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High street law firms face double blow

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DWF238/06
16 October 2006

High street law firms face double blow

As the AA announces the launch of a new legal service, a leading law firm has warned that small independent practices could disappear from the high street to be replaced by big-name consumer brands.

DWF says the AA’s announcement follows the government’s decision to press ahead with the biggest shake-up of legal services in living memory, which will enable non-lawyers to enter the legal services market. The AA will provide services through recognised law firms until the Legal Services Bill comes into force in 2008, when it can serve the public directly. The Co-operative Group has also signalled its intention to enter the legal market.

Peter Moore, a partner and specialist in partnerships at DWF and also a member of the Association of Partnership Practitioners, said he feared that small firms would now be under siege. “Many small high street law firms and criminal legal aid firms are already struggling and, with competition from big consumer brands with deeper pockets, the likelihood is that many will fall by the wayside or be swallowed up and become part of a chain. While the big companies claim they will offer better value and accessibility, I fear the opposite may be the case.

“Standards could fall if they replace skilled solicitors with unqualified staff to keep costs down, while the closure of small independent firms could result in restricted choice in rural areas and small towns. There could also be a glut of qualified solicitors in the jobs market.”

Moore said that small high street practices and criminal legal aid firms also face a threat in the light of Lord Carter’s report last week, which proposed that criminal defence firms should be handling at least 200 cases a year to be able to carry out Legal Aid work. Research by the Law Society found predicts that over 1,000 of them may be forced to merge or sell their businesses.

He said: “Small and medium-size practices need to prepare for what is about to happen. They need a strategy to confront and manage the risks. This may be the right time to consider conversion to Limited Liability Partnership status. For those who would welcome outside investment or ownership, an LLP is an easier body to invest in, while for those who want to remain independent, it provides a more robust structure because it has its own legal personality and cannot be dissolved.

“Unfortunately there will be casualties but those who face up to the threats by organising their partnership relationships properly will be more likely to survive.”

ENDS
Notes to editors

DWF is one of the fastest growing law firms in the UK, with over 350 legal advisers (including 69 partners) and 600 staff based in Manchester and Liverpool. DWF services cover the following areas, delivered by specialist teams – including leading experts in their field:

Banking & Asset finance
Business Recovery
Corporate & Commercial
Dispute Resolution
Partnerships
Employment Law
Health, Safety & Environment
Insurance
Property & Construction
Wealthcare

We have developed extensive sector-specific expertise in a number of areas and have created specialist groups to enable our clients to benefit from this expertise. Further information on DWF is available via www.dwf.co.uk

Media enquiries to: Sam Dabbs, Dabbs PR & Marketing, T: 01939 210503 or 07050 108985, E: sam@dabbsprm.com