The Gazette 1967/71

conveyancing scales has not been taken properly into account. In deciding to suggest this counter-balancing reduction in certain conveyancing charges of £4.1 million, the Board have furthermore failed to take into account the effect of Selective Employment Tax on the profession. This is a curious omission because in paragraph seventy-six of their report they recognise that the statistics in their report "largely relate to the period before this tax was in full operation" and they estimate "that in a full year it might amount to more than £3 million over and above what we have included in our figures". As the profession has already by now been hit for a full year by this additional £3 million, it ought surely to be taken into account in any balancing of pluses and minuses; and if taken into account it would in itself go three-quarters of the way to offset the £4.1 million increased charges recommended by the Board. The Board themselves recognise that solicitors' overhead expenses may well be increasing more rapidly than their incomes. Table 8 in the statis tical appendix shows, indeed, that the total ex penses of solicitors' practices increased more rapidly between 1964 and 1966 than did their gross tak ings, total expenses being shown in that table as having increased by nineteen per cent whereas gross takings increased by only twelve per cent. It is probable that this trend has continued and this accordingly should also be taken into account in any endeavour to balance the £4.1 million addi tional charges for certain types of business. The Board suggest that solicitors should be en titled to reduce their charges for conveyancing below the authorised scale and say that "the re strictions which at present operate to prevent a solicitor from reducing charges below this stan dard, should be abandoned altogether". This sug gestion ignores the fact that the scales of chrages have beeen fixed on the basis that they are the appropriate charges to make and that they are not merely intended as maxima. The arguments against resale price maintenance in respect of commodities do not, however, apply to the provi sion of a professional service. The purchaser of goods (especially if they are branded goods) knows that he is receiving the same article whether he buys it at a cut-price shop or at a more expensive one. The client, however, is usually unable to judge the professional service which he is given by his solicitor in a conveyancing transaction as he has not the necessary technical knowledge. It would not be in the public interest to encourage competition by solicitors who might be prepared 19

the supply of new entrants to the profession needs to be increased; there are thought to be still about 3,500 fewer solicitors than there ought to be. As to the second premise this, of course, depends partly on. the report of the Royal Commission on Doctors and Dentists Remuneration having cor rectly shown the level of solicitors' incomes and those of other professions in 1956. What the Royal Commission did was to send a questionnaire to a random sample of approximately 1,800 solicitors and they received completed questionnaires from just over 1,000, a response rate of almost fifty-nine per cent. It is not known what the particular reasons may have been for the remaining forty-one per cent having failed to reply to the questionnaire, so it cannot therefore, be assumed that the statistics relating to the incomes of solicitors quoted in the Pilkington Report were necessarily representative of the profession as a whole. Nor is it much comfort to a great many solicitors to know that if their incomes were "average" they would be receiving £4,870 per annum. The Board's statistics show that in 1966 approximately forty per cent of all solicitors who derive their incomes from private practice (whether as sole principals, partners or assistant solicitors), earned less than £2,640 before payment of tax (see Tables 4, 10 AND 12a). It must furthermore be remembered that such solicitors have, out of their earnings, to make provision for their own pensions (subject to limited tax relief) and that many of them also have to contribute out of their earnings to the working capital required by their firms. Having concluded that solicitors' incomes in 1966 were "just about right", the PIB have calcu lated that the increase they recommend in county court charges would result in an additional in come to solicitors of about £2.4 million, that the increase in lessees' solicitors' charges would result in an additional £0.9 million and that the increase in charges for the sale and purchase of properties up to £2,000 would result in an additional £0.8 million—a total increase of £4.1 million. The Board then argue that there must be a correspond ing reduction by £4.1 million in respect of certain other work and they suggest that because "this amounts to a reduction of about six per cent of scale fees from properties worth over £4,000" the whole of it should be offset in this way. It appears, in other words, that the figure of six per cent has been arrived at solely by the desire to offset the £4.1 million increase by an exactly corresponding decrease. No case has been made out for this re duction on its merits and the regressive nature of