For sale signs will soon be hanging outside solicitors’ practices. Owning a law firm can be satisfying but why would anyone want to buy one? The answer is one dimensional: to make money.
The Government will start pushing the Legal Services Bill through Parliament next month and one of its key features is that, by the end of 2008, non-lawyers will be able to take a stake in a practice. Regulated buyers – surveyors, accountants, actuaries – will be allowed a small holding to begin with, but in time anyone will be able to buy a law firm. Private equity, corporate financiers and flotation-merchants have been drumming up interest for the past 12 months. And the word is that many firms are already a long way down the track in grooming themselves for a sale.
Until now, you’ve had to be a solicitor to own a stake in a law firm, and the Government doesn’t like this. Against consumer interests, the argument goes. It stifles competition, and the level of complaints against lawyers is proof positive that the closed shop works against the consumer. Be that as it may, our legal system is much admired, is probably better than in most other countries and solicitors have to some degree helped create this international reputation. Of course, everyone has some horror tale about fees or delays (or maybe just about losing), but to sweep away the current regime and replace it with something new, based only on an assertion that things will be better, seems a high-risk strategy.
Why take the risk? Cynics might suspect the Government sees a chance to undermine the independence of lawyers, with the siren call of consumer interests providing an excuse. Independence in this context arises out of solicitors having duties to others – to the courts, for example – that override personal business interests and sometimes the short- term interests of a particular client. It need not follow that diluting ownership of a firm by allowing outside interests will mean professional duties become less important. But those obligations that distinguish a profession from something that is just a business sit uncomfortably with the sole aim of outside investors – making money.
It is this that will drive consolidation. Tesco, the Co-op, the Halifax and a few others have the financial power and the brand values to buy or build firms, providing services that are process driven – consumer complaints, debt collection, immigration, employment, per-sonal injury. And in a few years we might have just four or five law firms in England, most probably serving the public from call centres. “Press 1 for a broken leg, 2 if you want to sue your employer, or hold while we connect you with an adviser. All calls are charged at a premium rate”.