A time for reflection or a time for action?

With increasing change affecting the legal sector, what predictions are in store for the profession in 2015 and beyond? Are law firms finally realising that their profession is changing beyond recognition?

A significant number of firms have approached me in the past few months for help with their future strategy. Issues that have been around for some time, but have been conveniently ignored
in the past few years, seem to have found their way back to the top of the agenda. The partners looking to retire are now older, yet the same issues of exit and succession planning are still there. Following the collapse of the conveyancing market and the economy in 2008, many firms battened down the hatches and, as interest rates have been consistently low for several years, many have been able to service their bank borrowings.

This year has seen an injection of an estimated £300m worth
of partner capital loans into practices and an increase in conveyancing instructions across the country. Calls looking for a solution are coming thick and fast, with what seems an inevitable trend towards resolving some of their fundamental issues. Perhaps it is the fact that this additional capital has given these firms confidence that it is now time
to act.

Outsourcing will become the norm in many progressive firms that are embracing change. Outsourcing could well be telephony, secretarial, cashiers
or more fundamentally offshored legal work. PI and conveyancing has been offshored for many years by firms at the cutting edge,
but this is now available to high street firms - a progression not to be ignored. MyHomeMove, an
online provider of conveyancing services, is targeting 10 per cent of the UK market and is threatening to dominate the conveyancing work by offshoring the work to India, so why would
a regional law firm not feel threatened? But what is on the horizon?

Consumer credit licences

Consumer credit licences look
like they will be regulated by the Financial Conduct Authority (FCA) and any firm providing payment terms to their private clients for legal work could well fall foul
of providing consumer credit
and therefore need a licence.
For example, if you run a family practice, do you allow your clients to pay you when the property
is sold or do you offer stage payments? If you do, you will probably need a new consumer credit licence. For many years the Law Society provided blanket cover to all solicitors firms, but this was rescinded in October this year. The SRA has stated they will not be in a position to regulate these licences, so this now means that most law firms providing any form of extended payment terms will need a consumer credit licence. There is a huge difference between the old Office of Fair Trading regulator and the FCA.
All applications will need to be completed and approved by
April 2015 as things stand. The regulation just keeps on coming.

ABS opportunities

The new breed of legal services providers in their gleaming alternative business structures (ABS) have not necessarily been
a success. Let's look at the early entrants - Quality Solicitors, Co-op, Quindell and Parabis are all now facing significant challenges in their business models.

Does this mean that ABSs should be ignored? Definitely not.

The opportunity for smaller regional firms to become ABSs and work with an accountant, estate agent, independent financial adviser or barrister should not be ignored, both as
a solution to any working capital requirement and as a new way
of generating business.

In fact, this could well be the answer to many a law firm's woes - ignore it at your peril.

2015 will come and go and the legal profession will trundle along in the same slow style; however, those firms that 'get it' are growing. Progressive firms with inbound call centres handling social media and professional inquiries are converting over
40 per cent more business. Both national and regional firms are reaping the benefits and those firms that ignore these solutions are probably not going to be around with in the next five years.

What will your firm resolve to change in 2015? SJ

Merry Christmas, and a happy
new year

Viv Williams is the CEO of 360 Legal Group