Costs draftsmen and other costs professionals are currently living through an interesting period (or possibly that should read “worrying period”).

The Legal Costs Division of recruitment agency Adept Recruitment have been sending out marketing literature reporting: “As the 2nd Quarter of 2009 draws to a close we continue to see high levels of Legal Costs Recruitment throughout the UK. Despite the economic downturn many of our Clients have continued with ambitious expansion programmes, whilst some have opened large, new departments in major cities as their workload continues to increase”. Sounds like good news, but there is a catch.

In previous postings I have commented on the potential increase in work for costs draftsmen (link to post) that may result from the current economic downturn. However, it is far too early for this work to have yet worked its way through to the legal costs industry. There is no “extra” work out there beyond what there was a few years ago. Indeed, some work, such a RTA work, has dramatically declined.

So what is happening? The short answer is that some firms are taking work at the expense of others. This has certainly been the pattern over the last five years or so in relation to defendant work. A number of the previous big players in the legal costs negotiating industry have either disappeared or shrunk dramatically. This, in part, has been caused by reductions in real terms in work volumes but has also been caused by work moving to new providers. A similar process seems to be in progress now in relation to more traditional costs draftsmen and particularly those in the claimant field. There are one or two large players who have recently been engaged in aggressive and successful expansion plans. Over recent months I have heard from claimant costs draftsmen who have told me how they are feeling the pinch as a result of the success of their rivals’ expansion programmes. The claimant costs industry is going down the same road the defendant side previously travelled where it is becoming dominated by a smaller number of large players. Whether that is good news or bad depends on your perspective.

All this redistribution of work may be interesting but will potentially become an irrelevant sideshow if some of the suggestions in the Jackson Review see the light of day. More on that subject shortly.