New entrants, new rules

The launch by Saga last week of a stand-alone legal expenses insurance product has added sudden, critical momentum to the liberalisation of legal services in Britain.

This time last year, practitioners' fears crystallised around alternative business structures and ownership of law firms by non-lawyers. The main threat however is not coming from the change in corporate structures. This is only the catalyst which is prompting a growing number of consumer brands to expand into the provision of legal services.

The fact that Saga has applied to become an ABS is almost immaterial in the context of their strategic decision to expand into the legal protection market. What is relevant is their database of 8m individuals, including 2.7m customers, many of whom already have before-the-event legal insurance as an add-on to either home or motor insurance.

Saga's news also comes just two weeks after Co-operative Legal Services launched its family law service in London, adding to its existing range of online and phone-based legal products. Co-op's membership has grown from 2.7m in 2007 to 7.2m last year, with plans to reach 20m in 2020.

At present, the combined customer base of just these two organisations is 15.2m individuals. This is nearly a third of the whole adult population in Britain, which the ONS estimates at 49.9m. Of course there may be some overlap, and in the case of Saga, the figure includes past and prospective customers. But it gives you an idea of the scale of the potential. Saga is in the further advantageous position that its natural market is growing. In 1985 the over-65s accounted for 15 per cent of the population; this figure is expected to grow to 23 per cent by 2035.

What's more, unlike existing off-the-shelf precedents, these new entrants will be building up their legal credentials on the basis of client service. Whether it is face to face or by phone, customers will have direct interaction with another human being. Some of the advisers will be lawyers but in the main they will be trained support professionals helping callers or visitors to lodge a claim or fill in a form '“ like a triage operation for legal advice. This will place the concept of customer service in a whole new light which will have less to do with legal competence and more with the overall customer experience