Lawyers expect more MDPs and big brands to enter market – and they’re not happy about it

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24 November 2014

Survey: concerns that the law is becoming a factory process

Lawyers expect the opening up of the legal market to lead to more multi-disciplinary professional services companies, offering consultancy, business and legal advice, research has shown.

But the survey of 506 legal professionals by London law firm Hodge Jones & Allen (HJA) identified continuing widespread concerns about new entrants and the opening up of ownership to non-lawyers.

Some 89% of the respondents – who were largely managing partners and partners of law firms – believed that such multi-disciplinary businesses will become an expanding feature of the market, while 72% think that consumer brands will soon enter the market “in a significant way”.

Indeed, 79% reckoned that “international super brands” will emerge.

One partner told the survey: “Competition from new, well-funded entrants to the market will transform the way we provide legal services to private individuals, but this will come at a significant cost to the traditional high street.”

HJA’s Innovation in Law report found that 81% of respondents agreed that “having shareholders will mean that commercial criteria will dominate over professional criteria in decision-making”, although the figure was a bit lower for those working in larger practices and in commercial law.

Almost all predicted that, directly as a result of new entrants to the market, management will start to be dominated by non-legally qualified staff.

The report said: “Although they were not asked whether this was a positive, negative or neutral change, nearly nine in 10 agreed new entrants would lead to an ‘inevitable commoditisation of legal services’.”

The poll found strong support for the notion that legal practices are better managed than they were five years ago, while most also considered that IT had been better used over that time.

It said there was widespread agreement that the use of IT has improved outcomes for clients – and that both the quality of service and value for money has got better – while many think it has also improved commercial efficiency.

Although most backed the greater use of IT to drive down costs to clients, this also raised concerns. The report said: “There is a worry among many legal professionals that IT is becoming the tail that is wagging the legal dog; 63% agree with the statement ‘IT is starting to define legal practices, rather than be an aid to legal professionals’.

“This concern may be part of a broader concern that there is a deskilling of some component parts in the legal process, and that legal practices are introducing elements of a factory process, in the drive for greater efficiency.”

The report said HJA’s view is that “innovation in how we manage our practices is not an option; it is an absolute necessity in the face of the economic environment, intensifying competition, and regulatory and funding changes… To deny these changes are going to happen is like Canute denying the sea; they will happen and we need to embrace them, and individually and collectively invent for ourselves a better future.”

Last month HJA outlined the ‘continuous improvement programme’ that it has begun to change the way it operates, including the introduction of predictive modelling for its personal injury work.

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