The Ostrich and the ABS

A recent article in the Law Society’s Gazette, optimistically entitled Small firms will be ?resilient? in the face of ABSs summed up a report by consultants Oxera, commissioned by the Law Society, which came to the conclusion that ABSs are not only unlikely to undermine geographic access to justice for consumers but would also not have a detrimental effect upon the businesses of small practitioners.

The research, which was only conducted on twenty law firms and only by telephone found, inter alia, that:

• existing ?commodity? legal providers, such as bulk conveyancing firms, might have problems competing with an ABS firm that is built on a trusted brand and might therefore choose to merge with a branded provider seeking to enter the market, but that
• smaller firms would be able to “differentiate themselves” by finding themselves a specialised area of the market not suitable for “high-volume, remote legal access”.

The report went on to state that some of those interviewed believed that small firms would need to “specialise in clients who value face-to-face contact, such as the elderly, disabled or high-net-worth individuals, or areas of the law that involve more bespoke advice, such as child custody or divorce” but that many interviewed believed that they would be safe from competition because they focused on market sectors such as elderly clients or because they had their own strong local branding would ?insulate them from larger firms offering a more remote service?.

Rather than giving firms any degree of comfort, the article should, in fact, be sending out a clear and strong message that unless all lawyers – not just solicitors – take off their rose coloured spectacles and start to compete in a market place which is inevitably going to become more competitive, then they will not survive.

In this first of a series of items looking at Alternative Business Structures we consider briefly why those in the current legal market place will need to change in order to survive.