Law: How to bring order from chaos?: Roger Smith, director of the Legal Action Group, looks at the problems associated with the plans for franchising

The next president of the Law Society, Charles Elly, had them cheering at April's conference of the Legal Aid Practitioners' Group. A normally cautious soul, he roused himself to fury in his assault on Lord Mackay and his 'poodle', the Legal Aid Board. He was particularly concerned with the board's wish to encourage Law Society members into contracts, known as franchises, governing their provision of legal aid.

He said it was an object lesson to public sector administrators in how to bring chaos out of order, how to sow seeds of mistrust and fear, and how to create a first-class disaster area out of a modestly promising idea. The board itself was 'grim, downcast . . . riven by internal dissension . . . gripped by a bunker mentality in which it can trust no one.'

Mr Elly was pushing his luck in attacking the general competence of the Legal Aid Board. As the penultimate chairman of the Law Society committee that ran legal aid from 1950 to 1989, he knows that the society's custodianship was not without its problems.

There is universal agreement - whatever practitioners think about franchising - that the board's administration is significantly better than that of the society. This reached its nadir during Mr Elly's time when the south London office was paralysed for years by an ill-advised experiment to jump into the next century with a paperless office, based upon an inadequate microfiche machine.

In making his attack, Mr Elly was reiterating a deep concern of legal aid practitioners. From the mid-1970s to the early 1990s, solicitors specialising in legal aid - although they did not see it in such terms - were on a good thing. The contribution of legal aid to solicitors' total turnover roughly doubled - from 6 to about 12 per cent.

Lord Mackaynow wants to restrict increases in government expenditure to the level of inflation. Clients have been hit by cuts to eligibility, and solicitors by attempts to restrict their remuneration by paying them per case rather than per hour.

This was the unpromising context in which the Legal Aid Board launched its franchising initiative. It wanted more control over the quality of legal aid work. Franchised solicitors are to submit to standards on how they run their offices and checks on the quality of their cases.

The Law Society came up with the first, and the board hired academics to produce 'transaction criteria' to monitor the second. These involve lay auditors employed by the board marking solicitors' files according to the amount of information contained in them. A good score for a well- kept file is assumed to correlate with high quality.

Franchising carries the promise of better services, possibly at a cheaper price because they are delivered by more efficient providers. Unfortunately, the board has not played a faultless hand in promoting it. For instance, earlier this year, it rushed out a 'franchising manual', telling potentially franchised solicitors what they would be allowed to authorise for themselves in costs.

Such delegated power had been held out as one of a franchisee's more valuable perks. Its attraction was lessened when practitioners found that the board had taken the opportunity to restrict their discretion to the extent that its main object appeared to be making cuts, particularly in housing and immigration work.

The board had been so keen to publish this document that it ignored its own consultation machinery, and its staff began implementing the manual as if it were written in stone. Withdrawal of the offending passages with profuse apologies and the blaming of over-zealous underlings left many practitioners suspicious that the board had been seeking to deliver cuts by the back door.

Furthermore, the board failed to understand how lawyers might react when they saw a draft of the franchising contract they were expected to sign. Reflecting what the board no doubt saw as political reality, this imposed strict liability on solicitors, but allowed the board to change the terms when it saw fit.

It also required compliance with documents as yet unpublished and allowed the Lord Chancellor to step in and cancel the move at any time. Solicitors gagged at signing a document that would earn them a negligence suit if they had advised a client to agree to be bound by it.

The board has not been helped by the attitude of the Lord Chancellor. Inexplicably, he has chosen to threaten its credibility by suggesting that it has been economical in its explanation of the true purpose of franchising.

According to him, this is not simply a way of bringing a bit more control over quality and cost. The real objective is to set a standard against which competitive tendering can be introduced, not only for blocks of work but for larger individual cases.

Such an approach is consistent with the Government's general attraction to the auctioning of public services, but the Lord Chancellor has yet to explain how the defence of an alleged murderer might safely, or reasonably, be disposed of to the lowest bidder. The board's exasperation, as most recently expressed in its corporate plan, is palpable.

Such discord provides some explanation for why Mr Elly and his members should be so incensed about the progress of franchising. Solicitors are now threatening to boycott the idea, and the Law Society will decide whether to back such a move at its next meeting later this month.

Three things are necessary to resolve the situation. First, Lord Mackay has to rule out Dutch auctions for legal aid cases. The Legal Aid Board argues that competitive tenders would have only short- term financial benefits because a situation would soon develop where effective competition would be eliminated.

Second, the board has got to slow down the pace. It could run franchising as an experiment without detailed contracts for a year or so. This would allow for the sorting out of the franchise manual and the proper testing of its transaction criteria.

Thirdly, the Law Society should cool off and ensure that its high-ranking officers evolve more thoughtful contributions to what should be a very difficult and sensitive debate about the relative balance of professional autonomy and government control.

The prize for all three could be the development of the full promise of franchising as a mechanism which is able to encourage higher standards from the legal profession, better planning by legal aid administrators and overall, an improved deal for clients.

(Photograph omitted)

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