The Economic Case for Reinstating QCs

Most lay people, in Australia, do not know what an SC is. It is worse overseas, where most, both lay and legal, do not understand that an SC is, or at least is supposed to be, functionally equivalent to one of Her Majesty’s Counsel: i.e. Queen’s Counsel or QC for short. In different contexts, ‘SC’ can refer to Senior Counsel, in-house Special Counsel, or even the Australian Star of Courage, whose recipients are also entitled to use the post-nominal ‘SC’. More colloquial, colourful and creative suggestions are sometimes proffered – not all of which end with a profanity.

Kissinger once said that academic disputes are so bitter because the stakes are so small. Similarly, a fight over the nomenclature affecting a thousand or so of the top lawyers in each of the Australian States could easily be placed in that category. But the stakes are not, any longer, that small – principally as a result of the globalisation of the law. And, further, it need not be a fight.

The office of QC dates back to the late 16^th century, when Sir Francis Bacon was appointed the first King’s Counsel.[1] The primary significance of the appointment was that they constituted a group of barristers recognised by the Sovereign as being of special eminence. When the legal profession was established in the various Australian colonies, the usage and practices of the profession in England were taken up.[2] The title serves to publicly identify that the barrister has obtained a level of experience, learning, seniority and standing within the profession as an advocate who merits recognition.3]

Between 1993 and 2008, each Australian State and Territory altered the nomenclature: replacing the title of QC with SC. NSW replaced QC with SC in 1993. This was followed by Queensland in 1994, the ACT in 1995, Victoria in 2000, WA in 2001,[4] Tasmania in 2005,[5] the NT in 2007,[6] and finally, South Australia in 2008.[7] The Commonwealth ‘quietly’[8] replaced QC with SC in 2010.[9] Thus, over a period of 15 years, each of the States gave up a 400 year old brand that is instantly recognised internationally as indicating expertise, excellence and reputation. It was the economic equivalent of replacing Coca-Cola with Cottee’s.

When Victoria made the change, the then Attorney-General, Rob Hulls, simply cited the fact that the new millennium was ‘an appropriate time to implement the transition.’[10] This reflected the general belief of the various Attorneys-General at the time that moving to SC was part of the natural development of Australia and its legal profession. As such, there was little attempt or need by the State and Territory Attorneys-General to justify the change, certainly not by reference to any potential economic costs.

At the time that they made these changes (and one is here really talking about NSW, Victoria, Queensland and Western Australia), the rise of Asia, the globalisation of the legal market, the hunger for legal services in this part of the world and the consequent phenomenon of foreign (mainly English) firms establishing a significant presence in Australia were not readily apparent. It is easy to be critical of each of the State Attorneys-General for not envisaging the very large changes in the practice of the law that have taken place in the last decade and particularly in the last few years. However, one might make the same criticism of the Commonwealth Treasury for failing to anticipate the strength of these forces and, as a consequence, consistently underestimating Commonwealth revenues during the early to middle part of the last decade. The Attorneys-General were understandably more concerned with the administration of justice in their local patches than with trying to predict – and then to position – the local legal markets to take advantage of the gathering international economic developments. As it turns out, Mr Hulls was incorrect, and the new millennium was precisely the wrong time to implement the transition away from a globally-recognised brand to a merely provincial one.

However, there were some, although not many, who, at the time, recognised that ditching the international brand was not cost free; and that it would, in fact, damage the Australian legal market. During the 1993 NSW parliamentary debates, a Labor Shadow Minister, Ron Dyer, argued that ‘The title Queen’s Counsel is well recognised in the Asia-Pacific region…and appointment as Queen’s Counsel assists Australian senior counsel to obtain access to that market.’[11] It was also said, during those debates, that ‘Legal firms in places such as Singapore…may seek to employ the services of a barrister from Australia to perhaps oppose a British barrister. They want someone of equal stature so they seek a Queen’s Counsel from Australia. It is no good saying that a senior counsel has the same status. Senior counsel will not be able to use the initials QC, which clearly indicate that the person has recognised high standards of legal experience and ability.’[12] And the NSW Bar Association noted, at the time, that the appointment to a new rank…of senior counsel would not carry the same respect.’13]

