Law firms changing tack says Baker Tilly
A QUARTER of law firms expect to change their business strategy in response to the major changes in the market place, according to research by business advisers Baker Tilly.
The figures show an increase over the last three years in the number of firms that expect to change their strategy – up from 9% in 2010, to 25% in 2013.
The report also revealed a drop in the number of law firms that believed the 2007 Legal Services Act will have a positive effect on their business, with 21% saying they expected the legislation to have a positive impact in 2010, compared to a much lower 14% in 2013.
The Legal Services Act allowed for the first time the creation of alternative business structures (ABS), which allowed external ownership of legal businesses.
The 36-page report entitled ‘Legal Innovation 2013’ reviews the changing landscape for the legal services sector, studying how businesses have changed their structure, funding, service delivery, management and people.
Despite private equity firm LDC’s investment in insurance firm Keoghs and AIM-listed Abbey Protection’s February swoop for small Manchester commercial practice Lewis Hymanson Small , Baker Tilly says that the landscape for business law firms has not changed fundamentally.
Steve Carter, Baker Tilly’s head of professional practices for the North region said: “It is clear that the UK legal market is now undergoing palpable change in some quarters as it reacts to regulatory change and the shifting business climate.
“We are now seeing a lot of rather innovative legal businesses starting up and those who run law firms are gradually changing their attitude, with more conceding that they may need to adjust their strategy.’
“The biggest shifts have been in the personal injury market where the regulatory change has been greatest. Elsewhere in the legal sector, most notably those providing legal services to businesses, new legal business models are starting to emerge. However on balance these have not proven attractive to investors and any innovation that has taken place has not yet made a substantial impact.
“This is particularly evident among legal businesses providing services to business clients where we have not yet seen a real game changer enter the market.”
