Straight to the source – the pros and occasional cons of direct access

In-house teams instructing the Bar has gone mainstream over the last ten years. LB assesses how far direct access can go.

Twenty years ago the idea of any person instructing the Bar other than a private practice solicitor was frowned upon. Although as qualified solicitors in-house counsel always had the right to instruct barristers, convention dictated private practice lawyers acted as gatekeepers of the Bar for companies seeking advice on litigation. But, as the rules have changed and in-house lawyers have expanded their remits, corporate legal teams have come to appreciate the benefits of direct interaction with barristers.

With major corporates such as BAE Systems, The Crown Estate and Coca-Cola Enterprises developing either barrister panels or locking in preferred working partners that include chambers such as 4 Pump Court, Devereux Chambers, Falcon Chambers, and Serle Court Chambers, the use of direct access has become mainstream for in-house legal teams. A 2010 study by freelance journalist Jon Robins for Hardwicke Chambers, ‘Direct access to barristers – a survey of market views and needs’, canvassed 65 senior corporate executives, including in-house counsel, and found almost a third of respondents had instructed a barrister directly in the two years previously, more than twice the number in 2008. There was also an increasing confidence in direct access, with almost nine out of ten believing they had sufficient grasp of their legal issues to instruct barristers directly.

With in-house teams continuing to expand over the last five years, logic would dictate that resource-heavy teams keep as much day-to-day work in-house and only seek external advice on a bespoke, consultative basis. If that presumption is correct, it would make sense to seek the advice of a specialist in chambers, rather than call on a full-service law firm. Or would it?

In context

Head of litigation at BT, Dave Hart, finds direct access is a useful way of ensuring his team is on the right track. ‘We have a fair number of contractual disputes, and we’d often have a view, but we would want to have that stress tested by an independent party, and often you can find that expertise at the Bar,’ he says. ‘You have the benefit of somebody that does that full time and you have the benefit of the advice, by and large, being cheaper than asking a firm of solicitors.’

‘I would only go to chambers when I’m looking for more nuanced advice. I’m prepared to pay premium because it’s critical to us.’
Rob Booth, The Crown Estate

The Crown Estate’s GC, Rob Booth, agrees that getting the opinion of a barrister, with their specialist knowledge in a particular area, is invaluable. ‘When you have a £13bn property portfolio to look after that covers anything from Regent Street through to offshore wind farms, it’s amazing the number of questions you face that challenge you in new and innovative ways. I would only go to a barristers’ chambers when I’m looking for that more nuanced piece of advice – not just a fine legal mind, but a fine legal mind who can put that in the context of what our legal risk looks like, what a judge is likely to think about the questions that we’re asking or being asked, and therefore we see that as a rarefied but important territory. I’m prepared to pay premium for that advice because it’s a critical risk or of critical importance to us.’

Some in-house teams find direct access to the Bar so useful that they create barrister-focused panels and preferred working partnerships, similar to a set up they would employ when securing a panel of solicitors. One of those is Coca-Cola Enterprises, with vice president for legal Paul van Reesch selecting Devereux Chambers as its preferred set late last year.

‘We went through a panel selection process about a year ago, and as part of that we went out to a couple of chambers as well. We are currently linked in with Devereux and we use them on commercial and employment matters,’ says van Reesch. ‘Our approach has been to put them into the mix of a general group of law firms that we work with. Given the size and scope of our legal needs, it wouldn’t make sense to have a barristers panel and a solicitors panel so we just mixed the two together to make it about what services we require to meet our needs.’

Peter Rees QC of 39 Essex Chambers, formerly the head of legal at Royal Dutch Shell, believes direct access works well.

‘It has to be the right sort of case and the right sort of issue. If it’s simply a question of seeking advice on something, it seems crazy to go to a solicitors’ firm, explain why you want advice from counsel and then for them to instruct counsel. You may as well go to counsel and get their advice.’

Duncan Matthews QC argues that direct access ensures only those cases with a realistic chance of success reach litigation. The 20 Essex Street silk, with a broad practice in international and domestic commercial dispute resolution, says he has been offering direct access on an international scale for years. ‘The people who originated [direct access] were in-house lawyers at the insurance companies facing claims who wanted advice and opinions right at the outset. It’s been around for quite a long time; it’s obviously sensible as a simplified system of providing legal services that a perfectly well-qualified lawyer in-house can go direct and ask a barrister for advice on the merits.’

As in-house teams use the Bar directly more frequently, there have been whispers of dissent among both law firms and barristers, concerned their workload will be altered significantly. Solicitors are worried about diminishing demand for their services. The reverse is true for barristers, who could struggle to find the capacity to meet demands from in-house lawyers.

Matthews believes the concerns are unfounded on either side. ‘It’s a product of a combination of factors coming together at the same time, and it’s a good thing for the provision of legal services. The more realistic law firms are positive and don’t see a threat coming from the Bar, just a different way of working with the Bar.’

Only one direction

While direct access can cut out the middle man in some instances, senior in-house legal professionals are quick to reassure their external advisers that this does not mean solicitors are being side-lined (see box).

Hart says there are many issues that demand an external law firm. ‘Historically parties’ first choice would be to go to a firm of solicitors. Our default position now is that we no longer think of solicitors first. We think of barristers first and if for whatever reason barristers can’t do it, at that stage we would go to a law firm. Most litigation matters that end up in court and need advocacy would require a firm of solicitors. That’s because you need support with disclosure and witness statements. While we can provide resourcing support internally up to a certain level, it gets to a stage where actually we haven’t got the requisite capacity to deal with that in-house.’

The Law Society is pushing firms and barristers to take a collaborative approach to offer a greater range of services than either group could provide on their own. Chief executive Catherine Dixon, who is the former chief executive of the NHS Litigation Authority, predicts that direct access will continue to evolve.

‘In-house counsel are growing in power and influence both within their own organisations and across the legal sector,’ she says. ‘In-house legal teams work in partnership with a range of external advisers, including solicitors and barristers, to complement the legal services they provide. As our ‘Future of Legal Services’ [January 2016] report found, there is increasing competition within legal services. In-house teams will instruct to ensure the best advice is given to their clients irrespective of whether this comes from a solicitor or barrister.’

Clifford Chance head of commercial litigation, Simon Davis, agrees that clients will increasingly turn to the Bar when they need an informed view rather than a law firm’s infrastructure and resources.

‘In-house teams will instruct the Bar directly when it makes sense for the client – particularly when there is a discrete question of law involved and no substantive engagement required with the opposition by way of carrot-and-stick correspondence and meetings designed to achieve a satisfactory business solution. It is less likely to make sense if the Bar is expected to provide the kind of holistic, 24-hour dispute resolution service demanded of a modern firm of solicitors.’

When speaking with chief in-house counsel, there seems to be a resounding impression that quality, cost and value are the driving factors behind their decision to access the Bar directly. However, there is an acknowledgement from both in-house teams and barristers that direct access has its limitations. With cases demanding a heavy workload and deep resources, in-house teams will go to solicitors.

As Booth points out, it is not a question of whether direct access will expand further, it is more a matter of how those who engage with it embrace and shape it. ‘In a world where in-house legal teams, and especially the senior people within in-house legal teams, are being pressured to be cost conscious, to be efficient and to look at how they manage legal administration as well as legal advice, it’s only going to go in one direction, which is a continuation of more direct instruction to barristers.’ LB

madeleine.farman@legalease.co.uk