Legal Innovation 2013

1
Legal innovation 2013

New developments in an old profession
June 2013
Title
IntrBus quia vidis vollibe rciunt que ne ipsunt renim
que nus inissum inctur secum rectas aspidigni
utento omnis di omnihilibus dicil estis volupta
diossed itiaspit mos ma del ex et molores sit ent
es eaque etur? Quias eos arupta sum il ipit fuga. Et
aces aut lam, nobitat.
www.bakertilly.co.uk
Contents
Introduction 1
Overview 2
Structure 8
Funding 13
Delivery 17
Management and people
22
International 28
To the future
31
2013 Legal Innovation Report
Introduction
We always overestimate the change that will occur
in the next two years and underestimate the change
that will occur in the next ten, Bill Gates once
said. Dont let yourself be lulled into inaction.
A large number of people have not been lulled. If the changes that have
occurred in the legal market in England and Wales in the past two years are
anything to go by, then by 2020 it will be unrecognisable.
In our October 2010 report Climate Change: forecasting the impact of
the Legal Services Act we anticipated accelerating change as law firms
and other legal service providers evolved to take advantage of new market
opportunities. At the time, those opportunities seemed to arise principally
from regulatory change and the availability of alternative business
structures. In the event, evolving client needs as well as the challenges of a
difficult economy have combined to create an environment for innovation.
Almost three years on from our last report, we review whats happened in
the intervening period. Despite the innovation which we see, the modest
pace of change may reflect a lack of consumer awareness of what
is going on. In the retail legal services market of the future, the most
successful operators will undoubtedly be those who establish a whole-of-life
relationship with their customers.
In the provision of legal services to business, pricing pressures and
the increasing sophistication of clients are arguably the key drivers of
innovation by legal service providers.
So where will all this end? Undoubtedly, the pace of change will increase.
The most adaptable, the most innovative legal businesses will survive and
grow. Others will disappear in a continuation of the trend which has already
seen many firms closing down.
In a report where innovation is the theme, we explore the ways in which law
firms have changed their structure, funding, service delivery, management
and people. We look not only at the position in England and Wales but
Scotland and the international firms too. What has happened, what is
happening and what will happen?
At the end of each section, we have summarised our thoughts on how each
aspect of the legal services market place might look in 2020. We dont
expect all our readers to agree with everything we say, but we hope you will
find our report interesting and thought provoking.
George Bull
National Chair of Professional
Practices Group
Baker Tilly
Legal Innovation Report 2013
Overview
On 6 October 2011 the first alternative business
structure (ABS) came into being Premier Property
Lawyers, the conveyancing arm of property
business myhomemove. As a volume business that
had because it was regulated by the Council for
Licensed Conveyancers (CLC) benefited from
private equity investment since 2005, it was a
fitting start to a regime that many thought was
particularly aimed at such practices.
It has not necessarily turned out
that way, however. At the time of
writing, the Solicitors Regulation
Authority (SRA) had issued 144
ABS licences, and the CLC 35. The
SRA has more than 100 still in
the pipeline and has been under
considerable pressure to speed
up the approval process. Of equal
interest have been new businesses
emerging that do not require an
ABS licence but that have been
encouraged to enter the market
because of the wider mood of
liberalisation.
Riverview Law is one of the
highest-profile of these, but
if two words sum up the nonABS initiatives they are Stobart
Barristers the arm of the
famous logistics company that
now connects consumers directly
to a barrister. Stobarts entry to
the law was probably the most
jaw-dropping moment in the
market since our first report,
Climate Change, in October 2010.
It has subsequently become

shorthand for what some perceive
as the wrong direction in which
the law is moving as a result
of liberalisation, particularly
in the wake of the revelation
that Stobarts is likely to bid
for a criminal legal aid contract
under the new price-competitive
tendering regime being introduced
this year.
A quick reminder
The term alternative business
structure appears as a heading
in the Legal Services Act 2007,
but has no statutory meaning;
the SRA calls them licensed
bodies. In essence they are
businesses with a lawyer and a
non-lawyer owner/manager that
conduct reserved legal activities.
A lawyer is a member of one
of the eight branches of the
profession recognised by the Act:
solicitor, barrister, chartered legal
executive, licensed conveyancer,
patent agent, trade mark attorney,

costs lawyer and notary.
The reserved legal activities
are currently conveyancing,
probate, advocacy, litigation,
administration of oaths and
notarial activities. The government
recently rejected a Legal Services
Board recommendation to add
will-writing to the list. It is also
starting to investigate whether
general legal advice however
that is to be defined should
become reserved to deal with the
problem that consumers assume
anyone providing legal services
is regulated, when they need not
be and often are not. The boards
chief executive, Chris Kenny,
recently expressed a personal view
that the status quo over reserved
and unreserved legal activities
is unsustainable and the answer
may be for all legal advice to be
regulated.
Though the SRA and CLC are
currently the only ABS regulators,
several more are in the pipeline:
the Bar Standards Board, which
wants to regulate advocacyfocused ABSs; the Institute
of Chartered Accountants in
England and Wales, which needs
to become one to support its
bid for its members to have
the right to conduct reserved
probate work; the Intellectual
Property Regulation Board; and
ILEX Professional Standards (the
regulatory arm of the Chartered
Institute of Legal Executives).
ABSs the journey so far

The largest category of ABSs
licensed to date are those deemed
by some to be the unexciting
ones those firms with nonlawyer partners and which are not
otherwise planning any structural
change to their practices. This has
ranged from sole practitioners
bringing in their spouse as a
partner to large practices, such as
City of London firm Bristows, with
an accountant partner. But these
ABSs should not be overlooked:
only a few years ago having a nonlawyer partner was unthinkable;
now it is not only commonplace
but even de rigeur.
One characteristic shared by
the early movers in ABS land
is a corporate management
style. This includes not only the
new entrants, which are already
corporate in structure and nature,
but also the legal partnerships
that have moved away from the
traditional partnership culture.
This is not an easy transition and
not one to be embarked on by the
fainthearted. However, for all but
perhaps the smallest of firms, it
will be a necessary transition to
undertake.
Consumer brands have been
expected from the start, although
to date The Co-operative is the
only one with a licence. Though
BT has a licence, its new legal
arm will at the outset provide
legal services only to corporate
customers, initially in the motor
claims market, but with an eye
Stobarts entry to the law

was probably the most jawdropping moment in the market
since our first report, Climate
Change, in October 2010.
It has subsequently become
shorthand for what some
perceive as the wrong direction
in which the law is moving
Businesses that would not have thought of providing legal

services are thinking about whether to enter the market as a
response to the recent ban on referral fees.
Steve Carter, Head of Professional Practices Group, North, Baker Tilly
to expanding into other areas of

law. The AA and Saga which are
owned by the same private equity
company have their applications
in with the SRA. Rumours abound
of big retail names joining them; for
those with banking arms, it appears
to be a straightforward brand
extension.
Structurally, rather than set up a
firm from scratch, they may well
follow the example of some of the
countrys biggest insurers, such
as Admiral and Ageas, which have
launched joint venture ABSs with
specialist personal injury (PI) law
firms to handle policyholders
claims. Direct Line has also unveiled
ABS plans. These are a response
to the huge shake-up in civil justice
and costs that took place on 1 April
2013, and in particular the ban on
the payment of referral fees in PI.
It has been interesting to see and
hear how some businesses that
would not previously have thought
of providing legal services are now
considering whether to enter the
market in response to the recent
ban on referral fees. Rather than
referring their customers to a
panel of lawyers in exchange for a
referral fee they are now exploring
the possibility of delivering
legal services themselves. Some
have decided it is not for them.
Nevertheless, the referral fee ban
may have provided the impetus for
a seismic shift in the market over
the next few years as businesses
start to explore the opportunity
afforded by ABS for their
customers.
ABSs have come at just the right

time for insurers but these new
joint ventures are the subject of
heavy criticism from claimant
solicitors: first, because in
allowing the law firm and insurer
to share profits via an ABS, they
can facilitate the same transfer
of value that plain referral fees
used to; and second, because of
the risk of the solicitors having a
conflict of interest between clients
and the insurer. The SRA insists
that it is very aware of both of
these issues.
Indeed, a sizeable minority of the
ABSs can be directly linked to
the civil justice reforms: Quindell
Portfolio, for example, is an AIMlisted company that has acquired
three PI law firms in the last
year, along with a host of other
businesses, as it looks to build
an end-to-end claims outsourcing
service for insurers.
Around half a dozen accident and
claims management companies
have formed ABSs with similar
ambitions of providing an
integrated service; Sheffield law
firm Proddow Mackay has linked
up with a claims management
firm, an insurer and a broker in
separate ABSs in an effort to add
volume to the firm.
Arguably this is the continuing
fallout of the solicitors
professions failure to take the
initiative in 1999 when legal
aid for personal injury was
withdrawn and no win, no fee
agreements became the norm.
Only a few years ago having

a non-lawyer partner was
unthinkable; now it is not
only commonplace
but even de rigeur.
Rowan Williams, Head of Professional Practices
Group, London and South, Baker Tilly
Private equity is becoming

more prominent, although
initial interest has not yet
followed through into high
levels of investment.
George Bull, National Chair of Professional
Practices Group, Baker Tilly
This brought with it the rise of

and other work introducers, on
whom many law firms relied, with
the result that they must now
find other ways of continuing the
relationship that do not involve
a direct fee in return for being
referred a piece of work.
Private equity is becoming more
prominent, although initial interest
has not yet followed through
into high levels of investment.
Insurance law firms Parabis and
Keoghs have received investment
from Duke Street Capital and LDC
respectively, while the headline
writers had fun with former
Dragons Den star James Caans
investment in Staffordshire firm
Knights. He has subsequently
added virtual law firm Excello to
his portfolio.
Another virtual practice, Everyman
Legal, became the first firm to
receive investment from private
individuals. Its six private investors

