Big fish, little fish

Size does matter. In the next five years the 'high street' solicitor is likely to disappear. While currently something like 75 per cent of all law firms have less than four partners, I would be extremely surprised to see that trend continue after the next five years. So, to compete in today's market, firms are going to have to combine in various inventive ways to meet the onslaught of the various regulatory changes that are about to envelop us.

My firm has more than 20 people and a dog. There are two partners and eight solicitors. To my mind that is a small firm. When I hear other lawyers talk about their IT manager, HR manager, practice manager and compliance managers, I sit and fume knowing that firms of my size can rarely afford the luxury of such non-fee earning members of staff.

Yet the future demands that we have in place such members of staff. Increasingly, all firms are going to rely on IT far more than ever before. I doubt we will have any post or DX in a few years time and everything will be dealt with by email or other forms of technology. As technology becomes more important it will be vital to make sure it works properly and keeps the firm competitive. An IT manager will be more of a must than a maybe.

The new regulatory regime that the SRA is introducing in October this year imposes two brand new roles which in essence have not really existed before: the COLP, the compliance officer for legal practice, and the COFA, the compliance officer for finance and administration. I am fortunate in that I am a two-partner firm and two parties can divide these roles up between them. Sole practitioners will have a harder time. Some firms will meet resistance from partners who are keener to do the legal work than the often perceived as dull admin.

There is also the oncoming sea change in how legal services are delivered. We already have the QualitySolicitors experiment in WHSmith which may be a glittering triumph or it could be something of a damp squib. On the other hand, we are now hearing about firms of estate agents moving hell for leather in to the conveyancing business, trying to offer that all important one-stop shop which it is thought that the customer requires.

Whether that is a success or not is open to question. I can recall the time some years ago when solicitors were dashing out to try to become estate agents, but few of those ventures exist today. Change for change's sake does not always appeal to the punters. When ITV took the Match of the Day franchise they changed its look so considerably that people simply stopped watching. In weeks they had to change all their new ideas and simply go back to offering undiluted football. It may be that some of the changes in service delivery which are being mulled over currently will be a success; others are likely to be failures. The customers will vote with their feet.

A small 'c'

The great British public can be very conservative when it comes to matters of the law. Not everybody wants to deal with legal matters in an outrageously modern manner. What remains true, however, is that the revolution in the way legal services are delivered in this country will inevitably mean the demise of the smaller practice.

I suspect that older style work such as conveyancing and wills and probate may get picked off by large-scale providers who can offer an extremely competitive service. It may be that the customer will also question other aspects of the conveyancing process such as the fact that estate agents can still charge a three per cent commission for the sale of a £3m flat.

I do not believe for one minute that it is only solicitors who should feel threatened at this moment. The estate agency business should be quaking in its boots. When customers discover that they can engage some monolithic concern to do its conveyancing for next to nothing, they really will begin to ask serious questions about the fees charged by estate agents and, for that matter, surveyors, mortgage brokers and all the other hangers-on in relation to such matters.

It is likely then that in a few years' time the typical high street, where there are several firms nestling above shops, is likely to see a change. Those firms are likely to either go out of business, merge or become involved in some other legal services supplier. New larger firms will have the benefit of practice managers and all those non-fee earning staff who will be able to make the wheels grind as quickly as the clients demand. Such firms are still likely to be competitive in the marketplace.

Whether Rightmove, the Co-op or WHSmith muscle in, there will still be a role for solicitors locally. But size will increasingly matter. If I merge or get taken over, I suppose my number one question is will you let my dog come in to work with me? My guess is that the dog adds a great deal of value to the transaction and one hell of a lot of goodwill.