Affect of Law Firm Ownership Rules

Since November 2006 it has not been legally required for solicitors firms to be owned by registered solicitors, something that was previously necessary. This effectively means that anyone can be the owner of a law firm, although the legal services themselves have to be performed by solicitors.
The reason for this bill was to improve access to legal service for all. This works on the basis that more competition leads to lower prices, which in turn makes it more accessible. This has led to some corporations such as banks and insurance companies starting to offer such services, with more expected to in future. It is thought that people will be less intimidated going to a company they know rather than a professional law firm. There are many affects, both positive and negative, that this could have on the legal sector.
Most of the companies who are likely to offer these services will probably be outsourcing the legal work rather than employing their own solicitors. Work on a case by case basis could be outsourced to individual lawyers looking for extra work. This circuit government would mean only having to pay for the lawyers when necessary rather than paying an annual salary, therefore reducing the cost and the price they charge. This will likely lead to more freelance solicitors, so it will be good for some solicitors.
Some fear that these new “law firms” will provide less of a quality service. The personal touch that a clients individual solicitor can provide may be lost if they are effectively dealing with a large corporation. How much contact will there be between the client and the solicitors dealing with their case? This will depend on how each specific company runs these legal services. Whether people choose to use these companies or traditional law firms may come down to a matter of trust. Some might be more wiling to trust a company they already use for their shopping, banking or insurance, but others may prefer to trust specialist professional law firms.
Small firms are the ones most likely to suffer from this legislation. Large firms who charge large fees are likely to survive as their big clients will still be wiling to pay. Clients with small cases who would normally use a small law firm may go for a cheaper option instead, thus putting smaller firms in danger of going out of business. If offering legal services then proves non-profitable to non-legal companies and they relinquish these services then it could eventually mean that legal services become less accessible than at present.
It is possible that the whole banking sector could change with different types of law firms focussing on different areas of law. It is likely that large corporate and criminal cases will still be dealt with by specialist law firms. With corporate law businesses are likely to want to have ongoing relationships with their firm. This new type of law firm are more likely to focus on individual client services.
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