Tuesday 1 September 2009

Legal: How Tesco law will revolutionise

The Legal Services Act (LSA) 2007, which has attracted the label 'Tesco law' to reflect the dramatic manner in which ownership and investment will be liberalised by 2012.

The Act allows for the formation of alternative business structures to provide legal services, rather than the current partnership model, where ownership is shared among senior lawyers. It means Tesco could start selling wills and personal injury lawsuits alongside the fruit and veg.

Despite the fact Tesco has yet to make its intentions clear, the label has stuck. Supermarkets, banks and insurers are expected to begin selling legal services - bringing consumer marketing insight to the process.

The Act will also, for the first time, enable external investors to own shares in law firms. The UK legal services market is worth a staggering £20bn and offers mouthwatering margins.
Already, private equity players have begun scouting opportunities in the legal sector. Stock market flotations cannot be too far off, either. The implications for financial and investor relations specialists are obvious.

The biggest challenge is for the high street and regional firms that will start to face competition from supermarkets and banks.

'The challenge we are seeing is new entrants,' says Julie Gingell, director of marketing and business development at regional law firm SA Law.

The Legal Services Act (LSA) also enables non-lawyers to become partners.

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