Owners of small legal practices earn less than the national living wage for legal aid work they take on, an independent report for the Law Society of Scotland has found.

The report, The Financial Health of Legal Aid Firms in Scotland, also reveals that even specialist legal aid firms have difficulty covering their costs, with a significant proportion of time spent on client work not being paid for.

Publishing the report today, the Society warned that people in Scotland who rely on legal aid may soon be unable to find a solicitor because many law firms will be unable to afford to continue with legal aid work. 

Based on research carried out for the Society by Otterburn Legal Consulting, the report is the first of its kind and shows a legal aid system under increasing pressure. 

In addition to the current level of legal aid rates, it highlights the administrative and financial burden for firms caused by "undue bureaucracy" and "extreme micro-management" by the Scottish Legal Aid Board in its approach to abatements of legal aid accounts, often in respect of very small amounts of money.

Findings in the report indicate that:

  • small firms offering legal aid (annual fees under £250,000) have difficulty creating a financially viable structure;
  • larger firms, particularly those with a turnover greater than £1m, are more viable as a business;
  • a third of the civil legal aid work and a quarter of criminal legal aid work undertaken by solicitors is unpaid;
  • only by working very long hours can partners in firms specialising in legal aid make their businesses viable;
  • private client fees are subsidising legal aid work at firms which do not specialise in legal aid.

Earlier this month the Scottish Government announced an independent review of the legal aid system, headed by Martyn Evans, chief executive of the Carnegie Trust, with membership including practising solicitors and advocates. (Click here for report.)

Eilidh Wiseman, President of the Law Society of Scotland, commented: “Whether facing unlawful eviction, resolving custody of our children, or defending a criminal charge, it is vital that people can access expert legal advice when they need it most. It should not depend simply on ability to pay.

“Parts of this report are extremely worrying and have made clear that reform of the current legal aid system is desperately needed."

Mark Thorley, co-convener (civil) of the Society’s legal aid committee, said: “The findings point to a legal aid system under increasing strain. We know that there are already gaps in legal aid provision, not just in rural areas but also in our cities and towns. If firms can’t afford to offer legal aid funded services, these gaps will widen and people, including the most vulnerable in our society, will simply not be able to find a local solicitor who can help even if they are entitled to legal aid funding. Leaving issues unresolved can lead to bigger problems further down the line which are even more costly to resolve both in human and financial terms."

Ian Moir, co-convener (criminal) added: “The report confirms the difficulties that legal aid firms are going through. At a time when there are ongoing reforms to modernise the wider court and justice system, there is an opportunity to rethink the system, examine where efficiencies can be made and explore how savings made can be reinvested into the system to ensure its long term sustainability so that people can access the help they need when and where they need it.”

Click here to view the full report.