Legal services – who are you afraid of in 2014?

A year ago, David Gilroy of Conscious Solutions wrote an article for the Newsletter on this topic. We also included the article in our online course Solicitors and the Internet 2013 and asked solicitors what their opinion is of the legal service providers quoted. Here are some of their comments together with a few words of introduction taken from David Gilroy’s original article. His summary of the situation now is given at the end of the article.

Riverview Law

David Gilroy said: “Fixed price services, online document library, free initial call. That’s not a revolution in how legal services are delivered I hear you cry. We’ve been doing that for ages. Well if you have, you are in the minority. If you are a law firm concentrating mostly on providing business legal services then I would pay attention to what Riverview Law are doing.”

Chris Arnheim, Arnheim Solicitors

I have looked at their fixed price services & online document library. It is very cheap and basic. It will appeal to micro businesses and small start ups, but is unlikely to take much of the mid-to-large SME market, without investment in specialist and advisory skills. In my experience clients want advice not just documents or execution, and are prepared to pay for it.

The strength of these sorts of businesses though is their marketing clout, and over time they may start to get traction.

Spencer Laymond, SL Law Limited

Based on the information from their website they are holding themselves out as experts to SMEs, mid-sized and large corporations. For SMEs, ie businesses with less than 50 employees, there is free access to a legal library including 450 documents, letters and templates and 650 advice pages. Unlimited legal advice can also be purchased on the basis of a fixed fee support contract, which is backed up by a money back guarantee.

If you read further into the website, in particular the terms and conditions of the Legal Advisor Service Scope, there appears to be a key limitation. Namely the “limitation of service scope”, where, if specific advice is required, then a further fixed fee would be payable. So whilst the marketing is about transparency on costs, I can’t see that there is any evidence or marketing that the customer may actually pay less than if paying someone on a time basis.

Nevertheless, the marketing is clean, professional and powerful. The firm is backed up by DLA Piper and Advisor Plus. As they say on the website “we have the luxury of being a well-funded business, with no baggage, that can innovate and make decisions quickly”. There are 100+ lawyers on the team.

I see the real threat as their ability to scoop up business from customers whether or not they would be providing best advice or best service. So even if a small firm or sole practitioner could provide a better solution, they may not get that chance.

Rizwan Mirza, Lighthouse Solicitors

Riverview Law offers an interesting and clear approach particularly with regards fee structure. Though not (yet?) having penetrated our area of law, their approach and size does look an attractive model in so far as they offer tools to the client in the form of templates and free initial advice which I do not think is sustainable for smaller firms such as ourselves.

Richard Shaw, Lincoln Family Law

The Riverview model could be a threat if it were priced in any way realistically. For example the fees quoted for representation for an application for a financial order – initial conference £1,000, first appointment £5,000, final dispute resolution £17,500 plus VAT, almost £30,000 – these are extraordinarily high in my view. Fixed fee work may be attractive for the client but Riverview have to some extent nullified this advantage by their excessive fee structure. However, realistically priced fixed fee work would be a threat so if Riverview lower their fees then they might become dangerous.

Co-operative Legal Services

David Gilroy said: “For firms which have a fairly large proportion of their income coming from consumer law and family work, this is the one to be afraid of. With six million members, the Co-op’s has got to be the biggest list that any legal brand has stored in a nice CRM system that they can use for mega, sophisticated direct marketing. How long before their stores, banks and funeral homes all have some kind of pop-up or legal services hotline? I would also put the AA and Saga into the same category as the Co-op: large brands with sophisticated marketing machines behind them.”

Richard Shaw, Lincoln Family Law

Co-operative Legal Services could certainly be a threat and they have committed to family law. There is a good use of video on their website. Contacting the Co-op for legal services may seem unusual at the moment but as consumers get accustomed to the idea they will probably snowball. They are using Pay Per Click and no doubt they could increase their web presence if that wanted to. I think they are probably the biggest threat in the long term.

Several other firms thought that the well known “brand name” would be a threat, as well as the attraction of a fixed fee.

