I recently came across this article by Eddie Goldsmith (a partner in large firm Goldsmith Williams) about the possibilities for mortgage brokers in the wills and probate area of legal services now that the Legal Services Act is being implemented.
One of the main points of the Legal Services Act is the removal of the ban on non-lawyers being the sole owners of law firms. Legal Disciplinary Partnerships have allowed non-lawyers to have a stake in a firm up till now (see this old Law Society Gazette article on the issue for a good explanation of the old model) but now the whole of a law firm will be able to be owned by third parties – hence the term Tesco Law.
Solicitors have of course always been able to work for other organisations; councils and many large commercial organisations have had their own legal departments for years, primarily for whatever counts as routine stuff in their line of work but also to help liaise with outside advisors on the more esoteric areas of law.
The difference soon will be that lawyers working within organisations will be able to deliver legal services to third parties – to the organisation’s existing customers. There has been a debate for sometime as to how things will pan out. The optimists argue that allowing solicitors to work for commercial organisations will herald a new era for the consumer, bringing in the sort of commercial expertise and consumer service that the retail and service sector do so well. There is certainly a lot of sense in bringing in people with commercial expertise to handle many of the business functions of the firm and letting the solicitors getting on with being solicitors.
The pessimists point out that the large commercial organisations feted by some of the supporters really aren’t that good at customer service themselves. There are countless forums full of people ranting about how badly they have been treated by the ‘faceless’ companies which dominate our lives. I am often surprised by how many clients I have who introduce themselves if we haven’t spoken for a week, so used are they to dealing with companies where they need an identification number, password, life history, address and riddle-solving ability before they can speak to someone who has no idea who they are.
Conservative voices have also raised concerns about the impact non-lawyers will have on the ethics of the profession; there has been much interest over the last few years about companies offering services in those areas of law which are not ‘reserved’ for solicitors, barristers and the other legal professions. Will writing in particular has come under scrutiny, as firms which are regulated only in the same way as the local ‘pound shop’ have been producing wills which can have a significant impact on the lives of surviving spouses and relatives. The fear among some is that, once a solicitor owes her living to shareholders with a similar mindset, she will cut corners to meet the demands placed on her. There have been accusations of similar problems in conveyancing and personal injury firms where referral fees became the norm and the third party companies provided a large chunk of the firm’s turnover.
Apt parallels with other professionals are difficult to draw; I’m not aware of dentists’ practices rushing forth to embrace investment from outside organisations, I suspect primarily because it can be difficult to ‘scale up’ a business model which relies so heavily on individual knowledge. Having said that, there has been a significant move towards giving nurses the responsibility to carry out far more of the duties once reserved for doctors in order to get more value, a trend which has been used by some ‘factory’ firms to reduce fees (and, often, the service provided).
I for one believe that it will be very difficult for the larger, commercial organisations to move into this area and provide any better quality of work or customer service. I think the main moves will be from upper mid-level organisations such as the Co-Op, who (I believe) are already struggling to maintain the sort of customer service people expect on a large scale. I also think most of them know it and won’t bother to try, at least for now.
I also have some sympathy with my friend’s observation that ‘everything went wrong with the market when the middleman was invented. The person who takes the manufacturer’s product and persuades you to buy it for more than the manufacturer would have charged.’ Should large sums be invested from outside, will all this extra investment actually benefit the consumer or will the profit merely be redirected elsewhere?
We shall see. However I still believe at this point that we at Probaters.com will be able to provide you with a better level of service and expertise than you will find elsewhere.