have become shareholders of the
firm, which specialises in acting
for entrepreneurs.
A separate ABS category is those
embracing regulation for the first
time, such as will-writing business
Parchment Law Group and leading
probate provider Kings Court
Trust. This is an area of law in a
difficult regulatory position the
reserved aspect of probate work
is narrow, meaning almost all of
it can be done by non-solicitors;
meanwhile, as already mentioned,
the Legal Services Board has
recommended to the government
that will-writing, but not estate
administration, become a reserved
activity. If accepted, this will bring
a whole new class of legal services
provider inside the regulatory net.
Legal Clarity, a Birminghambased business, has also made
such a move. Since 2007 it
has offered legal drafting and
company secretarial services

to accountants, solicitors and
entrepreneurs. It did not need to
be regulated because it does not
conduct reserved legal activities
it also had a non-lawyer investor
but was run along law firm
lines and has chosen to become
an ABS to give clients the extra
reassurance they would expect
when taking advice on substantive
legal matters.
Not-for-profit organisations can
also form an ABS; the Community
Advice and Law Service in
Leicester now owns an ABS that
offers competitively priced work
in areas recently removed from
the scope of legal aid, using
the proceeds to support its free
services and make it less reliant
on government funding and
grants. It also keeps the services
fee-charging business at arms
length from its free service (and
they are in different locations).
No large firm has yet unveiled

a significantly new or different
way of practising corporate law.
Multi-disciplinary practices
(MDPs) have been slow to take
off. Perhaps the purest to date
is specialist construction law
firm SLS Solicitors Limited,
which has been bought by
Systech International, a global
consultancy that project manages
aspects of some of the worlds
largest infrastructure and energy
projects. Systech now offers legal,
commercial and technical services
to its clients under one brand.
There is also Red Square London,
which specialises in helping
wealthy business people from
Russia and Eastern Europe
relocate to London; it acquired
its licence in order to add legal
services to its business services
portfolio.
Finally, Price Bailey became the
first accountancy firm to form
an ABS. The firm, an eight-office
practice across East Anglia,
London and Guernsey, created
Price Bailey Legal Services
after recruiting a solicitor to
run its large payroll solutions
department, which often strayed
into areas of employment law.
ABS status allows the firm to
promote that offering in the
market, but Price Bailey is being
very cautious about expanding
beyond that it advises law firms
and does not want to tread on
their toes.
The application by the Institute
of Chartered Accountants in
England and Wales for the power
to grant its members the right to
conduct reserved probate work
and to regulate ABSs will, if

successful, bring another group
of practitioners within legal
regulation. The Institutes research
indicates that around 250 firms
might seek accreditation: 150
sole practitioners, who would have
authorised firm status, and 100
larger practices, most of whom
would look to become ABSs.
Then we have companies that
see an ABS as a platform for
expansion. Legal expenses insurer
Abbey Protection plc became
an ABS and then acquired
Manchester commercial law
firm Lewis Hymanson Small,
completing a three-pronged
strategy to expand its services to
the SME market.
Becoming an ABS allows AIMlisted Abbey to scale up its
60-lawyer call centre to provide
a wider range of commercial
litigation services beyond those
covered by insurance, to offer
these through some of its
affinity clients the biggest of
which is the Federation of Small
Businesses and, by buying a law
firm, to have access to expertise
in areas of law which it does not
initially want to resource in-house.
The CLC has licensed
Conveyancing Direct, a volume
business that is part of the
Connells estate agency group,
which in turn is owned by Skipton
Building Society. The firm said
ABS status gave it more scope
to grow into other areas of legal
services.
Have you put a new structure in place

to allow non-lawyer ownership?
Do you have non-lawyer management

or a non-lawyer non-executive member
of your management team?
Would you consider having an outside

investor?
0%
4%
23%
46%
18%
25%
5%
39%
70%
27%
11%
32%
n Yes
n Yes
n Yes, definetely
n No, but expect to
n No, but expect to
n Yes, possibly
n No, dont expect to
n No
n Uncertain
n Uncertain
n Uncertain
Finally, there are the entirely new

entrants to the market the likes
of Brilliant Law, backed by Betfair
founder Bert Black, and Bobby
Dhanjal Legal Services, set up
by an IFA in Leicester, who see
a market ripe for a new way of
structuring legal practices and
delivering services differently.
We look at these two firms later
in the report.
team), while a third would not

consider external investment.
There are examples of innovation

and creativity among these
practices: Lawyers On Demand,
the contract lawyer offering
developed by Berwin Leighton
Paisner, stands out and has been
copied by others as the concept
of flexible resourcing really begins
to take off. A number of virtual
or dispersed practices have
also emerged such as Halebury,
Gunnercooke, Keystone and Axiom
and these have attracted the
kinds of lawyers and clients that
indicate this is not a passing fad.
So what havent we seen?

There remains a fair degree of
professional reluctance to go down
this road; our survey shows that
nearly half of respondents do
not expect to bring in non-lawyer
owners (even though 70% have a
non-lawyer in their management
ABS-related activity among

the largest law firms has been
conspicuous by its absence,
although some surveys suggest
strong interest in multidisciplinary practices. This is not,
however, surprising. Even if there
was a need for cash that only
external investment could meet,
the international resistance to
ABSs, which we detail later in
the report, remains as big a
stumbling block today as it was
when we discussed this issue
three years ago.
But, in the main, no large firm

has yet unveiled a significantly
new or different way of practising
corporate law.
Structure
In the October 2010 Baker Tilly Climate Change
report, 10 possible ABS models were identified
and most of these have either already come to
pass or are set to. However, we have yet to see a
floated company while it is often reported that
national law firm Irwin Mitchell is to float to secure
the external investment it has said it wants, this
has never been confirmed by the firm itself nor a
totally externally owned firm where the owner has
no interest in the supply of the ABSs services. In
this model, the ABS would be a ring-fenced legal
services arm of the parent external owner and
could take advantage of the corporate brands,
such as Nike Law or Fortnum and Mason Law.
In BT Law we already have an
in-house team expanding into the
market, and this is also likely to
happen in local government as
Kent Legal Services (KLS) the
legal arm of Kent County Council
is planning to launch an ABS,
probably in conjunction with a
law firm. The aim is to expand the
pioneering councils presence as
a provider of legal services in the
wider market. KLS already advises
330 bodies across the public
sector including police, fire,
education and health authorities
as well as other councils. The
ABS play could extend KLSs reach
to the likes of utility companies,
which are currently beyond
the power to trade that local
authorities already have.
Regulatory scrutiny
Any proposed structure for an
ABS has to be approved by the
SRA. It has recently reviewed the
application process and put a
greater focus on ensuring early on
that the risks posed by the new
firm are understood by regulator
and applicant alike, and that plans
are put in place to mitigate these
risks.
Examples given by the SRA
include:
Proposals to share premises
with third parties or other
departments of an MDP how
will client confidentiality be
protected?
Outsourcing what activities are

undertaken by the outsourced
service provider? Will they be
within the jurisdiction? How
will the quality of their work be
monitored?
Multiple offices how will
conflicts of interest be identified
and managed?
Governance how will the
firm be governed? What steps
have been taken to ensure no
individual is too dominant?
Nominee companies is there
clarity over who will own and run
the firm?
Structure is, of course, a significant
part of this process and there
are examples of SRA demands
for changes. For example, as
part of the process to secure the
licence, Abbey Protections trading
subsidiary, Abbey Protection Group
Ltd, had to undergo a restructuring
that saw non-legal divisions
transferred to a new, wholly owned
subsidiary.
During the application process,
Abbey managing director Chris
Ward said: One of the biggest
issues has been having to work
within the parameters of the
2007 [Legal Services] Act and its
suitability for MDP applicants such
as ourselves. It certainly doesnt
make the path to a freer and
more competitive marketplace for
legal services with innovative and
customer focused ideals easy to
navigate.
The SRA put restrictions on

Parabiss offshore operation in
South Africa, where it conducts
pre-litigation claimant motor injury
file handling. Conditions attached
to its ABS licence state that Parabis
must not increase the proportion
of non-legally qualified fee-earners
to legally qualified fee-earners from
the existing ratio of 34:1 without
the SRAs prior approval. It must
also not change the nature of
the work undertaken by its South
African arm without the SRAs prior
approval. The final condition is that
Parabis must notify the SRA at least
28 days before opening another
overseas office.
Parabis CEO Tim Oliver explained
that the SRA wanted to make sure
that the South African office is run
exactly as it would be if it were
in the UK; so if Parabis wants to
expand in Pretoria, the supervision
ratio of lawyers to non-lawyers will
need to be similar to that in the UK.
He added that if Parabis decides
to start doing other work in South
Africa, it would need to flag that
with the SRA to ensure that it does
not breach the separate business
rule (SBR).
The SBR is perhaps the biggest
structural stumbling block. This
prevents solicitors and ABSs from
hiving off non-reserved legal work
into unregulated businesses, but for
non-legal businesses that already
conduct non-reserved work which
covers most legal activity and then
want to set up an ABS, it can cause
real problems.
Having to work within the

parameters of the 2007 LSA
certainly doesnt make the
path to a freer and more
competitive marketplace for
legal services with innovative
and customer focused ideals
easy to navigate.
Chris Ward, Managing Director, Abbey
10
For the SRA, the rule prevents

law firms and solicitors from
seeking to avoid regulation, and
provides clarity and simplicity
to consumers of legal services.
However, the Legal Services Board
thinks it should be scrapped. In a
recent letter from the board to the
SRA, chief executive Chris Kenny
said: We struggle in particular to
understand why a business that
has successfully delivered legal
advice outside of legal regulation
without any evidence of consumer
detriment should be compelled
to bring those services within the
oversight of the SRA in order to
deliver reserved legal activities.
Mr Kenny said that the issue is
only likely to grow: At the retail
end of the business, we are
concerned that the rule, combined
with the approach to what you
call MDPs, may create artificial
boundaries within the market
between firms that want to deliver
non-reserved activities and those
that want to deliver reserved
ones: if the price of delivering
reserved services is regulation of
other legal services that do not
need to be regulated, that adds
to the costs that consumers pay,
distorts competition and prevents
innovation. Of course, this could
be resolved by the extension of
reservation to all legal work as
indeed Mr Kenny himself has
suggested but this is highly
unlikely to happen for several
years.
In the meantime, Mr Kenny said

any risks that do arise from the
mix of reserved and non-reserved
work can be managed through
conditions on law firms and
ABSs, or on individual practising
certificates.
This was the approach the SRA
took with the joint venture ABS
set up between insurer Ageas
and Cardiffs NewLaw Solicitors.
It provided a waiver to the SBR
that the connected businesses
of Groupama Insurance, Tesco
Underwriting and Ageas Insurance
may only continue with the
prohibited separate business
activities identified at the date
of this decision, namely the
conduct of third-party claims up
to, but not including, litigation.
The Community Advice and Law
Service was also granted a waiver
from the SBR, otherwise all of its
free services would have had to be
regulated.
Starting from scratch