The English have not been so near-sighted as to dump the international brand. When England toyed with the idea of abolishing the appointment of QCs in 2003,[14] the English Commercial Bar Association (CBA) argued that the status of QC ‘performs a significant role in the international provision of UK legal services. It is one the badges of English law internationally.’[15] As such, any replacement or substitute (such as Senior Counsel) would have to ‘start from scratch with no international recognition and no assurance of success.’16]

Unlike the Australian politicians responsible for de-branding – and, thus, de-tooling –Australian barristers, the mayor of London has celebrated the legal export industry. Boris Johnson, told the Confederation of British Industry in November 2012 that 47% of the world’s legal services exports come from the UK.[17] Speaking of the propensity of the English lawyers to attract disputants with no apparent connection to England (for example disputes between Russian oligarchs), he said, ‘Those rouble-fuelled refreshers and retainers find their way into the pockets of chefs and waiters and doormen and janitors and nannies and tutors and actors, and put bread on the tables of some of the poorest and hardest-working families.’[18] He is not alone. Last year, the then Justice Secretary, Kenneth Clarke, told London lawyers at Clifford Chance (one of many English firms that have set up in Australia in the last year or two by merging with Australian firms), ‘The UK may no longer be able to boast that it is the work-shop of the world. But the UK can be lawyer to the world.’

By way of short diversion, one of the disputes to which Johnson was making reference was Berezovsky v Abramovich, in which Jonathon Sumption QC reportedly collected about £7 million. Sumption’s name might strike a chord because he was the silk chosen by Kerry Stokes in his multi-million dollar pay-TV litigation five years ago.[19] 

Australian lawyers need similar support from their politicians. It need not be as colourful as Boris Johnson; nor as ambitious as Kenneth Clarke. Australia need not aim to be lawyer to the world, but it should aim to be a lawyer to the region. As noted in the recent White Paper on the issue, the Asian century is an Australian opportunity.[20] This extends to the legal profession.  And, at least, the various State Attorneys-General should recognise that the Australian barristers should be provided with the tools to compete equally with English QCs in Asia. Recently, indeed in mid-December, one of them announced just that. The need for ‘Queensland silks to be competitive internationally particularly in Singapore and Hong Kong where the use of QCs is preferred’ was a central reason cited by Queensland Attorney-General Bleijie when he announced, in December 2012, that those SCs who wished to change to QC would be able to choose to do so. Queensland Bar Association president Roger Traves said, at the time of this announcement, that the association supported the changes, and supported the Attorney-General’s argument that having the name change could provide a point of difference in marketing in Asia, "It can become more important as we extend our services offshore to the Asian region, particularly Singapore and Hong Kong, which are two jurisdictions where QCs from Britain have traditionally played a major role".[21] The announcement in Queensland followed hot on the heels of a similar change in New Zealand.

Many of Australian’s finest firms of solicitors are attempting to grow into Asia – mainly by linking up with English firms. An example is the entry into the Australian market of Clifford Chance in May 2011 (the firm that the UK Justice Secretary exhorted to become lawyers to the world), Norton Rose in January 2012, the merger of Blake Dawson and Ashurst in March 2012, the alliance between Allens and Linklaters in May 2012, and the merger of Freehills and Herbert Smith in October 2012. The rationale is put succinctly by Clifford Chance, “in today’s market, no credible growth strategy for Asia Pacific can overlook Australia”.

Whilst it is, perhaps, too ambitious to aim for Australian barristers to be, Sumption-like, briefed in the best cases in London, a similar Asian aspiration is achievable – something the English Bar has recognised. For example, in 2010, Essex Court Chambers opened an office in Singapore with several members permanently residing and a number of other members regularly flying in to grasp the opportunities created by ‘the globalisation of legal services… the growth in international arbitration [and] the liberalisation of certain overseas markets.’[22] In 2012, Essex Court was joined in Singapore by Essex St and 39 Essex St Chambers.

