and legal worlds, and more specifically understanding the aspects that could affect your shortlisted firms, their clients and particular practice areas. Britain might now be out of the EU, but the full consequences and impact of Brexit remains to be seen.
Looking inwards, the legal profession is still nowhere near as diverse or as accessible as it should be, although important progress has been (and is being) made.
Of solicitors and partners in England and Wales, around 17% and 16%, respectively, are from an ethnic minority background, according to the SRA’s latest statistics. At firms with 50 or more partners, only 8% are from an ethnic minority background. Meanwhile, at the Bar just over 14% of practising barristers and only 9.6% of Queen’s Counsel (QC) are from ethnic minority backgrounds, according to the Bar Standards Board (BSB), with ethnic minority candidates making up just 19.8% of pupils.
Research by the BSB relating to students enrolled on the Bar Professional Training Course (BPTC) (the old vocational stage of training for the Bar) from 2011/12 to 2019/20, shows that 77% of white candidates with a first-class degree and an ‘outstanding’ BPTC grade secured pupillage, compared with 65% of candidates from an ethnic minority background with the same grades.
In addition, a Bar Council report published in 2021 highlights that on average Black women barristers earn around £19,000 less per annum than their White male counterparts, and Black male barrister salaries are more than £15,000 less than the average White junior barrister. Despite petitions calling for mandatory ethnicity pay gap reporting, the UK’s Commission on Race and Ethnic Disparities is yet to make this a legal requirement.
Women make up just over half of practising solicitors, but only 35% of partners in private practice. According to the Law Society’s analysis of 41 law firms’ gender pay gap reporting from 2017 and 2020, on average women in the largest law firms earn one-fifth less than men. The Law Society’s analysis demonstrates that of the law firms reporting for 2017 and 2020, 28 saw a decrease in mean gender pay gap (based on hourly pay), while 12 experienced an increase and one firm experienced no change. In addition, while a similar number of men and women received bonuses, men received bonuses that were of higher value, with the average gap between bonus value being 39.4% in 2020.
According to the BSB’s Diversity at the Bar report, as of December 2021 women make up 38% of the Bar, with the number of women QCs increasing year on year, from 16.8% to 17.9%. At pupillage level, 56.6% of pupils are women and 43.4% are men.
Another gendered issue is unequal work allocation. The BSB has produced tools to assist chambers in the monitoring of work allocation as part of its equality and diversity rules handbook.
The number of people working in law firms who reported a disability is only 5% – this figure remains the same when looking solely at lawyers in law firms, which, according to the SRA, is still significantly lower than the UK workforce. Just 4% of partners said they have a disability. In firms with 10 to 50 partners, 6% of lawyers reported a disability, while firms with 50+ partners have a lower proportion of disabled lawyers at 4%.
Improving inclusivity and accessibility for disabled lawyers is crucial, and the past few years have proven that agile working practices could be a stepping stone to a more accessible profession. According to the Legally Disabled? survey of 100 disabled lawyers conducted in 2020, 70% of those surveyed said they would prefer to work remotely in the long term due to the many health and wellbeing benefits it offers. However, respondents also warned that “one size does not fit all” and “it should not be assumed that all disabled employees would prefer to work from home”.
Meanwhile, at the Bar, the BSB reported a 3.4% increase from 2020 to 2021 of pupils who have a disability. Including respondents who didn’t provide information, the BSB found that 4% of the Bar, 4.3% of pupils, 4.2% of non-QC barristers and 2% of QCs had reported a disability as of December 2021. These figures demonstrate just how much more work the profession still needs to do to ensure that law firms and chambers are inclusive and accessible for disabled candidates.
Sexual orientation and gender identity
Just 3.5% of lawyers identify as lesbian, gay or bisexual – 2.5% identify as lesbian or gay and 1% are bisexual. This figure drops to 2.3% in firms with one partner, while at larger firms with 10 and 50+ partners, the figure is slightly higher at around 4%. Meanwhile, 2.8% of partners identify as lesbian, gay or bisexual and 8.2% said they prefer not to declare their sexual orientation.
