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‘Penman Levy’ leads to civil war within Scotland’s legal profession as solicitors battle Law Society Executives on fat cat salaries & wasted millions

26 May

Law SocietyLaw Society of Scotland ‘takes huge salaries & expenses perks from lawyers subscriptions to fund lavish lifestyles of top executives’. THE EXPENSE of the Law Society of Scotland’s policy of shielding the likes of Borders solicitor Andrew Penman of Stormonth Darling solicitors, Kelso, from prosecutions before Discipline Tribunals and almost certain separate investigations into the Law Society’s own report that Penman and his legal firm deceived both the Royal Bank of Scotland & HM Inland Revenue, has led to a bitter civil war brewing among members of Scotland’s legal profession, concerned their spiralling obligatory annual subscriptions, resulting from costly cover ups of scandal upon scandal involving crooked lawyers stealing from clients, are being wasted by Law Society chiefs, who some solicitors now claim are wasting millions on themselves with little return to the profession.

Scotsman coverage of some of the stories relating to Andrew PenmanThe Law Society’s shielding of Andrew Penman from prosecution before the SSDT led to new & costly legislation on regulation, coupled with lost business. One solicitor, incensed at the way the Law Society’s Client Relations team handles complaints against colleagues, spoke on condition of anonymity this morning, saying :“The way the Law Society handled the scandal surrounding Andrew Penman in the 1990s, and derailed his prosecution before the SSDT has cost us all dearly.”

He went on :“Saving Private Penman has led to a slew of media coverage of cases involving rogue solicitors and huge corruption scandals within the profession which has tarnished us all for life, ultimately costing all members our reputations and incalculable lost business while the staff within the Society award themselves promotions and huge salaries out of our contributions. They have obviously caused the profession much more harm than good and now be forced out.”

Eileen Masterman & Philip YellandSLCC Chief Executive Eileen Masterman & Law Society Chief Executive Philip Yelland on £80k+ p.a. but both do same job. The dual cost to Scotland’s 10,000 solicitors of paying for expensive self regulation carried out by the Law Society of Scotland and ‘quasi-independent’ regulation handled by the new Scottish Legal Complaints Commission, highlights the huge financial burdens on solicitors, which are in turn being passed down to clients through hugely increased and in some cases, artificially inflated legal fee demands.

Jane IrvineSLCC Chief Jane Irvine announced reduced complaints levy for solicitors this year but no repayment of £2 million of taxpayers money for quango’s start up costs. While the Law Society of Scotland are reluctant to reduce the cost of solicitors contributions, the Scottish Legal Complaints Commission did make some reductions to the complaints levy, dubbed the Penman Levy by many in the legal profession, which solicitors must also pay annually, initially at a cost of £400 a year each, to fund the new commission.

However, the new ‘independent’ law complaints body is itself dogged by now well proven allegations of the same cronyism & lack of impartiality in its operation & policies which the Law Society of Scotland has made itself famous for over the decades, leading to the current state of ruin of Scotland’s legal services market.

I have written some previous articles on the costs of the SLCC and where members minds seem to lie (on perks, rather than the work) here : Complaints Commission ‘unfit for purpose’ as secret meetings with insurers & pensions take focus over consumer protection against crooked lawyers

A solicitor from a leading Glasgow law firm condemned the repetition of costs of regulation at the Law Society of Scotland and Scottish Legal Complaints Commission.

He said “How two people, Yelland & Masterman can do ostensibly the same job, and get paid over £1300 a week out of our pocket, should not be allowed to continue.”

“If that’s not bad enough, the SLCC’s Chair and Chief Executive are on more than £300 a day and board members claim over £350 a day in expenses. What kind of a regime is that when we also have to pay even more to fund the same people doing the same work at the Law Society.”

He went on : “In this financial climate solicitors and clients cannot afford for these treats to continue, just to satisfy the lifestyles of a few at the top of the profession who regularly run roughshod over members interests. I will therefore be supporting proposals due to be aired at the Law Society’s annual general meeting by David Flint of MacRoberts”

The proposals put forward by solicitor David Flint, of the Law Firm, MacRoberts solicitors, which come from letters circulated to solicitors across Scotland, are also reported today in the Scotsman newspaper, where the paper reports that “Mr Flint questioned the increased cost of the chief executive’s office, a figure that includes the salary of Lorna Jack, who took the helm in January. The latest draft accounts show that this increased by £90,000 to £326,000 in 2008.

He also highlighted the £98,000 spent on an abortive attempt to relocate the Society’s offices in Edinburgh, abandoned in light of a reduction in property values.

Mr Flint also asked whether solicitors paying £665 for the certificate should benefit from the large surplus the Society holds. The 2008 accounts show cash reserves of £1.229 million.”

Given the damage the Law Society of Scotland has done to both the legal profession and the interests of the client, there is cause enough for solicitors, and also the public to be angry at the way in which the legal profession’s governing body has not only wasted members contributions, but also continues to defy transparency & independent accountability in its operation, while spending millions of pounds in attempts to maintain its sole right to regulate & discipline lawyers in Scotland.

