Law firms will withstand ABS impact, the Law Society reports.

Small law firms will be able to survive in the face of alternative business structures (ABS), according to a report commissioned by the Law Society.

The report found that although there will be a detrimental impact for some existing firms, particularly those providing a ‘commodity’ to clients such as bulk conveyancing, many small firms will withstand the competition that ABSs will bring.

Factors such as how established a firm is within its local community and how specialised their area of law is, could contribute to a firm maintaining its share of the market when confronted with ABSs.

The research, carried out by Oxera, found that many small firms had already survived in the face of larger centralised firms within their community. It acknowledged that there will be an inevitable shift away from ‘small provider, face to face’ advice, however some solicitors interviewed for the report suggested that firms working in specialised areas of law that are not compatible with remote access legal advice, may be able to differentiate themselves from the work of large businesses. The suggestion was made that providing specialised advice to clients who prefer face to face contact, such as the elderly or disabled clients, may be the advantage of smaller firms.

Although it was noted that many solicitors felt ABSs would force smaller firms out of the market, those solicitors were less pessimistic about their own firm, believing that their firms strong branding within the local community would protect them against larger firms that offer a more remote advisory service.

The research also found that there appeared to be a large concentration in the number of small law firms in local communities compared to Post Offices, banks, pharmacies and GP surgeries, and concluded that a reduction in the number of firms would not make a considerable difference to access to justice within the local community.

Law Society Chief Executive, Desmond Hudson, referred to the report as ‘useful’ in helping understand the future of the legal sector in the face of ABSs, however he also emphasised the importance of regulators playing their part by putting into place the necessary safeguards.

Posted 16.07.10