Editor's blog | Blitzkrieg on the high street

It is rather old fashioned to declare war before opening hostilities. Like a letter before action in a weak case, calling the other party’s bluff one last time. But this is what QualitySolicitors’ founder, Craig Holt, did this week as he announced a tie up with US online legal platform LegalZoom.

The same day that Co-operative Legal Services unveiled the launch of its new family law service and the opening of its first office in London’s Paddington, Holt said legal services offered by funeral providers and supermarkets will be “faceless and entirely remote and miss the crucial local, personal element”.

There is a certain paradox in Holt making such pronouncement when he is partnering with one of the largest faceless, lawyer-less legal document businesses. More interesting though, is the response given by Co-op Legal Services director and seasoned family solicitor Christina Blacklaws.

Gliding over the former barrister’s remarks Blacklaws said Co-op’s strategy was being developed in response to clients’ needs. “Our members say they prefer to speak to a lawyer on the phone but we want to be able to give them the option to see a solicitor if this is what they say they would like”, she told Solicitors Journal. The plan, she explained, was to use the new Paddington base to test the market before considering possible expansion in the regions.

QualitySolicitors are looking to rapidly conquer a large slice of the market nationwide and online. Compared with this blitzkrieg approach, CLS’s strategy seems strangely muted. The reason for this is the funding structure.

The QualitySolicitors-LegalZoom partnership is entirely financed by private equity – Palamon Capital took a majority stake in QualitySolicitors in October last year and LegalZoom is owned by a clutch of investors, including Polaris Ventures and Kleiner Perkins Caulfield and Byers. These investors will probably want to extract value from the business in the next three to five years. In fact, Polaris was the main seller in LegalZoom’s aborted IPO last month, suggesting that they are either getting impatient or worried at the string of lawsuits brought against the business by local US bars. So Holt and his associates are in a hurry to grow the business.

Without the pressure of upfront investment, Co-op, on the other hand, has more time. Time to test the market and build foundations. It also has a lot more outlets that it can potentially sell legal services from than all QS firms combined. And even more importantly, it can weave legal services into the other professional services it already offers its 7.2m members. Like all other law firms, QS firms only do law. Co-op’s funeral and other services could be a much more effective slip road into the market in the long term.