There is a £15bn market in consumer and small business legal services and big brands “have the potential to dominate” it in the future, a senior representative of Royal Bank of Scotland (RBS) said this week.
John Muncey, head of Mentor services at RBS, said research shows that more than half of consumers are prepared to buy legal services from non-lawyers and 60% are likely to use a bank. RBS values the consumer legal market at £12bn and the SME market at £3bn.
Mr Muncey said the Legal Services Act represented a “huge opportunity” for RBS. However, while it is expanding its current legal offering and “fulfils key consumer buying criteria of legal experience and security”, Mr Muncey predicted that the bank is unlikely to be at the vanguard of opening up the market because it has other priorities arising from the banking crisis, such as shedding its toxic assets.
Speaking at the conference on the opportunities for banks, insurers and big brands in the Legal Services Act, organised earlier this week by Epoq Legal and Plexus Law, he added that RBS’s management was also concerned about alienating existing legal clients by competing with them.
RBS offers Mentor, a regulatory compliance service , to 14,000 business, as well as RiskRemedy, an online, self-service employment law and health and safety compliance package for SMEs. Mr Muncey pointed out that RBS had not needed to wait for the Legal Services Act to enter the market; Mentor began in 1996. “Legal providers did not capitalise and regulatory consultancies took off,” he said. “The relationship with RBS Group allowed us to grow and become a very successful standalone business.” He said their experience was that they could “outsource the end-to-end product more effectively” than doing it in-house. RBS works with Epoq among others in delivering its services.
Though RBS is “unlikely to be a trailblazer in the legal services market”, Mr Muncey envisaged the bank introducing personal legal cover for the first time and possibly adopting more SME and personal legal services through “low-risk bundles”, such as business services offerings, packaged accounts and insurance. Mentor also provides RBS with a “platform to build strategic alliances”, he added. This would open up new distribution channels.
Also at the conference, CPP Group unveiled its plans to enter the consumer legal market (see story).