Alternative business structures
and new entrants are the least
of some firms concerns in the
litigation market, especially
personal injury litigation. The
recent changes to the portal
fees and the Jackson reforms
make some business models
unsustainable.
The recent changes to

the portal fees and the
Jackson reforms make
some business models
unsustainable.
Steve Carter, Head of Professional Practices Group,
North, Baker Tilly
2013 Legal Innovation Report 11
New tools and ideas may

allow traditional firms to
operate in a better way. In
all sorts of businesses, new
ideas need to be embraced.
Bobby Dhanjal, Owner, Bobby Dhanjal
Legal Services
An advantage new entrants to

the market have is the chance
to start from scratch, not just in
relation to corporate structure,
but in the whole way the business
is structured. Riverview Law, says
chief executive Karl Chapman,
was built from the customer
up by asking what clients want
from legal services rather than
from the law firm partner down,
and seeks to change the way
organisations buy and use legal
services.
He says: With Riverview Law
were applying common sense
business principles to a market
that has been protected from real
competition for too long. We have
many advantages law firms dont
have; we started with a blank
piece of paper, we spent time
talking to businesses about what
they want, and then we designed
an operating and customer
service model that delivers it top
customer support people, lawyers
and legal assistants, combined
with end-to-end technology and
low overheads.
Brilliant Law is also taking a very
modern approach to building the
business. It is difficult to broad
brush the whole legal sector, but
historically law firms have relied
on personal connections to win
work certainly in the corporate
sector, says CEO Matthew
Briggs. With volume litigation
and personal injury, a lot of that
is through affinity partners and
linking in with large work providers
such as insurance brokers and

claims management companies.
The way we see it at Brilliant
Law is very different. What we are
building here is a multi-channel
and multi-dimensional marketing
strategy to create one of the
most future-proof models in the
market. We still value referrals
and personal recommendations
as they are a really important
part of our strategic aim
to become one of the most
recommended in our sector.
But in addition, we are highly
focused on creating a digital shop
window establishing an online
presence with branding through
search engine optimisation and
page search advertising. We are
creating mechanisms to allow
consumers to procure legal
services in a different way.
Brilliant Law developed its
products by researching what
people were looking for online,
such as employment contracts,
asset purchase agreements and
shareholder agreements. Our
intelligent approach allows us to
cherry-pick key areas we know
people are searching for, Mr
Briggs explains.
In addition, we are looking at
affiliate relationships and affinity
relationships where we support
other brands and partner up with
other entities who have a similar
type of product set, targeting the
same demographic to provide
a more holistic offering to the
business community.
The ABS Bobby Dhanjal Legal

Services was the brainchild of
the eponymous Leicester-based
IFA and operates as a separate
entity and in a different location
to Bobby Dhanjal Wealth
Management.
Coming from owning a financial
advisors firm, what we bring into
the legal market is a business
acumen and proactive marketing
philosophy, says Mr Dhanjal.
We are looking to replicate that
same formula in the law. The work
within legal services providers is
changing and price is becoming
more of an issue. On top of that,
there is packaging and looking at
the whole delivery of services.
Our approach has been to
come into the sector, looking at
its structure, and see how that
matches ours. We are delivering
legal services in a different way to
the traditional billable hour model.
But there are a couple of ways in
which traditional firms can deal
with the changing legal landscape.
They can embrace it and see what
it can bring to their own firm, or
see it as a threat. New tools and
ideas may allow traditional firms
to operate in a better way. In all
sorts of businesses, new ideas
need to be embraced.
11
12
CASE STUDY
DAS
Back in 2007, legal expenses insurer DAS was the
first company to announce its intention to become
an ABS and subsequently was one of the first to
submit its application. However, it took a year to
approve, with the company finally able to launch
DAS Law following the acquisition of Bristol firm
CW Law on 1 April 2013.
DAS has ambitions to become one
of the half dozen or so consumer
brands that some predict will
come to dominate the legal
market in the years to come. As
part of this, in 2011 DAS bought
online legal services company
Everything Legal. Everything Legal
which owns legal advice website
Law on the Web along with more
than a hundred niche legal sites
which together have getting on for
3 million visitors gives DAS a
strong direct route to market.
The separate business rule was
one of the problems with the
ABS application, says Kathryn
Mortimer, DASs head of legal
services and managing director
of DAS Law. Many businesses
now investing in law firms may
find that their activity could
potentially offend the separate
business rule. The SRA indicated
from the outset of our application
that our employees operating the
legal advice line service to our 10
million policy holders would have
to move into the legal practice and
be regulated by them.
There is one condition on our
ABS licence which relates to the
subsidiary Everything Legal Ltd,
which has run PPI mis-selling
claims for the last three years.
The SRA has taken the view
that this service is prohibited
separate business activity as it
is essentially carrying out pre-
litigation work. I argued that PPI

mis-selling is never litigated,
but the SRA did not accept this
argument. We have reluctantly
agreed to move all those activities
into the law firm.
It is this sort of situation
which is causing a lot of ABS
applicants problems. For
example, accountants wanting
to apply for an ABS joint venture
could find that tax advice will fall
under the separate business rule.
Im convinced it is slowing down
the process because it can create
havoc with an existing businesss
internal structure.
Ms Mortimer said she understood
the thinking behind the rule: It is
driven by the fear that non-lawyer
investors in law firms who dont
want to be under the onerous
compliance regime of the SRA
will buy a law firm and carry
on certain legal aspects of the
business out of sight. The SRA is
concerned about losing visibility
of part of the legal services they
regulate.
It will make business think twice
about ABS licensing because
it could mean restructuring
processes simply to accommodate
the SRA, which is not what they
want to do.
Predictions for 2020

The increasing complexity
of law firm structures will
challenge the regulatory
framework.
A fundamental review of what
legal activities are regulated
will reshape the market.
Law firms and ABSs will adopt
marketing strategies much
more reminiscent of retail
operations.
Consolidation in the market will
be driven by demand from big
brands to have white-labelled
legal offerings.
The huge problem with traditional practices is the competing and

conflicting interests in the partnership.
Christina Blacklaws, The Co-operative
Funding
Do you plan to incorporate

to provide you with a currency
i.e. shares?
It would be an exaggeration to say that external

money is pouring into the legal market, but there
has been enough activity to date to suggest that
plenty more is to come. As well as Duke Street,
LDC and James Caans Hamilton Bradshaw
mentioned earlier there was Palamon Capital
Partners acquisition of high street brand
QualitySolicitors in autumn 2011.
But there are more than 10,000
law firms out there, a good
number of whom would love
external cash but do not have
the business case to convince an
investor. This could be because
they do not have a compelling
use for the money (compelling
to the investor, that is) or the
management and/or structure to
deliver the vision. Fewer than one
in three in our survey felt that they
had a good understanding of an
outside investors requirements.
Christina Blacklaws, who joined
The Co-operative from private
practice, acknowledges the
challenge for law firms trying
to compete without this kind of
backing. I had a vision when I
approached The Co-operative; to
bring that into reality requires a
small army. Its phenomenally
expensive and time-consuming
from resources that law firms
simply dont have.
The huge problem with traditional

practices is the competing
and conflicting interests in the
partnership. That really comes to
a head when the debate turns to
investment. Thats what ABS gives.
We are fortunate that we have
internal funding where we dont
have to compromise our integrity
or vision.
12%
21%
51%
n Yes
n Considering doing so
n No
n Uncertain
Do you feel you have a good

understanding of the requirements
of outside investors?
0%
It is, of course, a tension at the

heart of smaller partnerships
that the older partners eyeing up
retirement are far less enthusiastic
about loosening the purse strings
than their younger colleagues
looking to build for the future.
Kathryn Mortimer at DAS says
she is in the same position as
Ms Blacklaws. We have in the
insurance company a huge
infrastructure of IT, HR and other
facilities and we have access
to capital as we are not in the
legal environment of relying on
billing of cases and turnover
of legal fees. When youve got
a big company like DAS owning
16%
12%
28%
60%
n Yes
n To some extent
n No
n Uncertain
13
14
There is a tinge of sadness that some of the old

names are disappearing. Partners realise that
change is necessary for progress.
Shirley McIntosh, Partner, Baker Tilly
a law firm, the opportunities

