Four Courts, Dublin.

Despite the economic crash, the evidence is strong that the big fee "cartels" in Irish professions, continue to prosper. It's not that there is overt collusion but traditional structures and practices with controlling institutes dominated by the influential players, support high earnings for some, bolstered by self-serving restrictions. The existing system is also underpinned by the lack of transparency in the ultra-conservative Irish governance system, while the taxpayer is often the payer of the high bills. It's time to change what Adam Smith called in 1776  "the natural state of things" -- the usual or expected.

This week, Irish Times business editor John McManus focused on the unsuccessful examinership of the Thomas Read Group of pubs.

With debts of €26 million, many creditors are at a loss and before receivership fees are accounted for, the submitted fees of the examinership, amounted to €1,072,126 including VAT @ 21%, split between the examiner  Kieran McCarthy of accountants Hughes Blake, who sought €554,109, and his solicitors Lyons Kenny, who claimed €346,275. Their senior counsel Lyndon McCann charged €104,611 and his junior Ross Gorman charged €66,271.

Ms Justice Finlay Geoghan cut the ex-Vat fees about 18% and ruled that when a group of companies goes into examinership, the fees incurred in respect of each company by the examiner, can only be recouped from that company, rather than the group as a whole.

The fact that the judge would cut the fees by 18% and the parties involved likely still make a killing, in these challenging times, speaks for itself.

The Irish Times reported that €1,250 was charged for five hours spent by one employee on “general photocopying, e-mails”; €3,500 for two employees who spent “7 hours each – 15 booklets of papers prepared.”

The newspaper said the fees charged by the two principals in the legal firm, Graham Kenny and Barry Lyons, were detailed, as were the fees of the examiner Kieran McCarthy.

Kenny, for example, claimed €2,700 for six hours spent on: “Review of the management accounts. Consultation with Kieran McCarthy regarding extensions of time for the submissions of interests in the purchase of the group.”

McCarthy claimed €1,200 for "what is presumably his half of the meeting; three hours work on the same day under the following (investment/due diligence (seven companies)."

The problem with this scenario, is that if a typical accountancy firm detailed a charge €250 per hour for photocopying to a client, it would be viewed as a joke.

Why does it happen when creditors are lucky to come away with anything from the wreckage?

Given the work that is currently available for examiners and receivers and the potential in the current set-up for gilding the lily, have the professional bodies anything to say on the matter?

It doesn't seem so.

The judge's ruling that examinership fees must relate to specific companies rather than to a group as a whole, is likely to make accountants more choosy in taking assignments, where there is a better chance of rich pickings.

Professional bodies such as accountancy institutes, have traditionally been run by representatives of the big firms.

In the past decade, in the aftermath of the disclosures at tribunals about Irish politician Charles Haughey and the disintegration of Arthur Andersen, in the wake of the massive Enron fraud, in the US, there has been an effort to upgrade Victorian era practices in order to protect self-regulation. However, it is clear that promoting competition within professions, has not been given serious attention.

Why can lawyers working for State tribunals earn €2,500 and become multimillionaires?

Others earn even more, in a small country, now facing the prospect of 500,000 on the dole.

Were they the best in their class or is it a more complicated story?

David Halberstam in the "The Best and the Brightest," his scathing indictment of the Washington policy makers who crafted and escalated the Vietnam War, asked: "If they were so very smart, how could they have got it so wrong?"

As in big companies, it is who you have worked for, that is often the key ingredient in climbing the ladder.

The flameout of Wall Street, illustrates how duds, even though possessing the necessary chops of ability, can survive in the good times.

In accounting, Big 4 experience is often touted as a requirement but as the auditing of Anglo Irish Bank illustrates, it often makes the management of a project remote. The juniors do the donkey work but transactions ranging in value from €80 million to €122 million can go unnoticed for eight years.

A large number of accountancy firms could have handled the examinership of Thomas Read.

There apparently was no tendering process and it was a cost+plus charging system.

Why would anyone have the brass neck to charge ten times a reasonable hourly charge for photocopying, including overhead, unless there was an expectation of getting away with it?

Last month, Aidan Lambe, Director, Technical Policy at Institute of Chartered Accountants in Ireland (ICAI) commented on remarks by Tánaiste Mary Coughlan on professions and competition: "ICAI supports fully the need for an open and competitive economy. Far from being part of the 'sheltered sector', the accounting profession is arguably the most competitive and regulated profession in the State. There are currently nine professional accountancy bodies recognized under the Companies Acts whose activities are overseen by the Irish Auditing and Accounting Supervisory Authority. Such competition is healthy. The structural rigidities, such as set fee scales or barriers to competition referred to by the Tánaistecertainly are not present in the accounting profession. Indeed, the accounting profession was not included within the scope of a recent review of certain regulated professions by the Competition Authority.

The chill winds of economic reality have certainly impacted on ICAI members in the past months. ICAI members have experienced unemployment, have accepted salary cuts, and, as regards ICAI practitioners, have been reducing fees charged to clients.

Chartered Accountants both in business and in practice have played a vital role in helping their employers and clients through these strained economic times and will continue to do so."

The ICAI would likely argue that examinership/receivership is a specialist area.

That would be a cop-out in respect of most of them and would suggest the majority of accountancy firms lack essential skills.

Match the words with substance and significantly expand the court panel; push for transparency and tendering.

Claiming to be a modern country while adhering to nineteenth century practices, is now correctly seen as a sham.

The "bad bank" NAMA (National Assets Management Agency) has already shown itself to be a follower of the old school by issuing secret contracts, which maintain a conspiracy against the public interest.

Despite the crash, the banks in the Thomas Read case did not query the charges from the lawyers and accountants, reflecting the legacy of the bubble when it was partytime for the professions.

Adam Smith, philosopher-economist and author of The Wealth of Nations, which was published in 1776, wrote: "Masters are always and every where in a sort of tacit, but constant and uniform combination, not to raise the wages of labour above their actual rate. To violate this combination is every where a most unpopular action, and a sort of reproach to a master among his neighbours and equals. We seldom, indeed, hear of this combination, because it is the usual, and one may say, the natural state of things which nobody ever hears of."

The masters in the professions, have called the tune for too long. It's time for "the natural state of things," to change in Ireland. However, if politicians continue to support Victorian secrecy and practices, what can be expected of others?

SEE: The Waste Land - - Bord Snip, Irish Public Spending Transparency and the motto "Never do anything for the first time"