Legal Services Act 2007 -
What you should do NOW
On October 6th 2011, The Legal Services Act 2007 could bring
many opportunities to legal firms as well as threats.
In Part 2 of this guide, our legal experts tell you what you
should be doing now.
1. Read, understand and comply with
the New Solicitors' Regulation Authority (SRA) Handbook -
Of particular note are; the changes to Solicitors' Accounts Rules,
changes to Alternative Business Structures regulations, obligations
to appoint a COLP and COFA by March 31st 2012 and Outcomes Focused
Regulation.
2. Evaluate the Risk to Your
Business - Where are you most vulnerable to new market
entrants? Where does the majority of your work come from? Which
services give you the best margins? It is likely that new market
entrants will target those services that can be commoditised, such
as will writing because these are offered directly to
consumers.
3. Mitigate the Risk - Which
areas of your business are performing well and which are negatively
affecting your cash flow? Once you have undertaken this analysis,
you could look to restructure and scale your workforce by moving
employees from those vulnerable service lines to different, more
successful areas in the business. By scaling up and down now you
can reduce the risk to your firm and keep your most talented
employees working.
4. Fight Back - Think of all
the reasons why your firm is better than the rest and focus your
efforts here. Your knowledge, experience and brand is likely to be
far greater than new market entrants.
5. Make your systems and procedures
better than other firms - In order to counter increased
competition in the market you should focus on better systems and
procedures. Focus on being better in terms of business performance,
client relations and customer service. You might also think about
getting better industry accreditation and lower insurance premiums
than other legal firms.
6. Consider Mergers, Joint Ventures,
Acquisitions and/or Franchising? - You could perhaps
improve your competitive position by restructuring your firm. You
could acquire a new team, increase your levels of expertise, adopt
new ideas and technologies or increase your flexibility.
7. Use the Legal Services Act as an
Opportunity - The Alternative Business Structure changes
could lead to great opportunities for your firm. You could seek
external, non-lawyer investment and fundraising opportunities. You
could adapt your business by offering new services. What's more,
with rising personal tax rates and decreasing corporate tax rates,
currently incorporation could lead to large tax savings for
individuals involved.
Go To Part 3:
Appointing a COLA and COFA
For more information, please contact Mike Buxton on tel:
0151 255 2300 or email: mike.buxton@mitchellcharlesworth.co.uk