are endless. We can invest in
expensive and long-term systems
for the business because we see it
as a long-term operation.
There is a longstanding fear
among solicitors that external
funding will lead to inappropriate,
unethical pressures being brought
to bear on them, although this
does seem to stem from a belief
that lawyers are in some way more
ethical than non-lawyers. The
ABS regime is highly regulated in
part to address this and Kathryn
Mortimer says the requirement
for ABSs to have compliance
officers in place one heading
up the legal practice and another
with oversight of finance and
administration is a useful tool.
With a role in an insurance
company I bridge that gap
between a lawyer in a law firm
and a lawyer in a non-law firm.
Insurance companies have a very
different culture to traditional law
firms so although not in our case
integration can pose all sorts
of problems. Insurance is more
focused around Financial Services
Authority regulation, underwriting
and claims ratios, whereas
lawyers are more concerned with
confidentiality, service and SRA
compliance.
There can be potential tensions
between lawyers and non-lawyers.
You have to have a very robust
compliance officer in a law firm
who can control non-lawyer
owners. Where there is non-
lawyer investment in, for example,

or retailers owning law firms,
there is greater need for strong
compliance as you have to be very
mindful of the penalties. (These
can be up to 200 million under
SRA rules, and up to 50 million
for individuals.)
The worlds first listed law firm,
Australias Slater & Gordon
which in 2012 acquired UK
firm Russell Jones & Walker
and recently added three more
personal injury practices to
its UK arm addresses the
possible conflict between client
and shareholder interests
directly, stating: Lawyers have a
primary duty to the courts and a
secondary duty to their clients.
These duties are paramount given
the nature of S&Gs business as
an incorporated legal practice.
There could be circumstances
in which the lawyers of S&G are
required to act in accordance
with these duties and against the
interest of S&G shareholders
and the short-term profitability
of S&G.
Bobby Dhanjal considers that
Financial Services Authority
regulation has been a lot tighter
than that of the SRA. Now the
SRA is adopting a more robust
style of regulation, Im going to
be bringing in a different way of
working where the environment
is that every single thing we do is
under scrutiny.
The legal sector is very strong

and I think the changes happening
to the legal landscape will create
more healthy competition. I do
believe theres going to be a
batch of solicitors firms that
dont make it it is down to the
individuals and how they run a
business. There is a lot of scope
for external investment in the legal
sector now, but the problem is to
invest, theres got to be something
of substance to put capital into.
Again, the firms that survive will
be because of the culture created
by individuals, not because of
takeovers.
The Scottish market is in a similar
state to that south of Hadrians
Wall, including suffering the
shock of an unexpected collapse
when Semple Fraser went into
administration in March.
There is a growing trend for AngloScottish mergers, with some firms
looking for the apparent safety of
a larger practice and then midsized firms thinking that they
need to do the same to remain
competitive. It has generally
been English firms taking over
smaller Scottish operations rather
than the other way round, and
while there is a tinge of sadness
that some of the old names are
disappearing, partners realise that
change is necessary for progress.
Karl Chapman of Riverview
Law has little truck with the
traditional model except for
the opportunities it presents to
his business. Historically youve
We dont know for sure whats going

to happen in the legal sector but
weve been talking about what an
equity investor would look for in our
business since 2006.
Paul Stothard, Chief Executive, Tees Solicitors
had law firms funding themselves

primarily through bank facilities,
whether loans to the partnership
or to individual partners. This is
changing rapidly as banks reassess the exposures they have
to law firms and as they change
the way they calculate risk. That
is why you are seeing, sadly, law
firms going bust.
Add to that, youve got totally
clean new entrants funding
themselves through equity and
other instruments, who are able
to operate in an entirely different
way. At the moment many are
biding their time, getting their
brains around what to do, but
there will be an influx of new
capital in the next three to
five years which will drive and
accelerate the changes already
happening. Some new entrants
will take advantage of distressed
law firms and others will back new
entrants on a scale people havent
seen before in the legal market.
It is, however, a dilemma facing
both sides that while funders
prefer proven business models,
the edge provided by ABS is much
more to do with development
models which, by definition, are
untested. It takes a particular kind
of investor to put their money into
a start-up which, to gain traction,
will need to grow quickly.
One firm trying to position itself
for the oncoming storm is Tees
Solicitors, a law firm turned ABS
with 200 staff in six offices across
the northern home counties.
Chief executive Paul Stothard

says: Weve checked what we are
doing from the start with potential
brokers and investors and taken
wise counsel on where we should
tinker or fundamentally shift the
business to become best-dressed
when any opportunities arise for
possible external investment.
I think theres a fear that
investors will come in with a
three-to-five-year exit plan, taking
substantial returns and that it
all gets a bit hard-nosed. The
clever ones recognise the return
is achieved through a number
of things in terms of quality of
people, how you manage them,
brand and efficiencies.
We dont know for sure whats
going to happen in the legal sector
but weve been talking about
what an equity investor would
look for in our business since
2006. It is not to say we want
external investment, but wed be
disappointed if we did and we
were not the best dressed at the
dance. It is like telling children
at school to pass all their exams
because it gives them more
opportunities. The more boxes
we can tick, the more options
we have. It is a work in progress
and we are having to do it at an
appropriate rate.
Talk of ABS always conjures up
the image of external investment
being the exciting end of the
possibilities although the
experience to date shows clearly
that cash is just one part of the
story. But those with an eye on

external equity need to present
themselves in a way that potential
investors can understand, while at
the same time understanding how
their own businesses are valued.
We find that firms which have a
strong business case have a fear
of striking a deal at the wrong
price this remains relatively
new ground in the law firm world.
Slater & Gordon paid around five
times earnings for Russell Jones &
Walker, which some see as a rule
of thumb to start on; in its more
recent acquisitions multiples of
3.54.5 have been used.
Matthew Briggs of Brilliant Law
says: Unless law firms start
to measure their performance
robustly then it is going to be an
issue for any outside investor.
It goes back to the quality of
internal management in law firms.
What are their internal financial
controls? Are they making prudent
financial decisions? Clearly with
the firms that have gone [under],
their financial rigour was flawed.
Karl Chapman adds: Irrespective
of ABS, new entrants and new
trade and equity investors, the
funding regime for law firms is
changing anyway because banks
are forcing it. From a law firm
perspective it really is the perfect
storm regulatory change plus
increased competition plus a weak
economy plus changed banking
arrangements plus a partnership
structure plus customer action
equals a maelstrom.
15
16
CASE STUDY
Brilliant Law
Brilliant Law describes itself as the first true
pure-bred ABS start-up.
Set up by non-lawyers, its principal investor is Bert
Black, the founder of Betfair and a man with an
82m fortune, according to the Sunday Times Rich
List. Having successfully disrupted the gaming
market, he is now turning his attentions to the law.
The firms aim is to act as a legal
best friend offering fixed-fee
legal services to businesses and
consumers. The initial focus is on
corporate work, with a series of
fixed-price packages for start-ups
and SMEs in addition to a pay as
you go menu of fixed-price ad hoc
services, along with downloadable
legal documents. The ambition is
to have up to 400 staff by 2016.
Chief executive Matthew Briggs
says: We run Brilliant Law as a
corporate enterprise with all the
things you would expect internal
controls, systems, objectives,
business plans and weekly cash
flow monitoring.
Our model appeals to investors
as we are able to measure
performance quite accurately. We
can predict, with a high degree of
certainty, our five-year business
plan and what we can deliver.
Those clear ratios give an investor
a good indication of return and
that is a key part of our business
model compared with traditional
practices.
As more ABSs come into the
market, they will be run and
managed in a more commercial
way, more robustly and with
a more intelligent internal
understanding. That will give
comfort and reassurance to
investors to know exactly what
they are getting involved in.
As explained earlier, this non-legal

background also means Brilliant
Law is looking at its routes to
market very differently, with digital
marketing high on its agenda. One
way that traditional law firms are
very primitive is in marketing
themselves, says Mr Briggs they
do not know how to explore and
exploit different techniques. It is
unlikely that many would recruit
the former head of marketing
at WeBuyAnyCar.com, as has
Brilliant Law.
Brilliant Law mainly works on
fixed fees but believes that not
everything can be done that way.
We still have a billable model,
but we understand the internal
dynamics of the sector and we
make sure the price is right
overlaid by what the market will
pay, says Mr Briggs. It is about
being profitable, yet still appealing
to the consumer.
Do traditional law firms really
fully understand how to measure
their internal metrics? And
added to that, do they have the
wherewithal or systems to deal
with that? As a pure-bred startup we intentionally put all these
things in place from day one and
built on them as the platform.

As both investors and law firms
better understand each others
requirements, investment will
flow more readily.
A process of natural selection
will thin out those without the
backing to compete.
A trade in law firms will
emerge as investors look to exit
with few law firms business
planning more than three years
ahead, fears over the regular
three-to-five-year investment
cycle will recede.
Law firms will adopt proper
performance metrics
If we are looking to 2020 and 2030, I think the one thing that is
certain is that services, in terms of the way they are delivered, or
the client experience, will be completely different.
Andrew Grech, Managing Director, Slater & Gordon
Delivery
If we are looking to 2020 and 2030, I think
the one thing that is certain is that services,
in terms of the way they are delivered, or the
client experience, will be completely different,
says Andrew Grech, managing director of
Slater & Gordon.
I know theres a big focus on
online as a delivery system and
of course thats very important,
but a much more fundamental
shift that is going on is really
about self-help. People now have a
willingness and ability to do things
for themselves that lawyers have
done for them previously.
That is both by helping
themselves using online as
a mechanism or tool, and by
getting greater confidence to
serve themselves in the legal
services area. So there will be
an increasing focus on enabling
people to help themselves.
Thanks a bundle
Unbundling legal services is
a hot issue right now, with the
contraction of the number of
people eligible for legal aid a
particular driver. It has been
endorsed by Law Society president
Lucy Scott-Moncrieff, who told
a legal aid conference in March
that solicitors should look at
offering clients advice on parts
of a case as well as traditional
retainers. The regulatory and
insurance challenges thrown

