Page 4 - Beyond ABS

This is a SEO version of Beyond ABS. Click here to view full version

« Previous Page Table of Contents Next Page »

www.wilkinsonread.co.uk 4 info@wilkinsonread.co.uk

Executive Summary

The market for legal services has changed markedly, and some would say irreversibly, over the past

four years. The global financial crisis that developed out of the US sub-prime market crash

precipitated a deep recession in the UK and in related markets, and output growth has been sluggish

since. This has hit UK law firms particularly hard, as demand in both commercial and consumer

markets has fallen and is unlikely to return to pre-crisis levels for some time.

For a sector that was used to high and growing profits year-on-year for decades, this has been an

especially difficult transition, and one which for many firms is far from over. With the Legal Services

Act opening up the market for legal services, commentators have been predicting widespread

consolidation and changes in ownership structures.

However, this is far from the end of the story. The squeeze on demand and deregulation are coming

at the same time as two other forces also act to transform the market – globalisation and low-cost

competition, and technological change. These two factors mean that law firms, already under

intense pressure, will be subject to increased competition from businesses benefiting from a

competitive advantage in service delivery, largely attributable to the processes of outsourcing,

offshoring and low-cost labour. Such new entrants will be able to start with a blank page,

unencumbered by the baggage of existing structures and processes.

But this picture must be nuanced. Demand for services from existing independent mid-market legal

firms may be squeezed, just as supply increases both from above and below, but it is far from clear

that this market will simply disappear. Indeed, it seems very likely that the market itself will survive

and even expand, as low-cost providers will make legal services accessible to ever more consumers.

One of the most striking things to emerge from this research project has been the contradiction

between how partners see things developing in the market, and how they believe their own firm will

Page 4 - Beyond ABS

This is a SEO version of Beyond ABS. Click here to view full version

« Previous Page Table of Contents Next Page »