More consolidation and more closures are likely in the local and national legal sector as the full impact of the Legal Services Act is felt, predicts Atteys’ new chief executive, Charles Glover.
“There are 10,000 law firms in the country and 85 per cent of them have four partners or less. It’s a very fragmented market and there are many reasons why we will see more leave,” he says.
Pressure on small high street firms and sole practitioners has been stepped up by:
Increasing complexity which makes it is more difficult for generalists to maintain expertise in all aspects of the law.
The commoditisation of some aspects of the law by web-based legal services companies.
Rocketing professional indemnity premiums - up by anything between 70 and 150 per cent for some practitioners.
The trend for organisations ranging from local authorities to major banks to set up panels of favoured legal services providers which often favour larger law firms.
Glover also points out that the way lawyers have based their charges on the time taken to carry out their work subsidised the inefficient because the longer a lawyer took to complete a task, the more they got paid.
The transparency of web-based fees will put the tardy under presure to sharpen up their act or shut up shop.
“I think the Legal Services Act is a very positive thing,” says Charles Glover. “It’s a really exciting opportunity.
“There will be casualties, but the result will be legal services that are more relevant, more efficient and more appropriate for the market.”