up by unbundling were not
insurmountable, she said,
although certainly there are
issues such as over the scope
of retainer that are being
investigated.
Yorkshire law firm Oxley & Coward
is one to take up the challenge,
recently launching a Pay as You
Go service for family law clients
who are no longer eligible for legal
aid. The scheme sees clients take
on some tasks normally done by a
solicitor, so that they only pay for
advice and professional experience
when needed.
The idea is that with clients
being the first point of contact
and dealing with documents and
administration, legal costs are
kept to a minimum. The firm
charges an agreed fixed fee for
representing Pay as You Go
clients at court.
Then there is a sole practitioner in
north London, Emel Hussein, who
has launched a business offering
a range of unbundled legal
services at fixed fees, including
17
17
18
Unbundling is a manifestation of one of the longer-term

trends in the law: separating process from value.
Rowan Williams, Head of Professional Practices Group,
London and South, Baker Tilly
consultations via Skype for people

who need help conducting their
own cases.
Her iSolicitorUK site offers a
web shop with a menu of fixedfee services, run by a team of
freelance lawyers working on a
fee-sharing basis and covering
a swathe of the south-east. As
well as face-to-face fixed-fee
case handling, iSolicitor includes
such services as a 50 Skype or
telephone consultation, lasting
at least 30 minutes, a 150
document check service for up to
10 documents, aimed at litigantsin-person, and a 65 one-off
letter before action service
in conjunction with the online
consultation.
Another driver is the expansion to
the UK of online legal document
assembly services such as
RocketLawyer and LegalZoom. The
danger has even been recognised
by the conservative American
Bar Association, which passed a
resolution earlier this year that
lawyers should offer unbundled
legal services to the public in
order to improve access to the law
and also to compete with these
services. It said that as well as
improving access to justice for a
rising number of self-represented
litigants, unbundling services
into more affordable chunks
would help lawyers expand their
client base.
Process servers
Unbundling is a manifestation of
one of the longer-term trends in
the law: separating process from
value. In the future there will be
little value in process that can
be done either by technology
or lower-cost, non-qualified
staff. Clients will, however, pay
for the substantive legal work
that requires expert advice
from a lawyer. This also raises
the difficult issue of how much
lawyers should give away for free
before starting to charge.
Andrew Grech says: I know that
there is a lot of focus on valuebased pricing and it is important
to constantly ask the question,
What is the value of this piece
of work to the client? Good firms
have been doing that for a long
time; theres nothing new or
revolutionary about that. The
more important change is an
attitudinal one, which is very
deep seated and does run
across the whole landscape of
users of legal services.
There is a much stronger
propensity for clients to want
to be in control and decide for
themselves how they will pay for
legal services and how fees for
legal services will be determined.
Our way of describing it is that
once the lawyer was king, now the
client is king. The transition the
profession is going through
is adapting in a fulsome way to
that idea.
Some firms have already made

that adaptation and some have to
some extent, and others still are
resisting it. But the acceptance of
that idea is fundamental to who
thrives and who will no longer be
able to thrive in the market.
That concept applies equally to
business clients, argues Karl
Chapman of Riverview Law,
and much of it comes back to
fixed pricing. He argues that
while regulatory reform was the
lightning rod, the real change
is being driven by customers.
Theyve had enough and suddenly
they have increasing choice. Just
one or two years ago the only
real choice for a general counsel
was to accept the hourly billing
model from all law firms or to do
it themselves in-house.
Now they have businesses like
Riverview Law providing highquality, cost-effective outsourced
solutions on a fixed-price basis.
The genie is out of the bottle and
hourly billing will never go back
in.
This is supported by a recent
survey of in-house lawyers at
large multinational companies,
conducted by City of London law
firm Field Fisher Waterhouse. It
found a widespread desire to move
away from the hourly rate model,
and for external law firms to share
risk.
Furthermore, an as-yetunpublished Legal Services Board
survey of the legal needs of some
9,000 small businesses will report
soon that just one in eight small

businesses believe that lawyers
provide a cost-effective solution to
legal problems. This suggests a
far larger unmet legal need
among SMEs than among the
general public.
Hit the road

One of the more advanced
examples of how delivery is
changing is the website Road
Traffic Representation, an online
legal service for those faced with
prosecution for motoring offences.
This uses artificial intelligence
through a question-and-answer
process to diagnose for free
not only the likely penalties for
the offences charged, but also the
potential for any defence.
It provides a range of low-cost
tools to help such as letters
of mitigation but if the visitor
then wants representation, the
site selects and appoints a
barrister and then automatically
briefs counsel by collating all
of the data collected during the
online process. It is at this point
that the visitor pays a fixed fee
for representation, i.e. pays for
what is valued and not for mere
process.
Its creator, solicitor Martin
Langan, argues that the traditional
model of legal services has
been sustained by mystique and
protectionism. Protectionism was
pulled down by the Legal Services
Act 2007, but he suggests that
many of the new entrants to the
market are making the most of
the status quo in terms of how

work is done, which still keeps
prices high even if they are
offered as fixed fees rather than
hourly rates.
He continues: The big game
changer is the power of
technology to pull back the
curtain of mystique. We largely
gave up paying scribes to read
and write for us centuries ago and
there is now no longer any reason
why we need to pay someone to
tell us what the law says and how
it can be applied. Many lawyers
still cling to the view that their
websites shouldnt give away the
Crown Jewels that is, they
should tempt you into the shop
but not tell you anything that will
make this unnecessary. This is a
view that will soon mean no one
will even bother to look in their
window.
Channel surfers
The key to delivery in the future
is choice. Tees Solicitors Paul
Stothard says: We are in a world
of choice where people want to
receive legal services as they
expect. Therell be categories and
sub-categories of people who will
demand a certain style of delivery.
That is either through web,
telephone, mobile devices, online
information. Therell be a place
for call centres. Some people will
be happy with receiving standard
forms because of the price
benefit. It is an accessibility and
value equation how much is this
transaction or issue worth to me?
Regulatory reform was the

lightning rod but the real
change is being driven by
customers.
Karl Chapman, Riverview Law
19
ABSs have created less

disruption in the market
than might have been
expected.
George Bull, National Chair of Professional
Practices Group, Baker Tilly
For Kathryn Mortimer at DAS,

however, not offering face-to-face
service is a way to keep fees very
competitive. We are quite focused
on commoditising legal services
where we will be delivering
services to the public over the
internet, or by telephone and
email and not through traditional
face-to-face client engagement,
she explains.
are we going to do? Pricing has

been one response and it is being
driven down all the time in certain
commoditised processes. The
genie is out of the bottle on the
true cost of some transactions.
The other inevitable response is
consolidation. Why? Because of
the cost savings associated with
it. At last firms are having to look
very carefully at cost.
The winners among legal service

providers will be those who
create whole-of-life relationships
with their customers. That will
represent a genuinely disruptive
force in the marketplace. To date,
ABSs have had insufficient time
to create those relationships so
have created less disruption in
the market than might have been
expected.
That means that we can offer

fixed-price services at very
competitive rates, because we are
not hampered by having to run an
office with a public front. I think
there is so much opportunity in
this area. Legal services in the
UK are worth about 26 billion
and 15 billion outside the City
of London so there is huge
potential.
Tees is also taking a more

aggressive stance. If new
entrants can come into law and
try and take our clients, then we
should be taking them on in their
own backyard. The firms next
move is to create a Tees umbrella
and begin to expand into other
industries.
The next generation of law

firms will not only have access
to completely new methods of
delivery of service but also to
the creative input of non-lawyers
coming at problem-solving from
a totally different angle. It is not
inconceivable that these nextgeneration law firms will provide
many of their non-contentious and
advisory services via dedicated
tablets given to each of their
clients.
The complication for traditional

law firms, says Mr Stothard, is
the new competition from brands.
The key with brands, which we
are just scratching the surface
of with Tees, is the consistency
of service. If Co-op, for example,
ports across to its legal offering
the consistency of service it offers
elsewhere, such as its funeral
care, then theyll win.
Mr Stothard adds: The
competition barriers to the legal
profession have gone, so what
Law firms know they need to be

looking at new ways of delivering
services but the problems for
many are a combination of limited
capital resources and the old
phrase they dont know what
they dont know. While law firms
believe they are forward-thinking
in their use of technology to
offer a better client experience,
nothing has really changed yet.
The challenge will come when
the next generation of law firms
think of extraordinary ways to use
technology to wow clients and
deliver routine legal services in
completely different ways.
Not offering face-to-face

service is a way to keep
fees very competitive.
Kathryn Mortimer, DAS
21
CASE STUDY
Co-operative Legal
Services
The Co-operative has been offering legal services
since 2006, taking advantage of rules for
membership organisations and also of the limited
nature of reserved legal activities.
It made clear its intention to
become an ABS early on and,
along with two small law firms,
Co-operative Legal Services (CLS)
was the first ABS to be licensed by
the SRA. Its preliminary results for
2012 showed that CLSs revenue
was up 12.8% to 33 million,
delivering a profit of 26,000
in this start-up phase, after
absorbing significant investment
for growth costs. This would
place CLS at 76th in The Lawyer
magazines table of the top 100
law firms by turnover.
In May 2012 CLS announced
plans to create 3,000 jobs over
five years in a bid to create the
largest consumer law business
in the country. Currently based
in Bristol, it will also open five
regional hubs across England
and Wales in addition to the new
family law operation in London.
Christina Blacklaws, CLSs
director of policy, says: We have
more of a retail model as we are
entirely consumer-focused. We
have a vision, we research that it
is going to work for our chosen
demographic, and then we build it
from there.
Research and development is not
a concept you hear very often in
the law. Maybe thats because
it is too costly and difficult
for traditional firms to do. Ms
Blacklaws says: What we have
is a 14 billion organisation that
is fully supporting us in research
and development to meet our
aspirations.
The clearest example of its

approach has been its new family
law service. It has won one of
two government national family
legal aid contracts to deliver a
telephone advice service for those
people still able to claim legal aid
help and 78 face-to-face contracts
across locations in England and
Wales. The network is made up
of its own offices, Co-operative
Bank branches, National Family
Mediation centres and its six
panel barristers chambers.
CLS established its family law
division in September 2012 and
Ms Blacklaws says it has helped
around 8,000 people since then,
providing around 250,000 worth
of free initial legal advice to those
not eligible for legal aid as part
of that. By the summer CLS will
have around 60 fee-earners doing
this work, making it probably the
largest family law practice in the
country.
It is all done on a fixed fee
(there are 87 different family
services) and Ms Blacklaws says
CLS is fully signed up to the
concept of unbundling. In family
law it provides self-help tools
supported by YouTube videos,
while in employment law they
are developing tools that aim
to resolve a dispute as early
as possible. It is part of CLSs
differentiator, she says: Were a
small part of a larger business
that has a different set of goals to
other businesses.
The solicitor recalls that the

administrative side of legal work
used to be quite soothing when
she was in private practice, but
adds: I dont think lawyers should
be paid for doing administrative
work or providing information that
should be freely available.

