Have you heard the one about the lawyer, accountant, banker and of course the Legal Services Act?

Put a group of lawyers, accountants and bankers together mix in some good food and drink and with a bit of luck you will generate an evening of lively debate. 

This is exactly what happened when I was invited along to a dinner hosted by a high street bank and a nationally known firm of accountants.   The purpose of the informal gathering was to debate the future of the legal profession in the light of the never-ending changes and challenges that lie ahead.

Putting to one side the countless opportunity seized by many to self congratulate, and ignoring in the main the sales pitch by the hosts, I was intrigued, and indeed surprised, by the differing views around the table on the changes that will occur once the Legal Services Act is fully implemented in October.

By way of background, many of the lawyer participants were from medium sized firms leaving my firm as the only three-partner firm in attendance.  The majority of these firms have in recent times become LLPs and much of the discussion (the dull part) centred on how these firms have put in place corporate structures to provide management. One firm was smitten about its decision a couple of years ago to bring in some high flyer from London to take on the role of Chief Executive.

Listening to these firms it occurred to me that many were so embroiled in trying to emanate the larger City firms they had to a large extent become oblivious to the bigger picture.  It may have been professional pride getting in the way but not one of these firms seemed in any way perturb by the inevitable challenges that will arise with the full implementation of the Legal Services Act.  One of the representatives actually popped up and announced that there was nothing to worry about! He expanded on this by saying like many of these ‘things’ it will all blow over!

I am not sure whether this reflects arrogance or a reckless disregard of the threats.  Perhaps it’s a bit of both.   The most worrying aspect was that the view expressed had the support of the majority of the legal attendees.  It was clear however that the banks and accountants are not so confident. There was much discussion around the table on how banks are beginning to tighten the screw on legal practices.   Firms with working capital deficiencies and succession issues now seem to be regarded as ‘high risk’.

The sudden change of fortune for  a certain large Manchester based practice that was forced into liquidation and the ramifications for its bankers, has clearly made banks look more closely at the balance sheets of law firms.  Add to this the uncertain future many high street firms face with increased competition and Jackson and the future does not look too good, particularly for the smaller firms.

The time to take ones head out of the sand and to give recognition to the threats posed by national brands with deep pockets to fund marketing is now. It is a sad indictment, and a very worrying one, that there are still a large number of lawyers out there who have yet to take any steps to protect those services that will inevitably become post Legal Services Act commoditised. These will include conveyancing, wills and personal injury.  We already know that SAGA, AA and the Co-Operative have plans to market services direct to the public, and more recently Quality Solicitors has agreed a deal with WH Smith to allow representatives to be in store to provide legal advice.

However wonderful we may believe we are, the fact is that those with legal problems who once would come through our doors, will without doubt be lured away with the power of national advertising and the attraction of low fees and perhaps even ‘club points’.  We live in a world where money is sparse, where people are looking to make cut backs in spending, to believe as some do that a good quality service will always ensure a client’s return, is, delusional.  Client loyalty is about to face its biggest ever test.

So you might ask what are we doing to prepare.  We are looking to establish a local co-operative to produce resources to run a campaign to keep work local and to look at ways of sharing services to reduce overheads.   The scheme has the backing of local banks and accountants have designed the financial model.  I am sure it will work and prove successful, however if it does not at least I can say that we have tried to do something.  Doing nothing cannot be an option.

Back to the dinner…. Great food and a fantastic insight into how divided our profession has become.

Morgan Jones and Pett are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk

Solicitors selling their soul in advance of the Legal Services Act

Local newspapers herald the arrival of a new ‘super brand’ for the legal profession and as a saviour for local legal practices against the challenge of competition when the flood doors open later in the year.

Its is true that the arrival of the Legal Services Act in October will without doubt change the legal landscape when it allows the likes of the AA, SAGA, and others to offer legal services direct to the public.

However I have strong reservations that national schemes that prey on the fear of unprepared and ill informed legal practices should be viewed as they purport as the only lifeline available. I also question whether these schemes have the depth of resources to compete at the same heights as well established and widely recognised brands such as the Co-Op.

It is inevitable that there will be increased competition after October but we should not as a profession panic and jump on the first bandwagon that emerges. Death will not arise as soon as the LSC act becomes law. It will take a short while before the large corporate concerns begin to have some impact on the market.  There is still therefore time to make informed decisions and to look at alternatives.

The lure of a being part of a new so called national brand may be strong, but we must pause and ask ourselves whether these providers have the same sized pockets as those companies which they will be competing with in the future. Can they sustain lengthy and costly marketing campaigns?  Do they already have a large national database of customers and others arms of business or linked business for cross sale opportunities?  How long will these schemes be around for? Can they seriously describe themselves as a new ‘super brand’?

More importantly why would you wish to co-brand your legal firm with a new un-tested brand name when you have worked so hard to create within your local area goodwill based on your trading name?   It just does not make sense. What happens if one of the other firms within the scheme and which shares your new ‘super brand” trading style messes up and lands themselves on the front page of the Daily Mail?

The fear firms who do jump too early must be that if the new ‘super brand’ flops or runs out of money, or suffers from adverse publicity,  how will those firms fare in the market in trying to revert back to where they were before they sold their souls to these schemes. 

My belief is that firms should band together and create local networks and to establish their own marketing hubs.  This is not difficult; it just needs like-minded firms to see the benefits of promoting the network to local people and to invest money in trying to keep legal work locally. In Norfolk and Suffolk we are looking to establish one of these networks with the help of local accountants, bankers, and other professionals. 

Keeping work local and looking at ways of making legal services and products more accessible to the consumer is essential for future survival and offers a solid and more sensible alternative to the national schemes making the rounds.  I am more than happy to share with others the model we have for our local network – without charge I should add!

Morgan Jones and Pett are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk