The Lawyers Defence Group’s call for government protection for high street firms (see [2010] Gazette, 29 April, 3) is about as likely to succeed as Canute’s attempt to stem the tide. As the Legal Services Act 2007 rolls relentlessly toward full implementation on 6 October 2011, firms should not place their hopes for survival on some kind of government legislation to protect solicitors. The breakers of the alternative business structures tide will consume all before them, unless solicitors develop the business culture and, equally important, business plans to cope and compete.

Protectionism distorts the market by preventing effective competition from challenging existing business. It does so by creating a false market in which price remains artificially enhanced to the exclusive benefit of established entrepreneurs. The Corn Laws of the early 19th century were intended to protect landowners’ profits and had the effect of inflating the price of grain in the domestic market, causing established landowners to enjoy a brief period in which profits were increased at the cost of higher prices for bread and other products. Following public outcry, the repeal of the Corn Laws caused the domestic corn market to collapse, with workers leaving the sector to work in other, sustainable businesses in the face of competition and lower prices from Russia and the US.

ABSs have been set up in response to concerns about the lack of competition in the profession. Protectionism will perpetuate the perception of the profession as rife with anti-competitive practices and distract the ‘endangered profession’ from focusing on competing. Such calls will encourage consumers to use the services of ABS-based businesses, instead of what will be seen as out-of-date and anti-competitive traditional solicitors. In other words, protectionism will serve only to destroy that which it is designed to preserve.

The impending arrival of ABSs should be regarded as an opportunity. Next year should be spent working out how your business will respond. Consumers are naturally slow to change the way they do business, preferring to use existing, trusted brands rather than new entrants with an untested model. However, by 2011 there will be no room for complacency. There will, however, be a limited time in which to prepare for the arrival of ABSs, but that window will be short. Your firm should consider the following:There are many considerations to be borne in mind. Firms which are serious about prospering post-October 2011 should be attending the Law Society’s Facing up to the Future roadshows in Manchester (30 June), Leeds (1 July), Birmingham (6 July) and Cardiff (7 July). These events will focus on how the threats and opportunities of ABSs could in fact lead to a stronger business model for existing players.

  • Would external investment help your business take advantage of market opportunities, either to facilitate inward investment or fund acquisitions? If so, how is that investment best structured to ensure your independence is not threatened?
  • Are there opportunities for mergers with other professional businesses such as accountants, surveyors and estate agents, to make for a stronger brand in your community?
  • People like to meet their solicitor. Is this vital but often overlooked advantage a crucial competitive edge over a model that relies entirely on post, phone and email for doing business?

If there is a threat to access to justice, it comes not from the ABS model, which is likely to improve access and the quality of consumers’ experiences of using solicitors. The real threat lies in the massive underfunding of the legal aid system and the consequent closure of law firms up and down the country that have been providing vital services to the communities they serve.

There are firms lining up to take advantage of external funding to provide services in areas such as immigration, personal injury and conveyancing. Don’t duck the challenge; prepare now. And don’t waste what little time remains begging for protectionism.

Tony Guise is a director of Guise Solicitors in London