It will be clients who decide how
they receive their legal advice,
not their lawyers.
Unbundling will see greater
integration of legal and other
services; in time this could see
consumers build their advice
package online in the same way
that they do with holidays now.
Multi-disciplinary offerings
will help lawyers reclaim their
former role as hommes daffairs,
offering a wrap-around advice
service to clients.
The rise of the fixed fee seems
unstoppable and it will no
longer be calculated in such a
way as to deliver the same result
as the hourly rate.
Face-to-face advice will always
have its place, but it will be
much more closely integrated
with other delivery methods and
will become less frequents
22
Management and people

One of the less surprising trends from the last
three years and looking to the next seven is the
pressure on the partnership model. Terminology is
used loosely here while there remain examples of
big corporate organisations using the partnership
model to great effect, such as Goldman Sachs,
in the law it is shorthand for a non-corporate
way of operating (and indeed funding). This has
traditionally meant a solicitor doubling up as
the managing partner, juggling fee-earning and
management, with all other partners having their
say in the running of the partnership and, crucially,
taking all the profit out at the end of the year.
An increasing number of firms
have brought in non-lawyer
managers, in some cases making
them partners, but the idea
of collegiate decision-making
remains in many of these firms.
Weve taken the view that the
partnership model is dead, says
Paul Stothard, chief executive of
Tees Solicitors. We believe that
the only way businesses in
the legal sector will be able to
thrive and survive and attract
sufficient funding is to adopt a
corporate model.
We say that because new
entrants to the legal sector are not
limited by how much an individual
partner can raise. The partnership
model is not sustainable. Under
the Legal Services Act, new
entrants can have funding from
within reason anybody. There is

a more free flow of capital into the
sector than there ever was before.
Whats driven that are a few
things which came crashing
together. The Legal Services Act
opened the sector up and there
was the financial crisis of 2008.
That precipitated banks getting
twitchy and what weve seen in a
number of examples is that the
banks attitude towards the more
traditional structures has changed
quite dramatically.
The likes of Riverview Law and
Brilliant Law did not think twice
about setting up with corporate
structures. Mr Stothard an
accountant who is now in his
third law firm CEO role, after
Shoosmiths and what was then
Townsends knows the problems
Weve taken the view

that the partnership
model is dead.
Paul Stothard, Chief Executive, Tees Solicitors
of a traditional partnership better

than most.
Ive been a chief executive in
law firms since 1996. I think
that most law firms are managed
by lawyers perfectly well day to
day. The challenge they always
face is that within their peer
group apart from the biggest
firms they are still expected to
do client-facing work. Therefore,
management is fitted around the
day job. Operationally it probably
works fine and if something
drops, then they deal with it. But
strategic management requires
quality time spent on looking
forward to spot the problems/
opportunities early.
They are not advanced
motorists, planning the journey
and looking into the distance.
If they are fitting management
around the day job and suddenly
spot a hole in the road, then the
reaction is jerky and you get a
lot of travelsick people on board.
I would never suggest it is a
capability problem with lawyers;
it is a priority and time
availability issue.
Confused owners
For Kathryn Mortimer at DAS, nonlawyer management introduces
new ways of thinking. A positive
of non-lawyers owning law firms
is that they come with a different
strategic view of how a business
should be run. I say this as a
qualified solicitor some lawyers
are not always particularly good
businessmen. They are good at

running cases and generating
income, but in terms of running a
business, identifying procedures
to be streamlined, and investment
in systems to deliver legal services
in different ways, lawyers are not
leading that change, whereas if
you bring in a businessman to
run a law firm and if they are the
right person, then they can make
considerable improvements.
For all but a small number of law
firms there has been a continued
pressure on margins and this,
in turn, is forcing many firms to
move to a more corporate culture;
especially in the way they
reward partners.
Andrew Grech, managing director
of Slater & Gordon, reckons the
combination of lawyers and nonlawyers, constantly applying
themselves to the question of how
we can improve client service
has very much transformed our
approach.
He continues: The application of
more sophisticated management
thinking to making sure we
fully understand our clients
needs, desires and aspirations
is fundamental. And that is
true within some of the better
traditional magic circle law firms,
some of the new business models
that have popped up, and in some
of the leading consumer law firms
we consider ourselves among
that group.
Have you lost business to a

non-lawyer competitor?
7%
16%
51%
26%
n Yes
n No, but expect to
n Uncertain
Have you considered providing

non-legal services via an appropriate
non-lawyer party?
19%
18%
19%
44%
n Yes, actively pursuing

n Yes, considering doing so
n Havent considered this
n Wouldnt consider this
23
24
Riverview chief executive Karl

Chapman has little time for the
way traditional law firms are
managed: You can make a strong
argument that law firm partners
have confused ownership with
management and that they have
struck entirely the wrong balance
between income and capital. This
has huge knock-on consequences.
Most senior and managing
partners we speak with recognise
the need for change, indeed they
know what they need to do, but
the partnership model makes
it very hard for them to make
that change. At one level I feel
very frustrated for them. At a
competitive level, long may the
partnership model continue.
Making a law firm fit for the
emerging legal market will take
time, and requires two things that
most law firms dont have: the
appetite for significant cultural
and behavioural change, and a
balance sheet that can support
a people and technology restructuring. Most firms dont
have a strong balance sheet
because all the profit is
distributed to the partners at
the end of each year. They just
dont have the flexibility that wellcapitalised new entrants have.
People power
Last year, Edinburgh-based Fox &
Partners became the first law firm
in the country to be fully owned
by its employees. Founder Carol
Fox says: Within traditional law
firms the power is still taken by

very few people right at the top.
We have committees here at Fox
& Partners, it is about democracy
in the workplace with listening
lunches and allowing the staff to
bring any concerns to the fore.
In the next 20 years, if you want
to survive in the marketplace you
are going to have to deal with
things in a different way. There
is a crisis among some bigger
firms who are finding themselves
trying to take an outdated model
and examine how it functions
internally. An awful lot of firms
can be shockingly bad employers
and it is difficult to tackle that
culture.
People are reluctant to challenge
it because they see their career,
which they have worked so hard
for, on the line if they do. But I
would hope that it will change
maybe slower than I would like,
but weve set out on this path and
I want others in the legal sector
to follow us. Maybe our model
means we take more time having
to consult with everyone, but in
the end the result is much better
for all concerned. We are trying
to do something different here to
challenge that traditional model.
Fox & Partners is evidence that
as the approach to management
changes, so does the approach
to people more generally. Paul
Stothard says: As we go forward
in this firm and most firms
of a reasonable size having
someone dedicated to look after
You can make a strong argument

that law firm partners have
confused ownership with
management and that they have
struck entirely the wrong balance
between income and capital.
Karl Chapman, Chief Executive, Riverview
It used to be the case that the goal for a high flier was equity
partnership. The existing partnership model is still reliant on this.
However, aspirations are different now. We are frequently seeing
money or fame as the drivers.
Rowan Williams, Head of Professional Practices
Group, London and South, Baker Tilly
the finances is important but the

increasingly really enlightened
firms have recognised the need
to have someone who knows what
they are doing with people.
Karl Chapman highlights it as a
key priority: We work very hard in
our business to make sure that all
our team are in the same canoe,
with a paddle, going in the same
direction. In most law firms the
people are in different canoes,
some dont have paddles, those
that have are paddling in different
directions, and some jump over
board to swim to other law firm
canoes. The lateral hire model for
growing a law firm shows you how
fundamentally flawed the business
model actually is.
Succession planning is an
interesting area. It used to be
the case that the goal for a high
flier was equity partnership. The
existing partnership model is
(and the existing partners are)
still reliant on this. However,
aspirations are different now.
We are frequently seeing money
or fame as the drivers. This is
resulting in the requirement
to motivate and incentivise
people differently with innovative
remuneration systems. Equity
partnership is often not on the
shopping list. This is clearly going
to cause firms some financial
issues as existing partners retire
and withdraw their capital. You
will need to plan.
The average age of practising
certificate holders is increasing
each year, new admissions to the

roll were down 25% in 2012 and
new contracts offered in 2012
were only 76% of the admissions
figure. Its hard to see where the
next generation of partners is
going to come from, much less
how they are going to finance their
entry to partnership, assuming
they even want to be partners. In
fifteen years from now there will
probably be half as many firms
as many of the four-partner-andfewer firms (which make up 85%
of the total) simply fail to find
successors.
Pre-packs the new

retirement plan?
Many of the smaller firms around
the regions are caught in a trap.
The ageing partners cant retire
because they cant find new
partners to take over, cant close
because they cant afford the run
off insurance cover and cant sell
the business on because no one is
prepared to take on the successor
practice responsibilities. For these
firms, improbable as it would have
sounded two years ago, pre-packs
may offer the only way out.
Together forever
Bobby Dhanjal reckons that
the dynamics of working with
solicitors is different when
you come in from outside the
profession. You have got to have
solicitors working alongside you,
he says. If you are coming into
the legal sector and focusing
solely on price, the solicitors
will point out that you may be

