Dispute resolution practitioners need to grab opportunities to consolidate and reform their business structures or risk losing out to high street brands moving into the legal services market, a leading management consultant warned last week.

Addressing delegates at the Law Society dispute resolution section's annual conference, Professor Stephen Mayson, director of the new Legal Services Policy Institute at the College of Law, suggested the current business structures of law firms made dispute resolution and the delivery of alternative dispute resolution too expensive.


He told delegates there were too many lawyers, firms and equity partners, which caused too much cost in the market-place, and was unsustainable in the climate of legal services reform.


The proposals in the Legal Services Bill pave the way for alternative business structures (ABSs), and the Legal Services Commission has stated it would welcome new providers and greater consolidation of suppliers.


Professor Mayson predicted that in consumer litigation, such as personal injury and small claims, there was likely to be an even greater influence of branded large-scale providers in the market.


But in other types of dispute resolution, such as matrimonial matters, he said the big branded companies may be not so keen to get involved because of the risk of damage to their brand. 'In the "negative grudge purchase" where neither side comes away from the dispute as a winner or entirely happy, there is no great brand value for them to come into the market,' he explained.


In these areas, Professor Mayson said there was an opportunity for law firms to consolidate under their own steam to create critical mass and develop their own local brand in a way that will enable them to compete.


Fraser Whitehead, chairman of the dispute resolution section, said: 'The concept of ABSs should be seen as a tsunami approaching - we must prepare for the worst while hoping for the best. The only comfort for those in dispute resolution is that, rooted as we are in resolution of conflict, we may not be either economically or commercially attractive to the new entrants set to dominate the legal landscape.'


But he added: 'The idea that we might be seen as brand risky may tell us more about the way dispute resolution has to change - are we the hive and should we be the honey?'