When you’re looking for legal advice you might think a solicitor is the only place to turn, but that is now changing. The Legal Services Act allows non-legal suppliers such as banks and supermarkets to offer legal advice. The so-called ‘Tesco Law’ may mean you have more choice, but Rory MccGwire asks if it will be at the expense of quality
The Legal Services Act (LSA) has been described as a “Big Bang” moment for the legal profession, changing the whole basis on which legal services are provided.
Before 2012, the only people who could own a firm of solicitors and give most types of legal advice to third parties were solicitors. Post-LSA, anyone can own a firm of solicitors ― including, for example, banks and supermarkets ― which is why the changes are commonly referred to as the ‘Tesco Law’. So where does this leave small firms seeking legal advice?
At first glance, opening up the provision of legal services to other sectors may seem like a good thing. It means increased competition, low-cost legal services and ultimately more choice for small firms seeking help ― doesn’t it?
The reality is that what many small-business clients will receive is legal advice from a production line — the ‘factory law’ approach. If you are seeking advice on a straightforward legal issue or want a quick reassurance you are following the correct procedure, then it may suit your needs.
Technology and call centres have long since turned many parts of the legal services market into this production line ― take the insurance industry, for example. Here, large teams staffed mainly with inexpensive paralegals plough through huge volumes of repetitive legal work. They settle some claims and contest others, all according to set criteria.
And this process-driven approach has spread into other parts of the law, such as debt recovery. Not only have prices for this work fallen, but fixed or capped prices are increasingly becoming the norm.
One of the supermarkets had already built itself a strong position in the legal services market (previous legislation allowed the provision of some services such as will writing). The Co-op has been the UK market leader in funeral services for a long time and offers the legal element too ― wills and probate advice.
When, some time ago, I called up The Co-operative Legal Services to test it out, I was confronted with an automated call handling system. “Press 1 if you are enquiring about probate or estate administration” and so on. I got to “Press 4…”, before I was irritated enough to give up. But if I did not have a solicitor and I was looking for a low-cost service, I might well have opted for this type of approach.
However, the majority of business decisions involving legal advice are too critical to leave to filling out an online form or speaking to a call centre handler. Most small firms still need to get specialist commercial legal advice from a solicitor, relating to their particular issue.
It’s the provision of personal legal services to consumers that is primarily affected by the LSA. Some business law was already available off-the-shelf — for example, as part of a fixed price legal insurance package. This continues, but additional commercial legal services are gradually being offered by the factory law providers.
As someone who has run his own business for more than 21 years, I go to a lot of trouble to pick which individual is going to give me specialist advice on a particular legal matter ― whether it’s on employment law, intellectual property or simply extending a lease.
I’m not just looking for legal advice. I’m looking for commercial legal advice. And I’m looking for support in what can turn out to be an extremely stressful situation. For example, in the early days, when I lacked experience of the HR sagas that seem to be common in running any business, I felt exposed and vulnerable when it came to the plethora of employment regulations. So the thing that I prized most about my employment lawyer was his ability to calm all the doubts I had. He could tell me exactly what would happen in each situation, as he’d seen it all before, and with his sense of humour he managed to defuse even the most stressful situations.
So although the legal market is changing, and those of us that run businesses will enjoy more choice, more transparency and better value for money as time goes on, people like myself will still be looking for the same things ― a skilled, experienced lawyer who I trust and get on with, who can understand my particular needs and who will look after my best interests.
The best law firms provide free online guidance, so you can educate yourself before deciding whether or not to seek paid-for advice. The law firms which have collaborated to create the Law Donut content are prime examples of this value-added approach.
Everyone is a winner. Not only are the law firms’ own clients delighted by having access to 1,300 legal FAQs and a wealth of online information, but these same clients are recommending the legal resource to other businesses ― so the participating law firms are picking up new clients as a result.
“For us, the big differentiator is that we have a higher level of trained lawyers providing the advice than is going to be the model for factory, commoditised services,” says Rob Penrose, partner at Andrew Jackson Solicitors and Law Donut syndicator.
“Most of what we do is commercially orientated and most factory law providers aren’t targeting that at the moment, but in due course they will be. However, it’s one thing to pass work down and have it done at the lowest possible level, but quite another to maintain a high standard of service if you do that.
“I’ve seen a national firm pass work down to a paralegal and the work that’s produced is full of misunderstandings of the law. This simply wouldn’t happen if there was a more highly qualified lawyer doing it.
“It’s also not necessarily more expensive hiring a small or medium-sized law firm to do the work. The cost of using legal services from some of the employment providers can be far higher than using a traditional law firm, and isn’t of the same quality.
“If you’re seeking legal advice you should try to understand the exact nature of what you’re after. If you’re better informed when you instruct a law firm, then you’re going to get a far more positive outcome. Go online and look at websites such as the Law Donut, which provide a lot of free legal information. Then you’ll have a better understanding of exactly what legal advice you need.”