Some of you may have heard about the shakeup of the legal profession and the introduction from the 6th of October of what is called Alternative Business structures.
Well I have pillaged this article from the Economist which sums things up quite interestingly, but which is likely to cause the demise of a number of law firms, but also create an increase in the number of complaints regarding non qualified legal people giving advice.
Anyway, thought you might be interested.
Law v business
Liberalisation of the law industry inches forward. Better late than never
LAW is a big industry, with an annual turnover of around ?25 billion in England and Wales. But it is not run on business lines. Until liberalisation got under way this month, only lawyers could own law firms and (for the most part) only law firms could deal with the general public. The result was a dire lack of competition, especially in humdrum services for the humble. Most such customers use lawyers infrequently, choose them inexpertly and find it hard to complain about what they get; all too often that means paying fat fees for poor service.
A sweeping new reform that is spreading through England and Wales (and is likely in Scotland too) should change that. After much lobbying, prevaricating and haggling since it was passed back in 2007, the Legal Services Act will allow non-lawyers to own and run firms offering legal services-Alternative Business Structures (ABSs), in the jargon. That could mean big supermarket chains using their strong brands to offer routine legal services (such as conveyancing, personal-accident litigation, small claims, wills and probate) cheaply; liberalisation has already allowed them to offer products like banking, insurance or spectacles. It could also eventually mean big law firms seeking stock-exchange listings.
Nothing so dramatic is visible yet. The first change, on October 6th, involved conveyancing (the usually routine business of property transactions). A newly empowered licensing body has started handling applications from outsiders that want to offer the service. The Legal Services Board, which will administer the market in other bits of the business, is ready too, but waiting for a parliamentary order to pass: this sets out rules on appeals, and defines just who will count as a reputable owner. Having a criminal record, even one that has expired under the Rehabilitation of Offenders Act, is enough to disqualify someone from becoming a lawyer; the same rule will apply to people managing an ABS.
Interest so far has been subdued. Despite much talk of "Tesco Law", the country's biggest supermarket says it has no plans to enter the market. Saga, which sells lots of services to the over-50s, is believed to be planning to offer lawyering too but declines to comment. Motoring organisations and the Consumers' Association (publishers of Which?) already use a loophole that allows clubs to provide legal advice to members, so are well placed to extend their services to the general public. Another is the Co-operative movement, which also runs a successful bank and other businesses. It is eager to get going-but again must wait for Parliament.
With only minor foot-dragging (by the narcoleptic standards of the legal profession), the full reforms are set to take effect in January, a year earlier than some feared. The delay owes more to official lethargy and squabbling than to protectionism by lawyers, many of whom welcome the move. Not all lawyers like having to run their own business as they do at present, notes the Law Society, a trade body. And an ABS with lively marketing should make inroads into the wills and probate business done by banks ("even slower and more expensive than we are," says a lawyer).
Well I have pillaged this article from the Economist which sums things up quite interestingly, but which is likely to cause the demise of a number of law firms, but also create an increase in the number of complaints regarding non qualified legal people giving advice.
Anyway, thought you might be interested.
Law v business
Liberalisation of the law industry inches forward. Better late than never
LAW is a big industry, with an annual turnover of around ?25 billion in England and Wales. But it is not run on business lines. Until liberalisation got under way this month, only lawyers could own law firms and (for the most part) only law firms could deal with the general public. The result was a dire lack of competition, especially in humdrum services for the humble. Most such customers use lawyers infrequently, choose them inexpertly and find it hard to complain about what they get; all too often that means paying fat fees for poor service.
A sweeping new reform that is spreading through England and Wales (and is likely in Scotland too) should change that. After much lobbying, prevaricating and haggling since it was passed back in 2007, the Legal Services Act will allow non-lawyers to own and run firms offering legal services-Alternative Business Structures (ABSs), in the jargon. That could mean big supermarket chains using their strong brands to offer routine legal services (such as conveyancing, personal-accident litigation, small claims, wills and probate) cheaply; liberalisation has already allowed them to offer products like banking, insurance or spectacles. It could also eventually mean big law firms seeking stock-exchange listings.
Nothing so dramatic is visible yet. The first change, on October 6th, involved conveyancing (the usually routine business of property transactions). A newly empowered licensing body has started handling applications from outsiders that want to offer the service. The Legal Services Board, which will administer the market in other bits of the business, is ready too, but waiting for a parliamentary order to pass: this sets out rules on appeals, and defines just who will count as a reputable owner. Having a criminal record, even one that has expired under the Rehabilitation of Offenders Act, is enough to disqualify someone from becoming a lawyer; the same rule will apply to people managing an ABS.
Interest so far has been subdued. Despite much talk of "Tesco Law", the country's biggest supermarket says it has no plans to enter the market. Saga, which sells lots of services to the over-50s, is believed to be planning to offer lawyering too but declines to comment. Motoring organisations and the Consumers' Association (publishers of Which?) already use a loophole that allows clubs to provide legal advice to members, so are well placed to extend their services to the general public. Another is the Co-operative movement, which also runs a successful bank and other businesses. It is eager to get going-but again must wait for Parliament.
With only minor foot-dragging (by the narcoleptic standards of the legal profession), the full reforms are set to take effect in January, a year earlier than some feared. The delay owes more to official lethargy and squabbling than to protectionism by lawyers, many of whom welcome the move. Not all lawyers like having to run their own business as they do at present, notes the Law Society, a trade body. And an ABS with lively marketing should make inroads into the wills and probate business done by banks ("even slower and more expensive than we are," says a lawyer).