It has been ten years since the Legal Services Act gained Royal Assent, ushering in the most liberal services market in the world by some margin. Given that span of time, and the five years since the most radical elements of the act came into force with the regime for alternative business structures (ABS), it is natural to ask if it has lived up to billing.
There clearly was an impact of sorts, supporting an environment where new business models and fresh thinking were encouraged. That renewed the legal ambitions of the accountants, encouraged the pioneering UK launch of Slater and Gordon, and made Co-op as close as we have got to Tesco law. After a slow initial start there are now over 700 licensed ABSs in England and Wales, representing a significant chunk of the market. Also significant is the messy regulatory fallout and ongoing turf war that it triggered, which has continued with varying degrees of intensity ever since.
And yet it is impossible to escape the conclusion that the 2007 act has so far had surprisingly limited impact on the dynamics of the industry. Many of the current experiments seen in the profession are variations on themes evident in the 1990s and early 2000s. Tech-driven volume arms, automation and locum lawyering had been achieved without statute.
As yet we have only three UK law firms with a domestic stock market listing – Gateley in 2015 and Gordon Dadds and Keystone Law 2017 respectively – while several of New Law’s most touted pioneers, among them Slater and Gordon, Co-op and Parabis, suffered high-profile reversals. Even the much-touted accountants have yet to get anywhere near justifying the claims made for them. Irwin Mitchell is yet to float or tap private equity and Gateley, ranking 48th in the Legal Business 100 is still the largest UK practice to seek outside capital.
These days it is mandatory for law firms to market relentlessly on innovation, even as such material is stretched ever-more thinly. New Law providers have had less impact than expected because they have been better at delivering new models than cutting the price of services.
But the biggest criticism of the Legal Services Act saga is that it has done adjacent to nothing for the ill-served retail consumers whom it was supposed to aid. As the Competition and Markets Authority concluded last December after a year-long review, occasional users of legal services struggle to find a decent product at a reasonable price.
The irresistible pressure for change in the legal industry forever strikes the immovable object of professional conservatism and market realities of non-discretionary, distressed purchasing, which is what law is.
Perhaps a targeted attempt to create price transparency in retail services would have an impact but we would also need major consumer brands to enter the legal market to genuinely move the dial. Ten years on the Legal Services Act is long on laudable aims, still short on results.