UK Legal Sektor

A lot of hot air has been expended on the state of the legal sector and possible solutions.

On the one hand we have proponents of ABS saying that new corporate entrants to the market will have sufficient capital to bring down the cost of supplying a legal service to the client and the ABS will cut a swathe through law firms.

On the other hand we have proponents of virtual law firms saying that their way is the way forward – a virtual firm who will supply Solicitors for given projects or one off issues at a reduced cost as they are not carrying the fixed cost of premises -an outsourced and virtual model.

There is alot of talk about law firm structure and technology infrastructure but precious little talk about what a client might want. It’s not that difficult. A client wants a trusted adviser.

We can learn from John Lewis, the most trusted brand in the UK.

Why is this?

They are a partnership, who pay their staff well, divide their profits fairly and promise their customers value and exceptional service – some messages here for the legal profession, in particular about gaining trust by dividing profits fairly, offering value, delivering exceptional service and pricing fairly.

A Solicitor is a trusted adviser.

He or she is trusted to:

  • Know their stuff.
  • Be suitably qualified and experienced.
  • Be properly regulated and adhere to professional standards.
  • Give practical and sensible advice.
  • Act in the client’s best interests.
  • Charge fairly and proportionately.
  • Act promptly.

The UK public does not have a lot of regard for financial institutions or indeed big business. Russell Brand’s comments resonated with the public because politicians are seen to be in the pocket of finance and large corporates and policy is seen to be influenced by corporate lobbying or vested interest. An ABS associated with a large corporate or a financial institution has a major obstacle to overcome with a potential client, that obstacle is trust. Financial institutions are not trusted. The scale of PPI claims gives an indication of the fact that a bank will sell you a product that you don’t need, is overpriced and is not fit for purpose. Why would a client go to an ABS for a will? They’d probably end up with a will, an overpriced funeral costs plan and life insurance.

The virtual model of lawyers operating in the cloud has a similar but different obstacle. In order to win business a potential client needs to trust you. Trust is usually  built up by meeting one another face to face. Clients prefer face to face interaction, particularly new clients. Face to face interaction takes place in offices. Not having an office or an office geographically available for a potential client is a major obstacle to winning trust and therefore winning a new client, particularly a non-business client. There is the argument that Skype offers face to face interaction but Skype is dependant on a number of variables that are outside the lawyer’s control- both parties having suitable equipment, both parties having a suitable connection, both parties having Skype, both parties being comfortable with technology. Bricks and mortar law firms can use Skype in any event so that is not a USP.

As a small, niche firm we focus on being a trusted adviser. By concentrating on being a trusted adviser, clients are retained, potential clients are referred and business proceeds according to plan. As a small firm we have a major advantage in that we are nimble and able to respond to competitive threats. We develop products to stay ahead and ensure we add value. All our employer clients, for example, have their own unique access to their own PJH Law employment law portal that has bespoke document creation wizards, a document bank, a library of PJH Law e-learning course and a bespoke learner management system which enables each employer to track the progress of their employees through each course.

Law firms, particularly small or local firms, can survive and prosper by focussing on being a trusted adviser and by being nimble enough to utilise technology to offer clients a better service than an ABS or cloud based firm can offer.

If law firms can create value for their clients, ensure they are a trusted adviser, they will survive and prosper.

If law firms and law firm partners insist on retaining excessive profits, have charges that are disproportionate to the value added and do not utilise technology to create new products and bring down the cost of providing their current service then their competitive position vis a vis ABS may be eroded, despite the trust obstacle.