Part of the reason that English barristers have set up in Singapore (and that the Queensland Attorney-General and President of the Queensland Bar Association specifically mentioned Singapore) is that Singapore has been successful in positioning itself as a hub for international arbitrations. The Singapore International Arbitration Centre, which was initially funded by the Singaporean government upon its creation in 1991 but is now fully self-sufficient, has a membership of more than 15,000 companies, chambers of commerce and key industry associations, handled 188 arbitrations in 2012 and even has its own smartphone app.[23] To try to put this in context, insofar as Australia is concerned, 34 International Chamber of Commerce (ICC) arbitrations were conducted in Singapore in 2010, but only two in Australia (dropping in 2011, to merely one).24]

These disputes are more renminbi than rouble-fuelled, but they are very large multi-million, even billion dollar affairs. And the number of such cases will likely continue to grow. Some of them, with the rise of Australian mining and mining services companies, and with the spread of Australian solicitors throughout Asia, will involve Australian companies or Australian legal advisors; but many will not. Australian barristers competing in that area should be supported by the best, most well-known, internationally-competitive brand available. When the English CBA was fighting the push to get rid of the title QC, it argued that that the title ‘acts as an aid to the selection of an advocate.’[25] The fact of the matter is that, in Asia, brand matters; and, in the major Asian hubs, the title SC is not a clear signal of paramount recognition in the legal profession.

Australian silks (at least the younger ones who are called SCs) should not be forced to compete in an international market that regards them as equivalent to solicitors in large firms and as different, indeed inferior, to QCs. Making the branding clear was something the Queensland Attorney-General has sought to correct in his recent announcement. Citing a concern that ‘SC was often mistaken for the term Special Counsel, which many law firms have taken to using for solicitors’, he described the title of QC, as ‘more widely known and understood’.[26] Similarly, the President of the Queensland Bar Association has made much the same point – noting that Queen’s Counsel distinguishes the barrister ‘from Special Counsel and Senior Counsel in solicitor’s firms and large corporations with in-house lawyers.’[27]

Moreover, such branding change would help in two other areas – which are not of immediate importance but are likely to be very significant in the medium to long term. The first is work in regional courts.

The second is attraction of international arbitration work to Australia. Australia,[28] Hong Kong[29] and Singapore[30] have all recently amended their international arbitration regimes to bring them more in line with the UNCITRAL Model Law on International Commercial Arbitration and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, in order to try to attract international arbitrations. 52% of respondents to the University of London’s International Arbitration Study 2010 identified that the reputation of the arbitrators are salient to their decision as to where to hold their arbitration.[31] Speaking recently in China, Chief Justice Warren of the Victorian Supreme Court, who, with others, has worked hard to attract arbitrations to Australia, pointed out that ‘the Victorian Bar has a corpus of highly experienced International Arbitration specialist advocates and Barristers who have acted as Arbitrators.’32]

This is no doubt true, but the problem with the title of SC is that it does not clearly and effectively communicate that fact to international commercial actors who engage in arbitration. However, that is exactly what the title of QC does. QC is a global brand that is recognised instantly. This is, of course, not to say that the December announcement by the Queensland Attorney-General will result in Brisbane being chosen as a seat of arbitration more often than Singapore next year. But it is a minor change that will help – not least, by indicating an understanding of what the international legal market wants and a maturity and level of engagement with that market.

At the time of writing, there are 5690 barristers in Australia listed as members of the various bar associations. This number includes 927 QC/SCs, with many of the more commercially-minded more than capable of being engaged in the type of work referred to in this article. Perhaps they will succeed, perhaps not. As a result of the recent mergers, Australian solicitors have great (global) brands behind them in their endeavours in Asia. Many are starting to enjoy success. The Australian barristers who want to try to succeed in these markets should also be allowed to have the Coca-Cola brand. The ones who want to stay behind can continue to have the Cottee’s brand. The Queensland model allows for such a choice. There need not be a fight between those who prefer QC and those who prefer SC. Each can have what he or she wants.

The lawyers to the world, Clifford Chance, have suggested that no credible growth strategy for Asia Pacific can overlook Australia. Yet the regulators of Australia’s barristers have, for the last 20 years, more or less done the reverse – overlooking Asia by overlooking the competition provided by English QCs in Asia. Until the December announcement by the Queensland Attorney-General, Australia has been providing English QCs with a very large competitive advantage in Asia, by refraining from using this entrenched globally-recognised and (importantly, in these times of straightened public finances) no-cost brand. This has, in essence, now been acknowledged by Queensland and New Zealand. Queensland Attorney-General Bleijie is right that the change will ‘give Queensland leverage [in] competing for a share of [the international] market.’[33] The Asian century may be an Australian opportunity, but taking these opportunities requires providing the market with what it wants: something the English Bar has understood and English politicians now, not only understand, but actively promote. The Queensland Attorney-General and the President of the Queensland Bar Association have made an important start, in ensuring that the Asian century, at least insofar as advocates are concerned, does not remain an entirely English opportunity.