disregarding the quality of advice
and customer service.
Change is likely to come to the
way lawyers are trained as a
result of the Legal Education and
Training Review, publication of
which was expected at the time
of writing. Mr Dhanjal welcomes
it: The industry is changing and
the way in which solicitors are
trained needs to change too. With
our firm, Im going to create a new
level in place of the traditional
paralegal. My staff will become
business development managers.
I want them given legal tasks at
an earlier stage, rather than just
administration, to see how well
their skills can adapt to becoming
a trainee solicitor.
I want them to become proactive
trainees going out and getting
business, rather than the
traditional reactive solicitors of
the old model. By having this
programme for the continued
professional development of our
staff, it will better prepare them
for the changing legal world where
you need to have more business
acumen.
At Brilliant Law, Matthew Briggs
says: If you want to have a
long-term model in the legal
sector, a number of things are
going to have to change. That is
strategically how you manage,
plan and execute it and making
sure the right people are in
the right roles, not necessarily
solicitors.
25
26
Some roles in larger providers will have very little

or nothing to do with law, and more to do with risk
management, project management, technological
solutions and pure service considerations.
James Atkin, Head of Legal, Risk and Compliance,
Co-operative Legal Services (CLS)
Lawyers need to fulfil the work,

but it requires experts around
them to make sure the business is
run beyond just being a law firm.
A firm needs to take the view that
what it is running is a corporate
enterprise which just so happens
to provide legal services.
I want to push boundaries on
client service but the converse
is that solicitors need to engage
with a more entrepreneurial
commercial environment which
sees things quite differently to a
traditional practice. The things
we do here dont get taught
commonly in traditional firms.
It is fundamental to have the
right people in the right roles
in any business but in the
legal sector there is the added
dimension of having the correct
structure, but ensuring the
personalities and professional
relationships are appropriate.
At Brilliant Law a stereotypical
insular lawyer will not fit in we
are entrepreneurs here and they
need drive and vision.
This is leading to the creation of
new types of job, as predicted by
Professor Richard Susskind in his
book The End of Lawyers?. The
likes of Riverview, Co-operative
Legal Services and Parabis are
demanding a new approach
to educating and training new
lawyers as they create different
roles for them, such as project
management and data analysis.
Riverview is creating a host of new

roles all of which need some
degree of legal knowledge such
as project managers, scoping and
pricing analysts, management
information and data analysts,
knowledge management
specialists and client managers.
Some of the best people weve
got are senior lawyers doing legal
workflow and process analysis,
says Karl Chapman. However,
legal competence is only part of
the picture. Clients need to know
what to do with the advice to give
it any value.
Co-operative Legal Services is
launching a Learning Academy
later this year that will offer all
staff training for a range of skills
and qualifications, including
becoming qualified lawyers.
Speaking last year at a Legal
Education and Training Review
event, James Atkin, head of legal,
risk and compliance at CLS,
predicted that ABSs in particular
are likely to employ and train
specific skills for specific elements
of client interaction and service
delivery, including behavioural
as well as technical skills; while
some roles will require detailed
legal knowledge, others will
demand a broad but relatively
modest knowledge of a large
number of legal areas.
This isnt to say career
development opportunities will
be limited. There will be a greater
range of roles, opportunities to
move between them, internal
training opportunities, more
on the job training, and

opportunities to manage teams
which perform these new roles.
It ought to be easier to get a first
foot on the ladder without having a
qualifying law degree, post-degree
qualification and training contract
or equivalent.
Mr Atkin said that legal services
roles will increasingly focus on
limited aspects of the customer
or operational journey, such as
advice, sales, operations, audit
and reporting. Some roles in
larger providers will have very little
or nothing to do with law, and
more to do with risk management,
project management,
technological solutions and pure
service considerations.
He said future provision should
make appropriate training and
qualifications available for the
wider variety of customer-facing
roles we will see. This means
behavioural as well as technical
skills have to be developed.
27
CASE STUDY
Fox & Partners

Fox & Partners in Edinburgh broke new ground for
the legal profession last year by becoming the first
law firm wholly owned by its employees. All of the
firms 10 staff have an ownership stake in the new
entity, as well as full representation within new
management arrangements.
The firm specialises in claimant
employment and equality matters,
and all legal work will be carried
out by the separate independent
law firm Fox Solicitors. Fox &
Partners has also joined a family
of employee-owned businesses
under the umbrella of Baxi
Partnership, a company that helps
to fund, establish and support
such companies.
The firm is run by a management
board made up of representatives
from every area of the business,
ensuring that legal, administrative
and support staff all have a say in
its direction and strategy.
Founder Carol Fox says: I
come from a background in
employment rights with a law
degree specialising in employment
and discrimination law. Having
got into the position of setting
up a firm of my own, I wanted to
practise what I preach and treat
everyone with respect through a
model which reflects those values.
Employee-ownership enables that
vision.
Ive worked in three different law
firms and didnt feel comfortable
with a hierarchy where only a few
equity partners took the rewards
for everyone elses hard work.
I believe there are very serious
issues in traditional law firms

with how they treat women the
internal workings leave a lot to be
desired. I wanted to do something
entirely different.
I certainly hope that this model
can help change the way the legal
sector is run. What we are seeing
is the death of the traditional law
firm. They are all trying to merge
to stay alive, but just merging an
old structure with another old
structure wont work.
Weve stood back and looked at
the market with imagination and
creativity by involving all staff and
sharing the rewards more fairly.
Research shows the benefits of
employee ownership come from
the difference in team work and
atmosphere among staff. The
difference between this model and
other new models like an ABS is
that employee-ownership is not
just about the bottom line. It is
about how you treat people so
they want to work hard to share
in the success. The ABS model
is more about enabling different
players to come into the market...
But there remains this hierarchy,
which is not examining any of
those key values we stand for.
The employee-ownership model
is a real opportunity to address
those issues. We should be

looking again at a different way,
particularly in the legal profession
where we are bound by a code
of ethics. It is a good bedrock to
build upon thats the theory.

Who a lawyer is will change
significantly as a range of roles
develop within legal businesses
that do not involve directly
providing legal advice; nonlawyer owners in particular
will look at what a person
brings to the business, not their
qualification.
Skills such as project and
process management will be
critical to the future success of
firms.
Regulation will focus on the
entitys activity, rather than
the various individual legal
professionals.
The idea of partnership
bestowing ownership rights
in the same way as it does
currently will die out.
New competition will not be shackled by historic cultural barriers. This inability to deal with cultural
change is what is hampering many law firms efforts to move with the times.
Steve Carter, Head of Professional Practices Group, North, Baker Tilly
28
International
Apart from Australian law firm Slater & Gordon,
as yet there are no other ABSs of an international
nature (although DAS is owned by Munich Re).
One coming soon should be Italian multidisciplinary firm Pirola Pennuto Zei & Associati,
which wants to allow accountants and lawyers in its
London partnership to share revenues and profits.
The firm, which was established
in the early 1980s, provides
legal and tax advisory services. It
has an annual turnover of 100
million (82 million), 160 lawyers
and 320 tax advisers, with nine
offices in Italy and one in Beijing
in addition to London, which
opened in 2011. The firm says the
decision to apply for ABS status
opens up the possibility to offer
tax compliance and accounting
services.
Announcing the application
last year, London partner Colin
Jamieson said: The Italian legal
market is very different to the UK.
While we could provide a full range
of business services in the UK, we
would have to keep the financials
separate. So we have decided to
apply to become an ABS to allow
us to ensure we can build a fully
integrated office here, providing
a full range of multi-disciplinary
services.
Closer to home, Scotland will have
its own form of ABSs although
non-solicitors will only be able

to hold a minority stake later
this year. It is not yet clear how
the 49% ceiling will play out
in practice, although some are
already looking at ways to get
around it.
Leading private client practice
Turcan Connell has been on
record for some time as wanting
to become an ABS so that it can
promote non-lawyer personnel.
There have been quite a few
enquiries of the Law Society
of Scotland, but more about
the Turcan Connell model than
external investment, says
Shirley McIntosh, Tax Partner
at Baker Tilly.
Back in 2011, a report for the
SRA indicated that it had already
received strong interest in ABS
investment from abroad and from
non-English law firms that want to
use the structure. They included,
it said, one of Chinas largest
law firms, which was planning
to open an office in London as
2013 Legal Innovation Report 29
part of a long-term plan leading

eventually to the creation of an
ABS targeting Chinese investors
to the UK with a one-stop shop of
professional advisers, including
solicitors.
The reports author, Alison Hook,
who is now the SRAs international
adviser, says that two years down
the line the interest is still there,
but nothing has really gathered
pace. Theres a real sense
internationally that people are
waiting and seeing, she says.
The reality is that becoming an
ABS is of limited value to overseas
firms unless they are looking
to enter the English and Welsh
market given that they would
need to have a solicitor owner and
conduct reserved legal activities
to be eligible. You can do a lot
of things as a foreign lawyer
in England and Wales without
needing to be regulated,
Ms Hook observes.
I dont see a queue of other
Slater & Gordons. If someone
comes up with an exciting new
way of doing corporate practice
through an ABS, however, then
people will sit up and take notice.
Where I do see more international
interest, she continues, is in
governments and regulators
outside of Europe looking at the
experience here and developing
their own ideas. Countries such
as Canada and Singapore are
investigating ABSs, although in
many others, law firm structures
need to develop a long way before
they could even begin to think