QualitySolicitors

David Gilroy said: “You doubtless know a local firm who belongs to the QS network. You’ll know if the firm is deemed to be a ”˜quality’ firm or not, but that’s not the point. QS has raised the profile of law firms across the country. Whether they’ve done it in a way that only benefits their member firms is an interesting question. Does anyone know of a QS firm that is growing at double digit growth as a direct result of their QS membership? I don’t but I do know firms in the network who are struggling. If I was a medium sized high street or regional law firm doing a broad mix of consumer and business legal services, I would keep an ey
e on what my local QS firm was doing, but I don’t think I’d be very afraid of them.”

Rizwan Mirza, Lighthouse Solicitors

There is no evidence of the brand becoming an immediate threat though I expect they have more than most to spend on marketing, websites/ online etc. We specialise in private client immigration work and have yet to see any penetration of our niche area by QS.

Other firms thought that the brand – becoming well known – would be attractive, and that their use of phrases like “faceless lawyers” could have an effect.

Stobart Barristers

David Gilroy said: “Stobart Barristers, part of the Stobart Group, are offering a free initial call with a barrister and fixed fees. The service is based on the Direct Access model for Barristers. If I was a small law firm doing all kinds of work, I would be worried that this group is trying to steal my work.”

Interestingly, the firms who had made strong comments about Stobart Barristers did not wish to be quoted in this article (this says something in itself) so I will summarise the points made.

Stobarts was seen as a major threat because:

  • They have a nationally recognised name even though it is not yet associated with the legal world. However, with money and determination, the “brand” could become well known.
  • The way that firms of solicitors are presented as “the old way” and are described as outmoded and even discredited could influence peoples’ opinions.
  • The fixed prices and free initial consultation are seen as very attractive to people looking for a solution to a problem.
  • Where people are going to need a barrister in the end, the option of leaving out the first stage (i.e. the solicitor stage) sounds like a good one.

David Gilroy says, 2014

So, here we are in early January 2014. Here are a few current thoughts about each of the original group, with a couple more added.

RiverviewLaw – Still a threat in my mind. Will they “steal lawyer’s lunches?” No, but in the same way Peninsula grabbed a decent slice of the employment law market, Riverview will do so for the wider commercial legal services market. Chris Arnheim’s comments re micro v SME market share is an interesting one and one that Riverview’s tie up with DMH Stallard will almost certainly affect.

Co-operative Legal Services – Still growing? Still hiring? Tarnished with the reputation of the Co-operative Bank? Whatever their current situation, any membership group with 7 million members (or however many they have) will continue to be a threat.

QualitySolicitors – Back in September, Neil Rose (on Legal Futures) reported that all was rosy in the QS garden. Is that still true just three months later? Fisher Jones Greenwood (a 19 partner Essex firm) have left the network and another decent sized regional firm has given notice (but that’s not public yet). My view is still the same: I’d keep an eye on my local firm, but would continue to build up my own firm’s “local brand” to compete with their national but local view.

Stobart Barristers – It’s all gone a bit quiet I think. As with any privately held company, getting decent financial information is hard. Companies House show Shareholders Funds of minus £250k to 28/02/2013 so it will be interesting to see how this compares at the end of their 2013–14 financial year.

Slater & Gordon – They proved in 2013 that they have deep pockets and also a fairly ruthless streak in acquiring firms and then integrating those firms to remove duplicate costs. I think they have more chance of building a truly national firm than QualitySolicitors and each firm they acquire will be run the S&G way, not “any way they like with a bit of control from the central hub” (my description for the QS model). We need to watch them carefully and mimic some of what they do, I suspect.

Jacoby & Meyers – Never heard of them? Gabe Miller, CEO, spoke at the 2020 Vision: Legal Futures conference back in November. When he described what they had done in the USA to build the “No. 1 recognised consumer law firm” and why he was interested in the UK market (highly fragmented even given our much smaller geography); he was VERY credible. J&M might not be a threat in 2014 but in 2015, I think so.

David Gilroy is Sales and Marketing Director for Conscious Solutions and is one of the founders of the company. He has personally worked with over 300 law firms on their digital marketing strategies including social media, SEO, PPC and CRM. He is an active Tweeter at @conscioussol.

Email dgilroy@conscious.co.uk.

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