Douglas Mill 4Ex Law Society Chief Executive Douglas Mill was on at least £120k a year and did huge damage to Scots lawyers reputations. A former Council member of the Law Society speaking this morning claimed that in the wake of the Society’s now ex Chief Executive Douglas Mill’s resignation over the memo scandal, where Mill was brought down after a determined & admirable campaign by Cabinet Secretary for Finance John Swinney to expose corruption at the Law Society, many of the executives on huge salaries at the Society’s Drumsheugh Gardens office should either be sacked or forced to resign immediately.

He said : “Many senior officials at the Law Society I know personally, have ended up doing more harm than good for the Scots legal profession.”

“If the membership actually had a vote and a say in things which they are paying for anyway, most of that crowd who are being paid far too much for what they do, would have been gone years ago.”

He went to accuse the Law Society of greed and direct harm to public access to justice : “The ineptitude of officials at the Law Society is not only causing harm to the legal profession, they are, through their waste millions from solicitors annual contributions, and disgraceful mismanagement of client relations, causing direct harm to the public’s ability to access legal services in smaller communities, where say for instance, small legal firms and sole practitioners are being forced out of business because they cannot afford to fund the likes of £300,000 salaries for executives at the Law Society to prattle on in a fantasy world like idiots.”

An official from a consumer organisation this morning said he found dealing with the Law Society of Scotland to be “rather like trying to bargain with the devil.”

He said “The Law Society seem resistant to any change unless it is proposed by the Council itself and even then any such proposals will only address benefits to the profession as long as those changes will directly benefit officials at the Law Society itself.”

“This all comes back to a profession being allowed to regulate itself, and as we have just seen with the Banking sector, and the financial calamity its collapse has caused the entire country, professionals in positions of trust, or with access to huge financial power, or those working in the area of law, cannot be trusted to regulate themselves because they make up the rules as they go along, and inevitably something will crack, either from outside, or within.”

While the Law Society of Scotland are intensely campaigning against David Flint’s proposals to lower the cost of the practicing certificate and questions over the huge salaries of officials, they apparently do not wish to speak to parts of the media they cannot exert control over final versions of reports.

So, splits within the legal profession itself, but this is to be expected, given the way the Law Society of Scotland has treated its own members, and clients alike – spending millions of pounds on shielding the bad apples among Scotland’s 10,000 solicitors, and attempting to maintain its position of power of dictating the pace of legal reform in Scotland, while the rest of the profession has to pay for it, with costs ultimately being passed onto the public who also have to suffer poor choice of legal services and lack of access to justice.

It is time for a change, and to begin that change, control of the Law Society of Scotland must be taken away from its Council and the select few at the top of the legal establishment who have no care or general interest in either the welfare of their own members, or the public at large.

The Scotsman reports :

Law Society is ‘wasting money of its members’, critics claim

Published Date: 26 May 2009
By Christopher Mackie

A ROW over the cost of practising as a solicitor has intensified after the Law Society of Scotland was accused of wasting its members’ money.

In a letter circulated throughout the profession, David Flint, a partner in MacRoberts, claimed the Society operated as though it had “an open cheque book” funded by the subscriptions paid to it by Scottish solicitors.

Mr Flint has already tabled a motion at the forthcoming Law Society AGM demanding that the cost of the lawyers’ practising certificate be cut from £665 to £400, in the face of the harsh economic climate. The motion was accompanied by a letter to all Scots lawyers asking for support and criticising the Society. It accused the organisation of being a growing bureaucracy that failed to adequately represent the interests of members.

Following a campaign by the Society to rebut the claims, Mr Flint has circulated a second letter, detailing specific areas of waste and urging lawyers to vote for his proposal at the AGM.

In the latest document, Mr Flint said the Society had “demonstrated a singular inability to operate within any reasonable budgetary constraints: they have an open cheque book from the members and they operate accordingly.”

Mr Flint questioned the increased cost of the chief executive’s office, a figure that includes the salary of Lorna Jack, who took the helm in January. The latest draft accounts show that this increased by £90,000 to £326,000 in 2008.

He also highlighted the £98,000 spent on an abortive attempt to relocate the Society’s offices in Edinburgh, abandoned in light of a reduction in property values.

Mr Flint also asked whether solicitors paying £665 for the certificate should benefit from the large surplus the Society holds. The 2008 accounts show cash reserves of £1.229 million.

Mr Flint told The Scotsman: “My concern is members’ money is being spent on the administration, rather than on services to members. If you have a surplus being run on a members organisation the surplus belongs to the members and it should be used for their benefit.”

The Society said the decision to retain cash was approved by a vote of its members and said the increase in the cost of the chief executive office was misleading as the cost was artificially low in 2007 because of unfilled vacancies. It defended its decision to cancel the relocation of its offices, and described the incurred costs as “reasonable” for a transaction of that size.

The Law Society intends to reduce the cost of the practising certificate, but only after a review is complete. Ms Jack said: “There is a commitment to making a material reduction at this year’s SGM in September and we would hope that the profession is prepared to allow the full planning process to be completed and make its decision then.”

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