New competition for law firms?

The International Legal Technology Association ILTA recently arranged a Nordic event in Copenhagen. Key note speaker was the well-known legal IT consultant Neil Cameron who talked about the legal services act in the UK and the consequences this will have on the market for legal services.

Many commercial law firms are considering converting to alternative business structures (ABS) and  several of them have an interest in creating a multi-disciplinary practice (MDP), spinning off new services and accessing external investment to finance growth. Others focuses on creating a legal disciplinary practices (LDP) which is a form of recognized body providing legal services where the owners and managers are not exclusively lawyers. Neil reported about several law firms that already has taken this route.

Now also US law firms seems to adapt to these new UK regulations as the American Bar Association has made it possible for US law firms to have non-lawyers being partners in the firm if the US law firm has an office in the UK that has converted to an ABS: "ABA: US lawyers can share fees with ABS non-lawyers".

The consequences of these deregulations on the market for legal services will probably be increased commoditization and greater competition.The competition might not come from new entrants but from companies that are already in the market for legal services but that are able to change their traditional market model, as described on this slide from Neil Cameron's presentation:

Neil Cameron New Entrants

We already know of one legal textbook publisher, Jordans, that has received an ABS License: "The legal textbook publisher that's now a law firm". Jordans Corporate Law department will focus on commercial and legal advice at transparent prices. "Rather than competing with the company's existing law firm clients, Ms Farman said Jordans Corporate Law could provide then with a 'cost effective' answer to handling due diligence or dealing with transactional documents."

Will the new tough competition for commercial law firms come from publishers such as LexisNexis and Thomson Reuters?

 

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