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Half of law firms 'open to the idea' of outside investor

25 October 2010

Half of all law firms are open to the idea of having an outside investor, a report by accountants Baker Tilly has shown.

The report, based on comments from over 100 solicitors and barristers, also indicated that 29 per cent of firms with 25 partners or less had already lost business to a non-lawyer competitor, compared to only 12 per cent of larger practices.

In response, 45 per cent of firms said they had changed their business plan or strategy because of the Legal Services Act, while a further 25 per cent expected to do so.

Nine per cent of firms said they would definitely consider having external ownership, while seven per cent were planning to incorporate.

George Bull, head of tax and professional practices at Baker Tilly, said that with the coalition government recently confirming its intention to push ahead with ABSs, no legal practice could ignore the potential impact.

“The time has come for lawyers to face up to the future,” he said. “The forces of competition are on the doorstep – and to some extent are already here – and law firms and barristers’ chambers need to take strategic decisions on how they are going to respond.

“The one thing lawyers cannot afford to do is nothing.”

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Contracts & Rights