The Legal Services Act (LSA) is making traditional firms more innovative with 25 per cent planning on changing their strategy as a direct result of the legislation, a survery by advisory firm Baker Tilly has claimed.
The company questioned 60 ABS and non-ABS firms of varied sizes about how they maintained competitiveness since the introduction of the LSA, concluding that 25 per cent had to changed strategy compared to just nine per cent three years ago.
Firms however are less optimistic about the LSA with just 14 per cent saying the legislation has had a positive impact compared to 21 per cent three years ago.
Baker Tilly professional practice group chair George Bull said: “In many cases law firms that previously held the view that reforms would have little impact on their business are coming around to the view that they will have to adjust their business model. The realisation that change will be necessary appears to be steadily growing.”
The report suggests that the introduction of the LSA has helped sharpen the thinking among firms looking for new ways to maintain competitiveness. Of those interviewed, 39 per cent said they had already shifted their strategy in response to the changes.
Bull continued: “Regulatory change has been most pronounced in connection with personal injury work so it is not surprising that we see the greatest amount of market movement here. However, this part of the market has not reached a new, mature stage yet. Long-term success for providers of retail legal services will depend on building a lifelong relationship with clients.
“Elsewhere in the legal sector, early-stage experimentation has produced new types of legal business models which are not always attractive to funders. Here, innovation has not yet been reflected in market change. This is particularly evident among legal businesses providing services to business clients: we have not yet seen a real game-changer enter the market.”
The Legal Services Board (LSB) last year admitted that the LSA had not resulted in the expected sweeping changes to the profession, stating in a five-year progress report that it was “early days” to judge its impact.