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'Tesco Law' what is the future for law firms?

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The Labour Government introduced the Legal Services Act to try and make legal services cheaper, more widely available and more efficient for consumers by encouraging businesses from other sectors to enter into the market. As a result of the Act law firms will now be able to take money from outside investors or enter into joint ventures with non-legal businesses. In addition other types of businesses such as banks, insurers and supermarkets will be able to offer legal services. As a result the introduction of the Alternative Business Structure has been coined 'Tesco Law'. In fact the first supermarket which is poised to enter the legal market as an Alternative Business Structure is the Co-op. The Co-op plans to offer legal advice on personal injury claims, will-writing, employment, family law and probate and estate administration. The Co-op hopes the provision of legal services will attract people to the Co-op and introduce a new way of doing business. The Co-op claims that they will be able to offer a transparent service, something which is not always the case with solicitors. The Alternative Business Structure could lead to big transformations in the legal profession. At the moment Britain has around 10,400 solicitors, but it is predicted that many of those will disappear or consolidate with larger firms as they struggle to compete with the bigger brands. Consolidation of high street solicitors practices can already be seen in anticipation of this change. QualitySolicitors for example has grown from a group of 15 law firms to a group of 137, and a deal with WHSmith in April of this year to offer shoppers a free legal access point will transform it into a legal brand. The big question is whether clients will be attracted to this new breed of law firm and whether Alternative Business Structures will genuinely offer clients more choice, greater transparency and cheaper access to legal services. The traditional high street firm which predominantly serves the legal needs of their local community is often far more reasonably priced and practical than engaging a larger regional or City firm to do the work. The supermarkets or conglomerated legal suppliers may be able to offer lower prices due to their size, but it is debateable if they will be able to offer the quality of service and client care that local firms provide. The Co-op has already said that the first point of contact will be paralegals, whereas when visiting your local solicitors' office your first point of contact will be a solicitor or a partner who deals personally with your case. With 'Tesco Law' there is the risk that a client's case will just become part of a long list of cases going through the supermarket legal conveyor belt. If the legal market consolidates as anticipated then clients may be left with less choice than before, as many of their small local firms will have merged with larger firms or simply gone out of business. It will be some time until the effects of these changes are known, but practitioners remain optimistic that people will remain loyal to their local solicitors' practices. In fact independent firms will prove more important than ever if supermarkets and conglomerates are to be prevented from dominating the market. Strong local firms should continue to thrive as clients seek a more customer focused approach to their legal issues. • For additional information please contact: Neil Ashford of Gepp & Sons at ashfordn@gepp.co.uk or 01245 228104 The above is not legal advice; it is intended to provide information of general interest about current legal issues.

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