Lawyers 'optimistic' over legal services reform
Alternative business structures will bring more work for high street and other firms as the big brands educate the public that they need to make a will, solicitors have suggested in a recent report.
However, practitioners also indicated that the cost of regulation is driving some lawyers who do non-reserved work to cease to be solicitors.
The report, which was based on a survey of 284 members by the Society of Trusts and Estates Practitioners and a seminar with 28 members, shows a degree of optimism in relation to Legal Services Act reforms. Lawyers predicted that the advent of ABSs will bring new entrants into the marketplace that are differently structured, managed and financed. A majority of respondents saw this as an advantage, with ‘Tesco Law’ increasing awareness among consumers of the need to have a will, lasting power of attorney and death benefits in trust.
One respondent commented that there would be a ‘bigger cake’, although ‘there will be an awful lot more people to cut the cake’.
The report, titled Trusted advisor – The future, points to an increasingly specialised market, as family relationships become more complex and more people divorce or cohabit outside marriage.
There are more cross-border estates, the research indicated, as more clients buy properties or live and work overseas.
Respondents said they felt clients were increasingly educating themselves by finding information on the internet – so-called ‘Facebook law’ – and this was leading to downward pressure on pricing.
Solicitors also suggested that proposed tighter regulation will have cost implications that make it harder for them to compete. One respondent commented: ‘There is likely to be greater regulation of firms, rather than necessarily products or services. Specifically, those of us who are in the legal profession are concerned that greater regulation would make it difficult for us to compete. I think we’re seeing that the increasing number of solicitors who are offering non-reserved work, are in fact ceasing to be solicitors’.
Imogen Brown, a wills, trusts and estates planning associate solicitor at Cambridge firm Birketts, said: ‘There is a sense of optimism among practitioners rather than doom and gloom. ABSs are a challenge, but they are not the end of the world and they could be the shot in the arm the profession needs.’
Helen Clarke, chair of the Law Society’s wills & equity committee, said: ‘The biggest challenge we face, in my view, remains unregulated will writers. They have only been an issue for the last 15 years and there has been a time lag before the problems began to emerge. Regulating them is definitely on the Legal Services Board’s agenda… We can only hope that something is done quickly before more consumers suffer.’
Comments
This is the law of the jungle
So, do I read this as meaning that STEP wants to be an ABS itself or am I wide of the mark? Tesco et al were wonderful for all other stores.Introducing them to new products and boosting their sales. Er, no Solicitors just do not understand that prices will be driven down and solicitors, with their Rolls Royce overheads will not be able to compete.
STEP
Another wonderful bit of research by the Gazette. STEP includes accountants as well as lawyers.
what is "legal work"?
This article raises an interesting point about non reserved work, and the possible exodus over the coming years of solicitors from the regulation of the SRA.
I suspect that the savvy new ABS entrants will already be drilling down their processes to ensure that all non-reserved elements of their workflows are carried out in vehicles outside the requirements of regulation; and that within the reserved element, the most "business friendly" regulators will be favoured.
All of this, in my view, will contribute to one of the biggest fallout areas post October 2011, which will be a huge confusion in the marketplace as to what is the definition of legal work, who can carry it out, and how they are regulated.
What is the difference between a solicitor and an lawyer, or a solicitor or a legal advisor in the view of the public, and why does this matter? Does it matter?
The impact of the LSA will be an increasingly complicated web of legal service suppliers, regulators and insurance schemes. Not necessarily a bad thing, but if the Law Society/SRA wish to maintain their market position then they needs to be working hard now to add value to the "solicitor" brand now.
Anyone who can see the
Anyone who can see the introduction of Tesco to the legal services market as an opportunity really needs to think again. This is the biggest single threat to legal services today, we only need to look for an independant butcher, greengrocers etc to see how the juggernaut that is Tesco has transformed (in the mian) the way we behave as consumers.
Add to this the level of understanding that Tesco and other retail giants have about their customer base and how effective they are at marketing and cross promoting products to them.
Unless a large proportion of solicitors in England and Wales stop thinking of themselves as learned gentlemen in a protected little boys club and start thinking of themselves as customer led commercial enterprises Im confident we will see major casualties moving forward.
Regulation
I am a qualified solicitor working in the private sector. If I want to set up a little separate company to do some legal consulting, maybe a little will drafting, the SRA says that I have to comply with all the relevant regs - even if the vehicle is a non-regulated company. The fact that I have a practising certificate, means any legal work I do even non-reserved work is to be overseen by them.
By comparison, if I were a FILEX I would be free to do unreserved work without involvement from ILEX or any other regulator.
As a solicitor my indemnity insurance would be £2k-£4k. at least. If I surrender my practising certificate, and work as an "unqualified" person that drops down to a few hundred. I also get to just get on with the job, rather than having to continually comply with our immense regulatory burden.
If I want to set up on my own, it makes absolutely no sense to do it as a solicitor, but lots of sense if I surrender the qualification I sweated blood for years to get and to keep.
How is this right?
Well, it is right because it
Well, it is right because it provides lots of well paid jobs to people who can tell you if you have breached one of their rules and will therefore be reprimanded/fined/struck off (even if it was by error and no harm is caused) and have it all publicised.
But don't forget that as a modern solicitor you have to be commercial and run it all as a business while the clients and the public interest is paramount.
But look on the plus side-you are an officer of the Court, have lots of status and the public look up to you!
Not like those nasty claims farmers and other referrers; they may make lots of money but the public don't like them (although the public seem to use them a lot).
There, don't you feel much better?
reply
aaah.. that explains it all. i feel much better now.
many thanks!
What is legal work?
With regard to the above question posed by Sally Holdway, there is a new phenomenon of trainee solicitors completing their traineeship but not going on the Roll.
This allows them to be employed as if they are solicitors (they will certainly have the right training) but not having to put up with the over-regulation of the SRA and not having to pay for the privilege.
Presumably when the new forms of business vehicle are allowed they will set one up under whichever regulator, other than the SRA, is appropriate.
An Opportunity Indeed
Tescolaw may drive very inefficient suppliers of services out of the market. Bad for the suppliers of those services, good for the public. Good for those wanting to diversify their range of services, modernise their delivery and concentrate on being the 'trusted adviser' recommended (correctly) by David Maister.
Even if the analogy was in any way accurate (and it isn't), if it weren't for Tesco etc al, not only would food prices be much higher, but also you'd have never heard of Balsamic vinegar, let alone be able to buy it . A medium-sized supermarket carries a wider range of goods now than you'd find in a medium-sized City 30 years ago abd 'seasonality' of fruit and veg has been almost totally abolished.
The accounting profession has always seen unqualified and qualified members compete each other and (in effect) with suppliers such as SAGE: it is hard to see any discernible negative impact on the qualifieds from either.
There are a lot of profits to be earned by those who are willing to do what is necessary to earn them. Tescolaw changes that not one iota.
Twaddle
Never underestimate the naievete of solicitors. After 30 years of erosion of profits, so IFAs and estate agents earn much more than us, a contributor can still write this twaddle. ABSs will not give us a fair fight. They will have better resources than us.