LEADING ARTICLE : Putting lawyers under the knife

The days when the state was prepared to sign blank cheques for Britain's professionals are nearly over. Managers in newly privatised companies must show a profit. Universities have to compete fiercely for funds and students. Civil servants face m arket testing. NHS doctors must increasingly answer to accountants for every penny spent. Now, late in the story, it is the turn of m'learned friends to face financial reality.

Yesterday, Lord Mackay, the Lord Chancellor, signalled the end of a golden era for lawyers. Since 1949 anyone eligible for civil legal aid has been on a meal ticket. A solicitor is entitled to decide which services a person requires and then charge the taxpayer according to a set list of fees. Many lawyers work hard for legal aid fees and give good value for money, but the system does not guarantee this.

An analogy would be for doctors to choose a course of treatment and receive personal fees from the taxpayer for administering the cure. Were this allowed, many more patients would find themselves subject to expensive, unnecessary surgical procedures.

Not surprisingly, the bill for this legal pork barrel has risen sharply. Yet lawyers have been protected from the results of their own profligacy and have continued with their expensive operations. So the Government has had no option but to control costsby cutting down on the numbers of legal "patients" eligible for de luxe treatment. Last year, Lord Mackay ruled that only the very poorest should in future be eligible for Legal Aid.

But that measure could only be a stopgap. Someone had to take on the lawyers. Proposals set out yesterday by Lord Mackay are a step in the right direction. The plan is that legal aid will be cash-limited. Groups of solicitors would be given an agreed annual sum for which they would have to deliver an agreed level and quality of services to those eligible.

The model is, of course, the NHS reforms. Solicitors would, like hospitals, be expected to compete against each other to win block contracts. In theory, costs would be driven down and cheaper ways of solving legal problems would be employed.

The success of this new system would not be apparent for some time: the changes would, like the NHS reforms, almost certainly be acrimonious and chaotic at first. The real test would come later. If the legal profession was still operating expensively while needy clients were being turned away, we would know that some less scrupulous lawyers had turned the changes to their own advantage.

Britain's professionals are a canny lot. Elites - be they the senior civil service, Oxbridge colleges or hospital consultants - will try to exempt themselves from the rigours of market competition. Lord Mackay should have no illusions about the capacity of his legal colleagues to hang on to outdated privileges.