Bernard Ginns: One step forward, two steps back for blundering banks

To illustrate his point, John Hooper pointed out of the office window.

“Mention the word ‘bank’ to people in the street and ask them for the first three words that come into their head. Most of them you are not going to be able to write down for the newspaper.

“There is that issue about rebuilding trust in the community. It basically comes down to what do people think banks are there for?

“At the moment, a lot of people think they are there to enrich the people at the top of them.”

I asked if he thought that was a fair point. Mr Hooper replied: “If you look at banking over the last 20 years, as with many of these comments, they are not without substance.”

Last week, Yorkshire Bank and its parent company Clydesdale Bank issued a press statement, announcing plans to axe 190 jobs in the business banking operations.

David Thorburn, chief executive, said at the time: “We have been clear that the slow pace of national economic recovery will create significant challenges and that we expect job numbers to fall in the year ahead as we reshape our business.”

The banks have entered into a 90-day consultation period with staff. Those affected will have to wait until the new year to find out if they are going to lose their jobs.

I don’t expect there’ll be much Christmas cheer in those households.

On the same day, Clydesdale Bank plc published its annual report for the year ending September 30, 2011, which happened to contain details of directors’ emoluments.

The highest paid was Lynne Peacock, the former CEO, who received £1.51m, including a £459,000 bonus. Mr Thorburn, who took over the top job in July, was paid £1.16m, including a £661,000 bonus.

Mr Hooper received £1.48m, including a £709,000 bonus.

In an email, a spokesman advised me of some “key points”. He said: “Executive directors’ total emoluments increased by 1.5 per cent – well below the rate of inflation.

“The directors and UK exco did not receive any remuneration increase in the year, aside from promotion; remuneration will not be automatically reviewed again until the end of FY12.

“Executive directors’ bonuses are down 16 per cent reflecting the highly stretching targets set.”

They might indeed have tough targets. They might have worked 80-hour weeks. They might have had three years of relentless internal and external pressure since the first credit crunch. They might be worth it. But it’s difficult to see the timing of these announcements as any other than a PR disaster.

n Whether you subscribe to the Big Bang theory or not, change is definitely coming to the legal sector and it’s going to hit the high street firms the hardest.

The introduction of alternative business structures via the Legal Services Act will allow non-lawyers to invest in or own law firms.

According to John Pickering, the group chief executive of law firm Irwin Mitchell, the change presents big opportunities for firms like his, which will be able to win external funding, develop new services here and overseas and win a bigger slice of the pie.

The change is also attracting the attention of international investors, lawyers and non-lawyers alike, who see potential in using the UK as a base for providing legal services.

“There is a dynamic here, which played out to the full, could be towards the big bang that happened in the financial services sector,” said Mr Pickering, whose national firm offers a range of commoditised services.

Professor Richard Susskind, author of The End of Lawyers?, is one of those leading the debate on the future of the legal sector.

He spoke last week at Leeds University. A well-known Yorkshire lawyer who heard the speech described the outlook as “terrifying”.

Prof Susskind told me: “There is one overriding pressure on legal services – to deliver more for less. Whether multinationals or individual citizens, clients are increasingly intolerant of legal service that is hand-crafted when it can be standardised or commoditised.

“More, there is a growing demand for online legal service – advice and documents, which are much more readily available and at lower cost.

“For entrepreneurial law firms, this means new opportunities. For lawyers who are unwilling to change, the future is bleak.

“All lawyers can expect ABSs – start-ups, supermarkets, accountancy firms and others – to compete aggressively for the £25bn worth of legal work in this country.” Get ready for increasing commoditisation in legal services then. But only humans can give good counsel. At the moment.