Tesco law?
The legal profession is about to be radically changed. If you would like to buy some shares in one of the large City law firms or get a will written while you are in the local supermarket or WH Smith, this may soon be possible. Giles Dixon, founding member of the Association of Publishers of Online Legal Documents (www.apod.org.uk), investigates.
For a very long time the only people able to law firms and offer legal services have been qualified lawyers, but this will be swept away by a new law that was passed in 2007 and comes into effect next year.
Under the Legal Services Act, non-lawyers will be able to form “Alternative Business Structures” with solicitors. This will mean that large companies such as banks or supermarkets will be free to offer legal services to their customers.
Some organisations are already reported to be getting ready for this brave new world – among them the Co-operative Group which has set up Co-operative Legal Services to support its members and offers will-writing and conveyancing services. Others, such as Tesco and the AA may follow.
As the author of one recent report has said, “This is all about opening up the market by using the economies that come through scale and using marketing in a different kind of way.”
So instead of going to a high street solicitor in future, those wanting a legal service may go to a store which employs lawyers to provide services to its customers. And in time we may see new business models developing – for example a new nationwide “Easydeath Services” offering a menu including will writing and inheritance tax advice, funerals and probate services, all for pre-agreed fixed fees.
At the other end of the scale, some large City firms may decide to float on the stock market, releasing capital for the partners and opening up ownership to pension funds and other investors. Given the profitability of some of the big international law firms, it could prove to be a good investment.
But there are potential conflict issues which would need to be carefully handled: a law firm partly owned by a bank might find it more difficult to get other banks as clients. Still, Goldman Sachs, the investment bank, is a shining example of a partnership that went for a stock exchange listing and remains one of the world’s most profitable companies.
While the big bang day is not scheduled until 2011 another even more influential force - the internet – is already making legal services available in new ways without even the need for the customers to leave their home or office.
The losers in this new legal world are going to include some smaller law firms, but there are opportunities for them as well. There is a limit to the number of legal services that can be commoditised - so we can envisage partnerships between solicitors and suppliers of templates developing.
And commercial deals and complex disputes will always need support from qualified legal specialists who can advise on strategy and negotiate on their client’s behalf.
As for commoditised services, there is a limit to what they can do and they do not always come with a human face. So, just as those wanting quality food will go to a farmers’ market or organic butcher rather than Tesco, so many people will still prefer to go to a solicitor rather than Tesco law – or shop online and get the best of all worlds.
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