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Legal service regulations market 'weakening'

Posted by: Laurence Simons 26/04/13

The high street legal market is becoming more liberalised, meaning that a cold wind of change is blowing through the oak-clad libraries of stuffy law firms and encouraging them to step up and treat consumers with the same entrepreneurial spirit as competitors like the Co-op.

While in the past, a handsome bronze sign with some suitably portentous surnames might have been enough to draw in the custom, it seems clear that the legal services sector is in the midst of a major period of change.

According to a new report in the Economist, much of this activity stems from the trimming of the legal market that has taken place in recent years - this month the Law Society, which represents solicitors in England and Wales, announced that the number of firms and private practitioners had dropped for the first time.

In this environment, competition was always likely to pop up, and the Solicitors Regulation Authority has licensed 138 alternative business structures so far, with more expected over the coming years.

Big businesses such as the Co-op, BT and Admiral have all acquired legal trading licenses, marking a major seachange for the industry.

The Co-op hopes to employ 3,000 staff, most of them lawyers, within five years, which would make it the largest legal firm in the country, Christina Blacklaws, the firm's director of policy, explained.

While the advent of supermarket-sponsored law might make some legal professionals yearn for the days when starting a legal firm involved esoteric rituals and Victorian-era costumes, it is clear that consumers are happy to see the market opening up, as well as the potential cost reductions this could lead to.

Firms that do not advertise their services and are largely separate from the lurid world of market prices may need to reconsider their business model in the coming years if they are to stay afloat in this brave new world.