Accountants will soon be competing directly with solicitor firms ‘on every high street in the country’, according to a leading financial adviser to the legal sector.
Ian Muirhead, chairman of Solicitors Independent Financial Advice, said he expects 750 accountancy firms – three times more than first envisaged – to move into probate work after securing an alternative business structure licence.
The Institute of Chartered Accountants in England & Wales has accredited 113 entities as an ABS since last October, having been accepted as an approved regulator almost a year ago. A further 34 applications are being processed.
Speaking at a Westminster Legal Policy Forum, Muirhead said too many solicitor firms are ‘in denial’ about the threat from the accountancy profession.
‘Success will go to those who can manage businesses and I query whether that’s going to be the solicitors or whether solicitors are going to be the back-room boys,’ he said.
Muirhead argued that law firms’ response so far has been focused on consolidation, mergers and acquisitions – but this risks playing into rivals’ hands.
‘[The response is] safety in numbers, more of the same, not thinking outside the legal silo, and therefore missing the opportunity of which many new ABSs are availing themselves, of providing a more diversified and holistic client service,’ he added.
Muirhead said law firms should invest in maintaining contact and good relations with existing contacts, rather than spend money on getting new clients in.
They should also look to work with providers of complementary services such as accountancy, surveying and estate agents to ensure they can offer those clients a wider range.
The ICAEW spent more than two years trying to become an approved regulator and last year estimated 250 firms would apply for an ABS.
Executive director Vernon Soare said the development would ‘open up the marketplace’ for the consumer and make the sector more competitive.