Throughout most of my years as a solicitor there was one non negotiable fact of life. Only solicitors could own solicitors’ firms. This was to protect the independence of the legal profession from outside influence.
All of this has changed over he last few years. Firstly it became possible to have a limited outside ownership. This was the precursor to the Alternative Business Structure which became permissible under the Legal Services Act 2007 which came into force last year. It is now possible for law firms to be entirely owned by outside interests – subject to approval by regulators. This has become known as Tesco Law, based on the idea of the popular supermarket providing legal services to customers. In fact Tesco’s have not to date, showed any interest.
But other big players have thrown their hat in the ring; most notably the Co-op who are operating as Co-Operative Legal Services. It is likely that many other household names will follow suit. I have already mentioned the plans by Eddie Stobart to offer barrister services –
So does this mean the end of the High Street Solicitors’ Firm? I don’t think so, although it certainly poses new challenges. Challenges can improve quality. If I want my firm to compete with mega rich PLCs it will only be because my firm does a better job and is more reliable. Even in the cut throat retail world there are niche, quality providers who have done well. Will clients who need legal assistance trust a big brand just because it is familiar? Time will tell but there is work to be done which might ultimately benefit consumers.
One major concern about outside ownership is that this will mean outside control and therefore a loss of independence. This seems to have been the view of the profession in the USA and Germany and most recently France whose profession has firmly rejected the idea –
I was recently at a dinner in Dublin where a Minister was promoting a similar idea and it was definitely not popular with the guests, again because of a loss if independence. In England and Wales those arguments are over. ABSs are here and are here to stay.
I predict that we will see a mix in the future. There will be Hyper Firms, even Tesco will get on board eventually. But there will also be modern and imaginative law firms who will still offer an excellent service and maintain the trust of their clients. There will even be Virtual Lawyers who may outshine all the rest!
But I am Mr. Half-Full by nature. Interesting times are ahead…