Proposals for a system of standard fees provoked anger from the profession earlier this year, with smaller firms threatening to give up legal aid work if the scheme was introduced.
Faced with a barrage of criticism, the Lord Chancellor's Department agreed to order further research on the subject, giving both parties a respite over the summer.
But with the Lord Chancellor, Lord Mackay, apparently determined to introduce the changes this year, hostilities are certain to be resumed.
Some sources expect relations between the profession and the Government, which reached an all-time low in the spring, to plummet still further.
At the centre of the row is the Government's desire to cut, or at least control, legal aid expenditure, which is rising rapidly. The budget increased by 35.4 per cent to pounds 760m last year, raising concern at the Treasury.
Lord Mackay believes that introducing standard fees for criminal work in magistrates' courts would help to curb the increases. Instead of an hourly rate, solicitors would receive a fixed payment that would not depend on the length or complexity of the case. However, lawyers say the Government's plans would encourage firms to cut corners to dispense with cases quickly. Solicitors would be penalised for thorough, painstaking work, they say.
The Law Society complained that the Lord Chancellor's original research into standard fees was flawed, prompting Lord Mackay to ask the accountants Price Waterhouse to undertake further research, which is due to be completed this month. This second study has already been attacked by solicitors, who claim it is based on flimsy information.
Yet sources close to Lord Mackay expect him to announce minor changes to his plans without altering the principle that solicitors should be paid a standard fee.
This is unlikey to satisfy the Law Society. A senior solicitor said: 'A year ago, solicitors might have accepted a compromise, but the profession is so polarised now that it will oppose almost anything unless Lord Mackay completely abandons standard fees.'
A conference on legal aid is being held by the Law Society next month, when officials are expecting to hear demands for the first all-out strike by lawyers. So far, the society's council has resisted industrial action, although a few local branches have worked to rule on a short-term basis.Reuse content