What we can learn from the closure of Lambeth Law Centre

Oct 13

Introduction

After 40 years of providing desperately needed legal services to the diverse communities of Lambeth, the Law Centre closed its doors for the last time on 15th July 2019.

There then followed several weeks of thankless work trying to transfer clients; archive files; destroy confidential waste; and clear the Centre. It eventually went into voluntary administration on the 29th August, owing a lot of money and with the loss of all jobs. The impact on staff, clients and the network has been significant and therefore we thought that now would be a proper time to take stock of what happened and what can be learned.

What went wrong?

At the LCN Conference in November 2019 I ran a session setting out what went wrong at the Centre. Since that session I have been asked for copies of my session handout and have produced this version which is an amalgam of the original paper and the notes I used whilst giving my presentation.

Of course, much of what happened at Lambeth is common, at least in part, to other advice organisations (and many charities generally). The problem with Lambeth is that all of these issues came together into a perfect storm, creating an un-survivable situation. In most organisations there are just a few issues which means that they can be managed. This doesn’t however mean that they shouldn’t be addressed.

In my conference presentation I set out the principle causes as follows:

1. Under-funding – the Centre, as with so many organisations, just simply received less money than it needed to provide the breadth of services that it wanted to provide;

2. Siege mentality – the trustees, management and staff had become accustomed to living on the edge of viability and had normalised what was a far from normal financial situation;

3. Structural Issues – there were a number of structural deficiencies;

4. Disorganised – there was a lack of accurate data and of effective systems and processes;

5. Lack of ACTIVE management;

6. Poor Governance (including no reserves and not living within its likely income);

7. Disconnect between staff and management and Board;

8. Unwilling to make hard decisions at the right times, even when it was clear that things had to change.

9. Not asking for help when it was clear that help was needed…

Under Funding

· No defined legal aid strategy to adjust to LASPO

· Low income from legal aid in both housing and immigration

· Limited grant income (with much going to one semi-independent team with which there was no MOU);

· Most if not all grants did not offer anywhere close to full costs recovery

· Farming out most HPCDS work to other organisations instead of doing in-house – and thus losing any potential income from it.

Structural Issues

· Parity pay (all staff at any level doing any job being paid the same) making the staff team expensive

· Unsuitable building (management separate from staff)

· Hosting a semi-independent team without a plan

· No effective management team (that acted as a team)

· Lack of clarity over senior solicitor role

· Team leaders with no management skills or training (or clear goals and expectations)

Disorganised

· Massively inaccurate data on AdvicePro

· No clear systems for recording grant funded work

· No accurate and up-to-date time recording

· Over-stated WIP

· No identified objectives or key results

· No accurate or meaningful management information

· Lack of basic business ground rules and expectations

· No clear management files or records

Staff Management

· No evidence of active staff management (or performance management)

· Inappropriate behaviours not dealt with (for years)

· No clear targets or objectives

· No staff performance data

· No performance management

· Team leaders not managed to manage downwards

· Persistent under-performance not tackled

Poor Governance

· Ineffective Chair

· Lack of knowledge and understanding - especially the office holders (i.e. not fully understanding legal aid, restricted funding etc.)

· Information not provided to Board in a helpful way

· Information kept from the Board

· Inactive members with no sense of purpose

· Not able to see beyond what they were being told

· No actual governance - not doing their job and unwilling to make hard choices

Disconnect

· Staff referred to all problems being with “management” - them and us

· Staff not in the loop on the seriousness of the situation

· Trustees not speaking to staff about challenges

Unwilling to make difficult decisions

· Unwilling to tackle staff performance; under-funded posts; lack of reserves etc.

· Unwilling to tackle issues with the chair or other trustees

· Unwilling to acknowledge a growing debt - even when it reached danger levels

· No effective management of the manager

· Didn’t downsize when they should have in order to live within means

· Didn't launch an emergency fundraising campaign when they should have

· DIDN’T SEEK HELP WHEN THEY SHOULD HAVE!!!!!

I recognise that many of these will be familiar to those reading this paper so let’s discuss some of them in more detail (what appears below is my original conference paper).

Some Specific Issues

What has become clear since the closure of Lambeth Law Centre, apart from a discrete VAT issue, is that some of the basic systems just were not in place.

There were staff who were not managing files well – this isn’t to say that they weren’t giving good legal advice or helping people, just that file management (including costs and compliance issues) was not, for some staff, a priority. Some staff were not doing what you’d expect to be the basics of legal file management, including:

· no clear attendance notes;

· no proper time recording;

· not properly tracking costs and disbursements;

· not tracking costs limits etc.;

· not putting cases or costs on AdvicePro;

· not properly closing cases;

· not billing cases.

When taken together, this shows practice with no effective focus on costs and no helpful or accurate management or costs data. This had serious impacts on cash flow and ultimately lost costs. This undermined any attempts at performance management as there was not the accurate underlying data to measure performance and progress.

It also obscured the true financial situation at the Centre. It undermined financial planning and fundraising as it would have been impossible to accurately assess the costs of particular teams or projects - and the lack of planned, structured and accurate record keeping also made reporting and data analysis extremely difficult. This meant that some staff were wholly under-funded (or not funded at all) as the Centre wasn’t generating the money to fully fund their roles.

