Supermarket Law

By | 28th May 2010

Which is the odd one out in the list below?

  1. There’s no place like ASDA
  2. You shop, we drop
  3. Your M&S
  4. Law firm goes public
  5. Buy one get one free – (BOGOF)
  6. Every little helps!

Like all good quiz questions, there is a catch. In fact, there is no odd one out.

They are all supermarket strap lines and while you may have thought the reference to the law firm was a clue that this one was the odd one out, it is in fact a nod in the direction of what has become known as Tesco Law and one possible effect of the Legal Services Act 2007 the provisions of which come into force in 2010 and 2011.

As a result of the Act, law firms will this year be able to sell up to 25% of the business to non lawyers and from 2011 will be able to reorganise their structures. As the Act has it, this is all to “encourage more effective competition and (to allow firms) to provide a range of services to consumers, increasing access to justice…”

Commentators believe that the 2011 changes will allow law firms to sell shares and merge with other businesses or even float on the stock market like Australian law firm Slater & Gordon in 2007.

Supermarkets are widely expected to offer legal services to the public along with the weekly shopping. My recently married daughter asked me the other day about making a will and announced that she would get a form from Tesco something which I believe would have been unthinkable only a few years ago.

Recent press reports [Law firms take up the supermarket challenge, The Times May 20th] suggest that we should be calling this process Co-op Law rather than Tesco Law as the Co-op is hiring lawyers and is predicting a turnover of £200 million within a few years. The Halifax is also getting in on the act and more than 200 law firms have signed up to relaunch their services under the brand name QualitySolicitors to provide no frills legal advice in a number of areas.

However, as The Times report suggests, it is the Co-op which is taking the lead following its purchase of Somerfield in 2008 and the merging of its financial services business with the Britannia Building Society in 2009.

Where are Richard Branson and his Virgin empire? They cannot be far behind.

If all this happens as the likes of Tesco, Halifax, Co-op and others predict, there is a real risk of law firms being left behind. As Professor Stephen Mayson says they may wake up one morning and wonder where a chunk of their business has gone.

If this sounds familiar, I suggest that we have seen it all before when the accountants successfully moved their tanks onto law firms’ lawns in the 1960s and 1970s and took over a large part of the regular tax work traditionally done by lawyers.

The man in the brown coat who ran the ironmongers in the village where I was born is long gone. The thrill of fingering boxes of nails and seeing the gleaming purchase weighed before handing over a penny has been replaced by the plastic bags of ready sorted nails in a supermarket or chain store.

The message is clear. If you do not want to lose a significant part of your business you need to take steps to ensure that others do not offer similar services at a more competitive price and in a more easily accessible manner than you are able to do.

If it is true for the corner shop, it is true in legal services and my guess is that it will be true in the e-disclosure world too.

Talking earlier this week to a US lawyer who is an acknowledged leader in the field of E Data, I was not altogether surprised to learn that her experience was that while clients are not carrying out much processing of electronic documents in house, they are increasingly looking to outsource to expert providers in the field. While these experts may be found in law firms, this is by no means always the case and clients are less and less happy with the concept of paying their lawyers to learn about something in which they are not expert and for which they will then charge large fees. Clients realise that this kind of work can be and is being done by experts so that only the processed results are given to the lawyers to work on. Less time is thus spent with the lawyers whose fees are then reduced.

There are, of course, exceptions to this and some lawyers are expert at the whole area of in house electronic document processing but there are many who are not. Lawyers who wish to avoid the fate of the man in the brown coat or the law firms who do nothing and wake up too late to find their business diminished need to become expert or go to an expert.

There are experts out there and they are ready to help and the courts are already encouraging this approach.

Vorsprung durch Technik as someone once remarked!