The SRA also highlighted that 1% of solicitors, reported that they had a different gender identity to the one assigned at birth – this is down from 1.9% in 2019. In firms with 50+ partners, 2.4% of lawyers have a gender identity different from their sex registered at birth. The SRA supported the InterLaw Diversity Forum in creating an LGBTQ+ Factsheet that outlines key findings from the 2021 report, including research that demonstrates the negative experiences of LGBTQ+ employees as a result of their sexual orientation; bullying and harassment towards lesbian, gay, bi, trans and non-binary people is evident. According to the SRA, “LGBTQ+ lawyers who are not ‘out’ in the workplace are more likely to leave their job and many are still not comfortable with bringing their full selves to work”.
Meanwhile, while the response rate for the gender identity and sexual orientation categories in the BSB report increased from last year, the response rate for gender identity was still only 44.7% compared with 99.7% for gender. The latest report demonstrates that, excluding those who didn’t provide information, more than 11.5% of pupils, 7.3% of non-KC barristers and 5.7% of KCs identified as either a bisexual, gay man, lesbian or other (not including heterosexual).
It’s clear there remains a lack of diversity within the industry across the various diversity strands, including the ones mentioned above, as well as socio-economic background, religion and belief, caring responsibilities, neurodiversity and age. This is a fundamental issue that must be addressed if the profession aims to attract the best talent and offer the best services. Head to LawCareers.Net’s Diversity hub, sponsored by Gowling WLG (UK) LLP, for regular updates to keep you in the know regarding what law firms, chambers and legal education providers are doing to remove existing barriers and work towards a more diverse and inclusive profession.
Whether you aim to become a solicitor or barrister, your route to qualifying is changing. For aspiring solicitors, in September 2021 the Solicitors Qualifying Exam was introduced and will gradually replace the Legal Practice Course. Meanwhile, budding barristers can now take new, cheaper Bar courses instead of the BPTC.
In 2021, UK law firm mergers dropped to a 10-year low, with only 99 mergers completed (a 7% fall on 2020’s figure), according to a legal update from Hazlewoods. As expected, the slowdown in the number of law firm mergers was blamed on the pandemic, despite some firms experiencing their “best financial results in the last 10 years”.
Some notable recent mergers include:
Non-fungible token (NFT) is one of those phrases that’s somehow already found its way into our day-to-day vocabulary. The popularity of NFTs is constantly growing and the legal implications surrounding them are becoming increasingly important. Business Insider defines an NFT as “a digital asset that links ownership to unique physical or digital items, such as works of art, real estate, music or videos”. It acts as proof of ownership of various types of asset and has its own unique, identifying characteristics. There’s lots to learn about NFTs and how they work, including the ‘minting’ process, which refers to the process of converting a digital file into a blockchain-based NFT. But what legal and regulatory issues should you be aware of when discussing NFTs? Are NFTs recognised as property? How should NFTs be treated when it comes to tax? Do the IP rights attached to the NFT transfer to the NFT owner?
In a recent Commercial Question on LawCareers.Net, Norton Rose Fulbright considers whether NFTs are exempt from IP restrictions placed on tangible goods following director Quentin Tarantino’s decision to auction excerpts from the original handwritten screenplay of Pulp Fiction as NFTs.
Production company Miramax alleged that it actually owns the rights to the film and Tarantino’s screenplay, not Tarantino himself. Norton Rose Fulbright explains that the case “highlights the fact that NFTs, while uniquely intangible, are not exempt from the same intellectual property restrictions placed on traditionally tangible goods”.
Read this Commercial Question for more on this topic.
It’s likely that as more cases arise, the legal and regulatory issues under question will be clarified, so this space is definitely worth watching!
‘What are the unique legal considerations surrounding the growing popularity of NFTs?’ – read this Commercial Question from White & Case trainee Holly Cook.
Warmer weather, grass fires and rising sea levels are among some of the issues caused by climate change. It’s a conversation that’s been ongoing for years now, but what are the recent legal developments you should be aware of?