File Management and Billing

Many NoP legal aid providers that did not establish or implement robust file management and costs recording processes when the 2007 legal aid contract was introduced. Before that, the legal aid scheme worked differently for NfP’s and individual file management was less critical.

If they did later establish and implement robust file management and costs recording processes, many did not then properly police and manage the way staff complied with those systems and processes, relying instead on staff to take personal responsibility to do what they should. This approach is consistent with collective management which was the norm at that time. It’s also consistent with the understandable habit of law centres staff teams (and managers) of wanting to avoid internal conflict. Ultimately everyone wants their Centre to be a nice place to work and everyone recognises the value of colleagues, even if those colleagues are not doing everything that they should…

By the time most organisations converted to more rigid management structures, the unhelpful behaviours had already become embedded. Backlogs had built up and workarounds developed.

On top of this, the nature of NfP organisations is that they attract disrupters. Lawyers who are built to push back against rules. Many have also chosen to move from private practice where they could not (or would not) work effectively within the bureaucracy and constraints - especially around billing and time recording. Many NfP lawyers say that they didn’t join an NfP organisation to chase billing targets.

The other issue has been (and remains) a lack of access to effective IT systems and other administrative support. This puts NfP agency solicitors at a disadvantage as against some in private practice.

This has meant that many NfP legal organisations have carried these problems forward for many years. There just doesn’t seem to be the time and resource to get everything sorted (though as Lambeth demonstrates, these issues must be sorted!). The day job is always in the way of dealing with historical problems. Staff get into habits that they build around making their own jobs manageable and this creates inconsistency (and rule breaking) that strong willed lawyers actively push back against changing.

It is also impossible to face a situation like Lambeth without wondering why a small minority of staff, when faced with the enormity of the problems, didn’t do more to address their own performance issues or to muck-in to help others.

Of course, all of this coincides with an extremely difficult funding environment and an ongoing lack of management and support resource. It also coincides with relentless and growing demand and the continued fracturing of society.

NfP legal organisations tend to have a staff team of “rescuers” who will always go the extra mile to help clients rather than focus on admin and costs recording. Admin, costs and billing are always and understandably seen as secondary to helping that person who has come into the organisation with an urgent legal problem.

Legal Aid barely ever covers costs (indeed in most cases it doesn’t cover costs at all). Most grant funding doesn’t offer anything close to full costs recovery and we need to think about how we engage with funders on actual costs. Data gathering and reporting bureaucracy grows, and resource diminishes.

Management

NfP legal organisations also tend to attract good kind people as managers (or people who are often accidental managers). People who generally lack in management training and skills but who have huge amounts of empathy and a deep-seated belief in social justice.

People like this see that the most important thing is that the agency survives and does as much as it can. They see how hard people are working (and the long hours they are working) and they do a great job of keeping the plates spinning.

However, what they don’t necessarily have is the knowledge, skills (and desire at times) to deal with some of those broken system, processes and poor behaviours at the heart of the agency. Not only are the problems often embedded and deep seated, but the scale of backlogs and the lack of resource (along with the relentless need to deliver against current funding in order to just keep the wheels turning) means that they often just can’t deal with those historical issues.

Some of the necessary people management problems also require confrontation (which many find extremely difficult) and, of course, that lack of accurate data makes performance management difficult (if not impossible).

Faced with a seemingly impossible task, managers focus on keeping those plates spinning rather than asking whether they should be spinning plates at all...

In addition, often the role of the Senior Solicitor isn’t as well defined as it should be and there is inconsistency across NfP legal organisations in terms of whether and how that role is defined; how responsibilities for compliance are balanced; and whether those in role fully understand the extend of their potential responsibilities. This becomes even more complex after the November 2019 SRA Standards and Regulations come into force.

Governance

Of course, what should happen is that a knowledgeable strong Board should be overseeing all of this and working with the manager to fix things. NfP legal organisation boards attract some excellent committed people but, on the whole, they don’t tend to fully understand the complexities of running the agency.

They give their time because they believe in what agency does but they don’t necessarily expect to spend trustee meetings rolling up their sleeves and doing detailed management - not that many have the first clue about the fundamental issues anyway.

Sometimes of course, defensive; protective; or inexperienced managers discourage trustees from interfering in what they see as “management” issues but can also fail to give their boards all of the information that they should have or in ways that help them understand that information.

Further, sometimes, members of Boards just aren’t up to the task or who have sat on the Board for too long and yet no one wants to tell them to step down. We have probably all observed Boards where members clearly have no understanding of the basis of governance or of NfP legal organisation management.

As a result, Boards don’t then create clear, achievable and measurable plans. Because of this, they also don’t create realistic budgets (or properly challenge unrealistic budgets) and nor do they realise the criticality of building reserves. They thus don’t focus, as they should, on performance, efficiencies, fundraising and service delivery or development. Many if not most Board members have no idea about the intricacies of legal aid funding, and few understand full costs recovery (or indeed the actual costs of delivering work).

And around all of this, again, is that relentless need. The never ending, growing, relentless stream of people desperate for legal advice and assistance. The daily examples of suffering and despair and injustice.

Matthew Howgate

26th November 2019

(updated on 13 October 2022)

Matthew Howgate