Today’s Daily Telegraph reports on a survey with news that the small generalist firm may not survive the upheavals caused by the opening up of the English market for legal services.
A survey of 75 leading professionals by Thomson Sweet & Maxwell found that 69pc of high street solicitors firms will be either significantly or drastically affected by the Legal Services Act reforms.
Nearly 60pc of the solicitors and barristers interviewed believed that traditional high street firms would be a rarity by 2015.
The full report is available in book form under the title Brave New World: Impact of the Legal Services Act 2007 ((For the ludicrous price of £750.00 Inclusive of VAT)), but Sweet & Maxwell’s website reports that
The majority of respondents believe that High Street lawyers will be drastically affected by the reforms and that although the Bar will not be driven to extinction in the next 10 years, it will not survive in the shape it is now. There are a number of disincentives for commercial law firms to take advantage of the main provisions of the Act, but the impact of the reforms is still likely to be deeply felt even amongst the leading practices. Furthermore, the survey found that nearly half of respondents are interested in adopting an Alternative Business Structure and 37% expressed an interest in accessing external capital. It also found that the majority of those surveyed expected that partnership will become the exception rather than the norm for law firms within the next ten years.
I encountered one cheery English posting suggesting that:
The research points out that the provision of legal services through the UK’s approximately 8,500 high street firms creates a duplication of costs that leads to higher prices for customers (each firm needs to recoup basic start-up costs and are unable to achieve substantial economies of scale).
To compete in the changed environment the research quotes estimates that as many as 3,000 high street law firms, or 35% of the total, may have to disappear before high street law firms reach an optimal size. But as James Tuke, Head of Intendance Research comments: “There is hope that more nimble high street firms through consolidation, effective use of IT and systemisation of processes will actually be able to reinforce their position as trusted local or specialist suppliers.”