Net zero refers to the “cutting of greenhouse gas emissions to as close to zero as possible, with any remaining emissions re-absorbed from the atmosphere, by oceans and forests for instance”, according to the United Nations. To get to net zero requires a “complete transformation of how we produce, consume, and move about”.
In a recent landmark ruling, the High Court ordered the government to outline its specific plans for achieving its net-zero emission targets, following allegations from environment groups, including Friends of the Earth and the Good Law Project, that the government had failed to include its exact policies on reaching these targets. Mr Justice Holgate states that the government didn’t meet its obligations under the Climate Change Act 2008, ordering the Business, Energy and Industrial Strategy to prepare a report by 2023 explaining how the policies in the government’s net-zero strategy will work towards reducing emissions.
Brexit trade deals
Issues to do with the UK’s exit from the EU continue. Most notably in recent months is the legal action brought against the UK by the EU for its enforcement of post-Brexit trading rules in Northern Ireland. The UK has been accused of failing to apply customs and tax rules that are part of the 2019 exit agreement, as well as for failing to administer full border checks for goods arriving in Northern Ireland from Great Britain. At the time of writing, there are total of four legal cases against the UK relating to the Northern Ireland protocol.
Here’s a very small sample of the many important and fascinating cases heard in UK courts in 2021-22. Use them as a starting point for your own research, and don’t forget to follow the stories you’re interested in as they develop.
At the end of March 2022, P&O Ferries dismissed 768 workers via video message on what would be their final day of employment. Two and a half weeks’ pay for each year of service, in addition to six months’ pay, were offered to those facing dismissal.
While the government didn’t take P&O Ferries to court, despite the firm admitting it broke the law in dismissing nearly 800 workers without notice, in April an ex-P&O Ferries chef filed a tribunal claim against the company for unfair dismissal, racial discrimination and harassment. The chef is seeking to sue the company for £76 million over the unfair dismissal of around 800 staff without notice earlier this year.
Colin v Cuthbert
Last year, M&S accused Aldi of infringing its Colin the Caterpillar trademark with the design and packaging of its Cuthbert the Caterpillar cake. M&S alleged that Aldi was riding the coat-tails of its reputation and requested that Aldi remove the product from sale. The dispute has since been settled with the two supermarkets reaching a consensus over the IP rights of M&S’s Colin the Caterpillar cake.
‘Shape of You’
More than £900,000 in legal fees were awarded to Ed Sheeran and the co-writers of his hit song ‘Shape of You’, following copyright allegations that were deemed “baseless”. A High Court judge had previously ruled that Sheeran “neither deliberately nor subconsciously” ripped off a hook with his “Oh I” section in ‘Shape of You’ from a 2015 track called ‘Oh Why’ by Sami Switch. It’s since been ruled that songwriters Switch and Ross O’Donoghue, the claimants, should pay the £916,200 in legal fees – an amount that’s due to be assessed and finalised at another hearing. Copyright infringement cases in the music industry are likely to continue finding their way into court, which begs the question raised by a DWF Group Plc trainee in a recent Commercial Question on LawCareers.Net – is it inspiration or appropriation?
A celebrity libel case involving Coleen Rooney and Rebekah Vardy hit the headlines in 2019-20, after Rooney alleged that leaked details from her private Instagram account came from “Rebekah Vardy’s account”. After three years of legal arguments between the pair, on 29 July 2022 the High Court ruled that Vardy was in fact involved in a series of stories that were leaked to the tabloid media. The ruling comes after Vardy sued Rooney for publicly accusing her of leaking the stories to The Sun. However, in July 2022, Mrs Justice Steyn found that evidence demonstrated that Vardy “knew of, condoned and actively engaged” in the details being passed to The Sun. It was ruled that Vardy’s agent at the time Caroline Watt was the one “likely” to have undertaken “the direct act” of leaking the information.
Olivia Partridge (she/her) is the content manager at LawCareers.Net.