The Cost of Legal Services

It is sad to see so many Solicitors’ offices closing in the wake of the financial crisis. Many successful and well-established firms have collapsed in the last twelve to eighteen months, largely as a result of the meltdown of the property market. Other firms were also forced to close when they were unable to secure professional indemnity insurance in October of last year. Kent has the largest number of small law firms than any other county in England. It is blessed with a variety of small High Street practices offering choice, competition and local access to the community. While most firms have survived it is questionable how many more firms will die once the Legal Services Act comes into force later this year. If you are a member of the profession the the name of the act probably fills you with dread; if you are a member of the public then the chances are you have never heard of it.

The Legal Services Act will allow all kinds of large organisations such as supermarkets and banks to offer legal services to members of the public, the sort of legal services that are currently only available through solicitors’ practices. The argument is that this will offer the public more choice and cheaper prices. However, if that were true the High Street would be awash with small, thriving local supermarkets. Instead, as we all know supermarket chains have killed competition except between supermarket chains. Your local grocery store no longer exists (unless of course it is run by Tesco and has the word Metro in the title) and many greengrocers and butchers are struggling to survive.

Solicitors are currently asking themselves will Tesco offer two divorces for the price of one and will they offer Clubcard points with that? Only time will tell. And prices? There is a lot of competition now but it doesn’t translate into cheaper prices for the public. Economies of scale dictate that Sainsbury, Tesco and the like should be able to offer legal services at far lower cost than is currently available through your local solicitors’ practice. However the public should ask itself who will be doing my work, will they be qualified and will I ever get to meet them? Finally, what happens when there are no small law firms left; when there is no competition will the price go up?