Lawyers must embrace wider 'professional services' approach
By Sr Duran-Corretjer Duran-Corretjer
Developing a new business mindset and joined-up advice is essential to survival
Lawyers need to move away from thinking narrowly in terms of legal services and start embracing a wider professional services outlook if they are to survive in the new era of liberalised services, the SRA’s policy director has warned.
‘Seeing the market as one for professional services rather than simply as legal or business advisory is part of the key to thinking about what customers want as we go forward,’ Crispin Passmore said in a speech last Friday.
Referring to new business models ushered in in the wake of the Legal Services Act, Passmore said much of the change was being driven by purchasers of professional services. ‘They want services that are more personal, more tailored to them, and more affordable. It’s a tough challenge to meet for any business but one you have to rise to if you want to survive and thrive.’
Addressing delegates at SIFA’s 25th anniversary reception, Passmore said the legal services sector contributed around £25bn a year to the UK economy. ‘But when you look at the wider market – including the £4bn contributed by financial advisers – it’s even bigger. The true scale of the market becomes clear, with professional services accounting for around 17 per cent of the annual GDP.’
The one-stop shop approach has long been an argument in support of multi-disciplinary partnerships, allowing businesses to deliver legal, financial, and other services seamlessly. Passmore further advocated its take-up among law firms and financial advisers.
‘Increasingly consumers want a one-stop solution to their problems. They don’t have financial or legal problems; they have issues,’ he said, before commenting that putting responsibilities on consumers to make the decision about whether to approach a legal services firm, a financial adviser, or an accountancy firm was ‘an odd thing for the supply side of the market to do’.
‘We need to make our services more relevant and accessible to those that buy them. That means joining up those services wherever we can,’ he added.
SRA research has highlighted the extent of unmet legal needs to justify further reform such as the setting up of a register including information on complaints and insurance claims data. This, Passmore continued, suggested that the legal services market was neither as big nor as successful as it could be if it could respond to the needs of individual consumers and businesses.
‘We know businesses are more likely to call their accountants when they need legal advice, rather than their lawyers. It’s not something legal services should be proud of, in my view,’ he commented.
But aside from facilitating market access and reducing the administrative burden on providers, there was only so much the regulator could do, Passmore went on. While the SRA could make it easier for providers to come together, ‘it’s only legal services providers and others that can make the decision to run their businesses in a way that meets those unmet legal needs and joins up services as customers want’.
To date, two-thirds of alternative business structures are large organisations, including three of the big four accountancy firms. PwC, which was approved as an ABS in 2014, is now a top 100 law firm. But Passmore pointed out that the remaining third, smaller businesses, also took advantage of the new rules, such as financial planning firm Chesterton House, which bought Woolley, Beardsleys & Bosworth Solicitors in January.
ABSs, Passmore added, had also shown they were more innovative than traditional law firms and unregulated legal services providers. They made it possible not only for external capital to flow into firms but also for new ideas and expertise to come into the sector – ‘the idea that you have ongoing relationships with your clients, experience of retail, and technological solutions’.
‘Whether you’re focusing on high professional standards, being approachable, encouraging an open and diverse culture, or using IT, it doesn’t really matter what that strength is, but bringing different people from different background practices and different professions that can coalesce around your business’s unique selling point – this is what seems to us to be part of the growing choice for consumers and businesses to make their choices.’
Jean-Yves Gilg is editor in chief at Solicitors Journal