Survey says law firms unconvinced by Legal Services Act – 43% of law firm turkeys vote for Christmas?
One year on and less than 10% of solicitors think the Legal Services Act will do anything to improve clients’ ability to access conveyancing services, according to a national survey of legal firms by property search provider SearchFlow. However, at the same time more than half (57%) of firms admit they would consider becoming an ABS or are still undecided, with just 43% saying they’ve ruled it out.
Regionally, 43% of firms in the North West said they would possibly consider becoming an ABS, with central London firms the least likely to be considering becoming an ABS (80%). Nevertheless, when looking at how firms are planning to adapt to the arrival of ABSs, 23% of London firms are planning to increase their marketing spend compared to 15% nationally. Overall, 12% of firms are now planning to change their practice areas and 10% are expecting to begin to offer fixed fees.
While 14% of firms believe that in the next year the increased competition from ABSs is the greatest threat to conveyancing, 28% thought the main threat would come from lender’s panel selection decisions (28%).
Richard Hinton, Business Development Director at SearchFlow, said: “In terms of the licensing of new forms of legal practice to deliver legal services, the impact of the Legal Services Act has been slow in the year since launch. More changes are expected to be felt in the coming 12 months, and more than half of all firms have not ruled out becoming an ABS.
“It was interesting to note that just 20% of central London firms would consider becoming an ABS. Some of them possibly feel there is less incentive for them to do so as they already have alliances and volumes of business that make them feel more protected in comparison to other parts of the country, but this could always change. The more immediate issues for solicitors are panel management and the weak property market, although it looks like ABSs will start to have more an impact over time.”
COMMENT: Interesting statistics but there again 25% of law firms are now limited companies. As for the refuseniks – the near hysterical reaction by some smaller firms (check out the Law Society Gazette’s comments page – http://www.lawgazette.co.uk/news/profit-a-dirty-word-law-says-dragon-s-den-judge?page=1 ) to James Caan’s remarks at the recent Strategic Leadership Forum that most lawyers don’t understand business finances and still fail to see the significance of profits over turnover/total billable hours, suggests many of the anti-ABS firms can’t read the writing on the wall.