Law Society reforming chief to keep new broom sweeping

The Law Society's aggressive cost-cutting campaign is to lead to another round of job cuts, it has emerged, as Chancery Lane bids to reposition itself as a substantial commercial enterprise.

Talking exclusively to Legal Week, chief executive Desmond Hudson this week revealed that around 25 jobs will be axed from the body's 150-strong IT division by the end of the summer.

Seventeen compulsory redundancy notices have been issued and existing roles are not being renewed as part of a drive to shrink the department by 50% from 114 to around 60 people by September.

The move will save Chancery Lane £650,000 for the remainder of 2007 and an estimated £3.5m annually from 2008.

Meanwhile, the society has also shut down an office on Gray's Inn Road, transferring staff to its Chancery Lane headquarters and shaving £600,000 from its annual property budget.

The move comes as Hudson prepares to reshape the organisation he joined in September last year from the Institute of Chartered Accountants of Scotland, where he was chief executive, into a genuine money-making operation.

He said: "My starting point is unashamedly cutting down on costs. Then we can all start to look seriously at where we might generate more substantial revenue."

Hudson's arrival at Chancery Lane prompted an initial drive to shave £4m from its spiralling annual spending, which rose by 9% last year to hit £118m. His first move was to axe 29 jobs by the end of 2006 and, in January, he announced that the organisation would be scaling back its regional network by downsizing six of its provincial offices.

He added: "We always have to remember that our business is more complex than if we were just a straightforward organisation where making money was what we were all about; and, crucially, is making a profit exploiting our members?"

Cutbacks have enabled the Law Society to reduce the cost of the practising certificate (PC) fee in recent years.

Following a reduction in the PC fee in 2006, the society looks set to freeze the rate, which currently stands at £950, for another 12 months from November, subject to a council vote.

Although the drive for efficiency will be welcomed by the profession, critics also claim the representative body has cut corners by sharing key support functions with both the Solicitors Regulation Authority and the Legal Complaints Service.

The Law Society is currently providing core support services including IT, accounting and human resources to the other two bodies in a move that casts doubt on the separation of Chancery Lane's representative and regulatory functions. The split is a major plank of the society's bid to reposition itself for reforms like the Legal Services Bill.

Hudson defended the move, saying: "We will not separate the provision of those services unless there is a functional or cost advantage in doing so because it is the members who are paying for all of it."

In addition to stripping back expenditure, Hudson is keen to inject a credible commercial element into the Law Society by bridging the gulf between Chancery Lane and the top commercial firms.

He explained: "We have taken a very conscious decision to say that commercial firms represent a very important constituency for the Law Society and are a very important part of UK legal services. Whatever may have happened in the past, here we have a Law Society that is listening to commercial firms and, more importantly, acting on what they tell us."

The professional body recently launched a campaign across central London and in major underground stations focusing on the society's new 'Supporting Solicitors' scheme. The move follows full-page adverts earlier this summer in The Times and The Guardian flagging up the ongoing legal aid saga.

He went on: "We constantly need to hammer home to the Government that there is not one market for legal services but many complex markets, and that what may be the right regulatory structure for the way you or I buy our will is not a model for regulating major commercial transactions."

Hudson remains realistic about the limits of his role, commenting: "We are very aware that some of the services we provide are ones the larger firms might never need, but the Law Society remains a very relevant body for commercial lawyers."