So you’re coming to the end of your first year as COLP and things haven’t gone too badly so far, but don’t count your chickens (or geese) yet. Danger lies ahead – the Christmas season looms. Now’s the time to earn your compliance officer stripes; let’s risk assess the joy out of Christmas, snuff out spontaneity and spread caution amongst your fellow man.
If anyone wanted to see what alternative business structures can achieve, they need look no further than Slater & Gordon. If you take into account the sum announced as going towards buying Simpson Millar – a deal currently on ice – S&G has committed around £150m towards its UK expansion since first announcing the acquisition of Russell Jones & Walker in January 2012. Could it have achieved this without being a listed company? I’m no financial expert, but I doubt it; raising money through share issues has been key, although debt levels are up sharply as well.
Recent press coverage has suggested that it’s a sellers’ market for personal injury caseloads, with acquirers queuing up. Sellers just don’t realise it, and consequently don’t receive a fair value for their files. I would like to offer a more balanced view and suggest this is something of a misnomer and can in fact be quite damaging to sellers. There may well be a significant number of firms aspiring to be acquirers out there, but the reality is the vast majority of these are either day-dreamers or tyre-kickers.
It’s been more than a decade since the last Law Society special general meeting (SGM), called by high-profile civil liberties solicitor Imran Khan over the Kamlesh Bahl affair and allegations of institutional racism. Though very different, next month’s SGM, debating a motion of no confidence in the president and chief executive, also goes to the heart of Chancery Lane, if not quite as painfully. I am not going to debate the rights and wrongs of the Law Society’s position on criminal legal aid. What I will say is that is that it did not make the easy choice by deciding to negotiate with the government – that would have been to fall into line with the absolute opposition of the specialist criminal solicitor groups and the bar.
The issue of insisting on lay chairs to head of the frontline legal regulators, as was proposed by the Legal Services Board (LSB) in a consultation that ends next week, has sparked predictable opposition among the targeted regulators. That the LSB should try to push through such a potentially explosive change to internal governance rules at a time when it has just been pummelled in a series of bruising responses submitted to the Ministry of Justice’s regulatory review, shows bullishness on the part of the oversight regulator.
In many industry sectors, comparison and review websites are one of the main channels through which a business can connect with its customers. Who hasn’t checked out reviews of a film, book or washing machine before typing in our card details and proceeding to the checkout? But, how relevant are they for people choosing a solicitor?
Two months ago, I blogged about the Law Society’s surprising submission to the Ministry of Justice’s legal regulation review, which essentially argued for a return to self-regulation, save that disciplinary and enforcement activities would remain the preserve of a much slimmed-down Solicitors Regulation Authority. I was not convinced by the argument then, and I’m not now. But I’m revisiting this issue because from talking to senior figures in the profession, I have a clear sense of growing confidence that the Lord Chancellor, Chris Grayling, is thinking their way. One told me to expect an announcement as soon as January.
With more than 200 law firms having failed to secure professional indemnity insurance, it is highly likely that this will include a number with personal injury WIP books. Will this create a buyers’ or sellers’ market? The spotlight on the injury sector is shining again following the recent announcement that high-profile serious injury and clinical negligence specialists Harris Cartier entered into a pre-pack deal with prolifically acquisitive firm Neil Hudgell Solicitors. This was followed by Manchester firm Taylor Legal. This was another firm that failed to secure PII, and included a small number of personal injury files.
We are six months on from my blog ‘Private equity and the law – big bang or damp squib’, and I am looking at the success of the forecasts I made then. First, I predicted that probate would be the ‘hot’ sector for 2013. This is because it’s a sizable sector with commodity type work, which is very fragmented and generally not very competitively priced. The only drawback is that because the market is so fragmented, there’s a limited number of platform firms to acquire, from which to consolidate.
Staffordshire legal practice Hacking Ashton LLP, which was one of the first 100 firms to register as an alternative business structure, recently closed its doors in the first high-profile demise of any SRA-regulated firm operating under the new business model. The first failure of an ABS may cause those currently seeking a licence to ask whether it remains commercially viable. The novelty value of an ABS ought not to disguise the fact that any structure must be based on a sound and viable business model, yet the failure of Hacking Ashton leaves us asking if liberalisation will be the panacea to the current ills of the industry or simply a damaging distraction.