about ABSs.
But of particular interest is
the forthcoming report by the
European Commission on the
Establishment Directive, the piece
of legislation that facilitates the
movement of lawyers across
EU borders. Ms Hook says the
commission has been looking at
ABSs. Europe is an increasing
patchwork in terms of non-lawyer
involvement in law firms, with
a growing number of countries
allowing a limited percentage of
non-lawyer partners. It makes
a mockery of any idea of a
single market. The European
Commission is aware of the
sensitivities and likely resistance
to the adoption of the ABS model
outside the UK, but is nonetheless
interested in promoting more
flexibility in law firm structures.
Certainly resistance continues
the German Federal Bar has been
a vociferous opponent of ABSs
since the Legal Services Bill was
going through Parliament in 2006,
arguing that non-lawyer ownership
represents a serious threat to
the independence of lawyers
working at such firms. It has said
repeatedly that ABSs will not be
allowed to practise in Germany.
Meanwhile, the body representing
the 179 French bar associations
last year passed a resolution that
ABSs cannot be viewed as law
firms and will not be allowed to
operate in France. The Conseil
National des Barreaux said ABSs
conflict with the independence

of the legal profession. The
decision was made even though
French avocats have, since 2011,
been able to set up a form of
multi-disciplinary practice with
some other professions, such as
accountants and notaries. It is
likely to mean that if an English
firm with a Paris operation
became an ABS, it would need
to find a structure to isolate the
French arm from it.
It is a similar story across the
Atlantic, where an American Bar
Association (ABA) investigation
into limited forms of ABS
excluding the prospect of passive
non-lawyer ownership was
gradually watered down to the
point where it dropped plans
for any changes to its policy
prohibiting the non-lawyer
ownership of law firms altogether.
The case had not been made
for proceeding with the reform,
its Commission on Ethics 20/20
decided.
The plans to open up ownership
were strongly opposed by a group
of nine leading general counsel in
the US, who argued that it would
damage lawyers professionalism.
They said the proposal opened the
door to arrangements that make
the practice of law more
like other businesses and less
like the distinct profession it has
always been.
Also last year, New York lawyers
were banned from running
the Big Apple office of a UK
29
30
There will be a definite but slow move to opening up ownership

structures for law firms generally, but particularly stylised in the
form of the UK legislation.
Andrew Grech, Managing Director, Slater & Gordon
ABS with non-lawyer owners,

following a decision by the New
York State Bars committee on
professional ethics. It said such
an arrangement would fall foul of
a rule which forbids a lawyer from
sharing fees with a non-lawyer,
and from practising law for profit
with an entity that includes a nonlawyer owner or member.
The opinion said this would be the
case even if the New York lawyer
was dual-qualified as an English
solicitor. However, a separate
opinion issued last year means
that a New York lawyer could be a
member of an ABS if working in
England and Wales.
These stances will only increase
the caution of the largest City of
London law firms towards external
investment and goes some of
the way to explain why none of
the biggest firms have thus far
embraced ABS status. It is no
surprise that a challenge by New
York-based national personal
injury firm Jacoby & Meyers
against the bans on external
investment in New York, New
Jersey and Connecticut is being
watched so intently.
Andrew Grech, managing director
of Slater & Gordon, predicts that
there will be a definite but slow
move to opening up ownership
structures for law firms generally,
but particularly stylised in the

form of the UK legislation. Weve
had a number of delegations from
law societies in Singapore, Hong
Kong, Malaysia and law firms in
China who have come to visit with
us to talk through the practical
implications of non-lawyer and
in our case public ownership of
law firms. They are all in various
stages of preparation of reports
into whether they should go down
that path or not.
He continues: Theres a very
mixed level of understanding
of what it entails. Broadly, it is
an education process and in my
experience it will be many years
before it bears fruit. I dont believe
we will see sweeping changes
occur quickly, but I do believe
it is set on an inevitable course
towards the UK regulatory model.
The real question is whether it
takes five, 10 or 15 years.
We are seeing some changes
take place already. For example,
the Malaysian parliament passed
some legislation several months
ago to make it easier for foreign
law firms to practise domestic
law in Malaysia. Its a first step,
but I think demonstrates that the
process of change undertaken
in Australia and the UK is now
underway.
One of Riverview Laws first

moves after launching in February
2012 was to open an office in
New York to act as a conduit for
US companies needing English
legal advice. One of the great
opportunities for the English legal
system is that it is at the forefront
of the change in the legal market
which will inevitably roll around
the world. The only question is
time frame, says Karl Chapman.
We get lots of contact from
international players wanting
to engage with us. They see
us almost like a research and
development incubator for what
they see happening at some point
in their markets. They want to
know what models are working
and how to deploy them in their
domestic territory.
In the next five to 10 years, UK
legal businesses can carve out
a bigger world share. It helps
that, along with the US, people
want access to the English courts
because they are seen as fair.
Combine this with the changes
occurring now, and we are
ahead of the curve collectively
as an industry. It is a dramatic
opportunity to explore.
To the future
Have you changed your firms plan or

strategy due to the Legal Services Act?
How much do consumers understand about

the changes, and what difference has that
understanding made? Does the consumer actually
want change and if so is the profession absolutely
clear about what this looks like? There is a danger
that businesses can spend much time, cost and
effort reinventing themselves, only to find that the
consumer doesnt want to buy whats on offer.
5%
39%
47%
9%
We need to think about the next
generation of consumers, too,
and how they will want to engage
with their legal service providers.
Where will they see the value?
Management teams making these
predictions may not be in the
same generation and so need to
think carefully about this. We are
already in the Age of App where
consumers want to use internetbased solutions to deal with dayto-day issues themselves. They
are doing this now to an extent
we couldnt have anticipated ten
years ago so how can we predict
the development of technology
solutions ten years from now?
The ball has started rolling and
we can only see it gathering
pace over the years to come.
In a few months there will be
around 300 ABSs and as the
number and variety grows, they
will become more everyday and
assimilated into the legal culture.
From those roots many trees
and branches will grow. There
are around 11,000 law firms

in England and Wales, the vast
majority having four partners or
fewer. That the number of such
firms will fall in the coming years
seems beyond doubt; the only
question is how steeply it will do
so. The established high street
law firm with deep roots in its
community should still have a
place, but nobody can afford to
ignore what is going on around
them. Our survey shows that most
firms either have changed or will
change their strategy due to the
Legal Services Act, although views
remain very divided on whether
the Act will have a positive effect
on respondents businesses.
Paul Stothard of Tees Solicitors
says: If it is a road, then therell
be a few wrecks along the side,
some of them new models and
others existing models that didnt
make it. The better analogy is
probably the airline industry.
Freddy Laker tried to take on
British Airways as the first low-
n Yes
n No, but expect to
n Uncertain
Do you think your business

will have changed significantly
in 18 months time?
2%
14%
67%
n Yes, significantly
n To some extent
n No
n Uncertain
17%
31
32
cost operator, but the big boys

rallied and he failed. But now
we have budget airlines in every
country, some of the big boys are
still running, but others have had
to merge or disappear because
they couldnt compete.
In the legal sector, theyll
be all sorts of innovations as
people compete, therell be a
consolidated market and the
really good firms at the top will
still be there.
While nobody should be ignoring
what is happening, a large swathe
of solicitors are still doing so,
whether wilfully or not. But society
is changing so fast, driven by
technology that could not have
been imagined when the current
crop of managing partners
were growing up and qualifying,
that it is inconceivable the legal
profession alone can resist the
tide of change.
And it is not as if the law is at
the cutting edge. It is striking
that moves that are considered
innovative in the legal market
are commonplace in other
sectors. Matthew Briggs of
Brilliant Law expects the market
to look radically different in

five years time as a result of
greater competition. Increased
competition will improve
consumer choice and therefore
reduce prices. What we are
doing at Brilliant Law is based
on consumer research and, to a
degree, common sense.
Youve got consumer-centric
people coming into the sector
and a consumer who wants to
procure services in a different
way. Price is a massive factor, but
also transparency and certainty.
At the moment people dont feel
they get value for money. The
incumbents are not painting
with a broad brush delivering or
understanding what the consumer
generally wants.
The legal sector has not had to
change for hundreds of years as
it has been a closed shop with
high barriers to entry. Those have
now changed. Innovators can
come into the sector and do it in a
different way.
And do it they will.
Will the Legal Services Act have a

positive effect on your business?
19%
30%
n Yes
n To some extent
n No
n Uncertain
14%
37%
33
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and Markets Act 2000 but we are able in certain circumstances to offer a limited range of investment services because we are members of the Institute of Chartered Accountants in England and Wales. We can provide these investment
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1

2013 Legal Innovation Report

Legal Innovation Report 2013

It has subsequently become

2013 Legal Innovation Report

patent agent, trade mark attorney,

ABSs the journey so far

Stobarts entry to the law

Legal Innovation Report 2013

Businesses that would not have thought of providing legal

to expanding into other areas of

ABSs have come at just the right

Only a few years ago having

2013 Legal Innovation Report

Private equity is becoming

This brought with it the rise of

individuals. Its six private investors

company secretarial services

Legal Innovation Report 2013

No large firm has yet unveiled

and to regulate ABSs will, if

2013 Legal Innovation Report

Have you put a new structure in place

Do you have non-lawyer management

Would you consider having an outside

n No, but expect to

n No, but expect to

n No, dont expect to

n No, dont expect to

Finally, there are the entirely new

team), while a third would not

There are examples of innovation

So what havent we seen?

ABS-related activity among

But, in the main, no large firm

Legal Innovation Report 2013

2013 Legal Innovation Report

Outsourcing what activities are

The SRA put restrictions on

Having to work within the

Chris Ward, Managing Director, Abbey

Legal Innovation Report 2013

For the SRA, the rule prevents

In the meantime, Mr Kenny said

Starting from scratch

The recent changes to

2013 Legal Innovation Report 11

New tools and ideas may

An advantage new entrants to

such as insurance brokers and

The ABS Bobby Dhanjal Legal

litigation work. I argued that PPI

Predictions for 2020

2013 Legal Innovation Report

The huge problem with traditional practices is the competing and

Do you plan to incorporate

It would be an exaggeration to say that external

The huge problem with traditional

Do you feel you have a good

It is, of course, a tension at the

Legal Innovation Report 2013

There is a tinge of sadness that some of the old

Outsourcing what activities are