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www.pannone.com The Legal Services Act – what does it all mean? Charles Layfield 14 July 2011
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www.pannone.com A decade of ignorance 2001 OFT report on competition in the professions 2004 Clementi report 2005 DCA White Paper – Future of Legal Services 2007 Legal Services Act 2011 6 th October
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www.pannone.com Objectives of the LSA Ensuring a common baseline of regulatory compliance Better redress through a new ombudsman Deregulation and greater competition
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www.pannone.com What is an ABS? A licensing framework for reserved activities where ownership is 10%+ nonlawyers No new structures as such An alternative to a law firm wholly owned by lawyers Ownership by nonlawyers carrying out a reserved activity
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www.pannone.com Reserved activities Conveyancing Probate Notarial Commissioner for oath functions Rights to conduct litigation Rights of audience Will writing?
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www.pannone.com Requirements of an ABS At least one nonlawyer as a shareholder or member Head of Legal Practice Head of Finance & Administration Both have statutory regulatory & reporting duties Integrity of the ABS rests with the HoLP
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www.pannone.com Nonlawyers - why become an ABS? Own and operate a law firm Share or own the revenue/profit Greater control over the supply chain Define the customer journey Competitive advantage
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www.pannone.com Lawyers – why become an ABS? Allow “internal” nonlawyer managers into ownership Enter into business with “external” nonlawyers - clients Realise value of capital shares Receive capital for growth
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www.pannone.com Investment for growth Acquire firms, teams or people Market positioning/economies of scale Invest in infrastructure eg, IT or premises
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www.pannone.com Why most law firms aren’t attractive Traditional partnership model not a corporate one Firms won’t tolerate external direction Resistance to change Risk averse High profile failures Too much baggage
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www.pannone.com What law firms are attractive Scalable and repeat business – a low IP rating Key personnel not important to servicing the work Corporate structure and/or small management team Solid client base & long term relationships/contracts
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www.pannone.com Example ABS models Co-Op & Endsleigh DAS & Capita IM Slater & Gordon
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www.pannone.com The perfect storm Economic conditions Public funding cuts Restricted traditional funding Fragmented market Massive inefficiencies Impact of IT & commoditisation Outsourcing Jackson
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www.pannone.com What does all of this mean? A market ripe for new entrants Greater focus on partnership opportunities Greater reliance upon IT & commoditisation Massive consolidation at all levels Greater competition
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www.pannone.com Pannone take on LSA opportunities Creation of Pannone Affinity Solutions Connect2Law Outsourcing – LPO & BPO
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www.pannone.com Pannone Affinity Solutions Complete range of consumer/commercial legal services Tailored & flexible service managed within a distinct arm Volume & bespoke UK wide face to face coverage Contact centre & legal helpline function Focus on service delivered as well as work done
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www.pannone.com Connect2Law The UK’s leading legal referral and support network 2,270 law firm members Referral network Support network Hub franchise
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www.pannone.com Outsourcing Connect2Law BPO provider LPO provider
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www.pannone.com What’s the outcome? New entrants in ABS form More white labelled solutions/partnerships Acquisition of law firms Investment in mid tier firms operating volume Owner manager and work introducer ABS’s Legal franchises & networks MDP’s
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www.pannone.com How will the LSA affect you? Know your market and the impact of these changes Absolute strategic objectives What do you need to meet your objectives Only then consider an ABS
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www.pannone.com EXCELLENCE AND ENERGY IN ALL THAT WE DO
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