Jobsworth by Michael Scutt » tesco law

The Legal Services Act 2007

Michael Scutt — Wed, 03 Mar 2010 23:16:18 +0000

Yesterday I spoke at a workshop arranged by Gateway Media on the theme of “Combating Tesco Law: Preparing your Brand Presence”. I tried to explain what the LSA does in about an hour – it was a bit of a rush but no one fell asleep and I hope I got the main points across. As promised I have loaded my Powerpoint presentation onto Slideshare and you can view it here;

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It’s quality, not quantity that counts

Michael Scutt — Fri, 26 Feb 2010 10:30:47 +0000

I recently read a post on The Client Revolution, a US blog, called “What lawyers can learn from an Office Depot Commercial”. It’s about how small law firms can compete with larger businesses, not by trying to compete on price, but in other ways, namely quality of work. The post is well worth a read, and the You Tube video beneath is the one that Jay Shepherd, the author, refers to. Next Tuesday I am speaking at Gateway Media’s workshop on “Combating Tesco Law” and this advert strikes me as containing a very useful example of how firms can strike back at bigger competitors.

These issues are getting more relevant for practitioners by the day. John Flood, Professor of Law and Sociology at the University of Westminster reports on his blog, RATS (take a look to see what the acronym stands for) that the Legal Services Board has announced Alternative Business Structures will come into operation from October 2011 – see the press release here. Applications for ABS status will be allowed from next summer. John asks “will it be a matter of who gets there first or will the fast second ultimately win?”. I would opt for the latter: being a guinea pig is rarely a route to success.

Now that the prospect of market consolidation is getting very close, what steps should law firms be taking? Being creative, open to change and offering the legal equivalent of fixing a cheapo haircut. You just need to get your message out there.

Combating Tesco Law: Prepare your Brand Presence

Michael Scutt — Mon, 08 Feb 2010 16:22:54 +0000

How prepared are you for the Legal Services Act?

Gateway Media are a very accomplished media agency with some blue-chip clients. I was therefore delighted to be invited to speak on the 2nd March at the above workshop about the Legal Services Act 2007 and the implications for lawyers. I will be taking a look at the Legal Services Act and its main provisions in a talk entitled “The Legal Services Act Explained“. The introduction of Alternative Business Structures is now only a year away.

After me will be two very interesting sessions on marketing and the use of digital media. The “Marketing Refresher” session is aimed at lawyers and how to promote professional services. It will deal with marketing basics and the issues business owners need to think about when promoting their brands.

The final session “Practical Steps” will be devoted to digital media, promotional strategies and developing your online presence.

It should be an interesting (half) afternoon – and it’s free!

You can register at http://tiny.cc/V4hlI

Or phone: 020 3056 4063

Tesco Law surges ahead

Michael Scutt — Wed, 25 Nov 2009 10:30:47 +0000

Three things connected with Tesco Law caught my eye last week and we saw some interesting developments in the liberalisation of the legal profession, aka the legal services industry.

Firstly, On the 18th November, the Legal Services Board (“LSB”) published its consultation paper “Alternative Business Structures: approaches to licensing” . The LSB will become the regulator of the regulators when ABSs come into existence in 2011.. The Act contains eight “regulatory objectives” and five “professional principles”. There will be several frontline regulators and barristers could be regulated by the SRA, Solicitors by the Institute of Legal Executives and Legal Executives by the Archbishop of Canterbury(apparently he is not only the supreme authority in the Church of England but he also oversees Notary Publics when he isn’t trying to prevent the Pope from half-inching his dioceses). The regulatory structure seems overly complicated.

In the meantime, pending the new structures coming into force, the LSB needs to set rules for how the frontline regulators will apply the new core principles enshrined in the LSA. They are a bit “motherhood and apple pie” in nature; for instance Part 1 1(1) sets out the regulatory objectives. They are

(a) protecting and promoting the public interest

(b) supporting the constitutional principle of the rule of law

(d) protecting and promoting the interests of consumers

(e) promoting competition in the provision of services (by authorised persons)

(f) encouraging an independent, strong, diverse and effective legal profession (stop laughing at the back there)

(g) increasing public understanding of the citizen’s legal rights and duties

(h) promoting and maintaining adherence to the professional principles

S.3 states the “professional principles” that apply to “authorised persons” who should;

(a) act with independence and integrity

(b) maintain proper standards of work

(d) (in litigation) comply with their duty to the court to act with independence in the interests of justice, and

(e) keep client affairs confidential

All good stuff and hard to disagree with the sentiments expressed, save that many in the profession will give a hollow laugh to 1(1)(f) above. The consultation paper seeks to put these principles into practice and in the foreword the Chairman of the LSB David Edmonds states that the LSB doesn’t want to regulate ABSs themselves, that is a job for the “front-line” regulators such as the SRA, the Bar Standards Board and ILEX, to take three. The consultation paper is 113 pages long and I must confess to not having read it yet. It’s next on the list.

Secondly, another document on my reading list is “The Big Bang report – opportunities and threats in the new legal services market“ compiled by the Byfield Consultancy. It was launched at the offices of City law firm Fox Williams LLP last Thursday to an audience of the great and the good. I went along as well. The report has the advantage of being only 42 pages long and contains an overview of the history of the LSA and the impetus behind it, as well as interviews with some of the main players.

Finally, the Bar Standards Board announced last week that barristers would be allowed to join Legal Disciplinary Partnerships (LDPs) as managers (but preferably not as shareholders) in LDPs with up to 25% non-lawyer managers, be regulated by the SRA and not be required to requalify as a solicitor. The BSB hasn’t given the green light to barristers joining ABSs; that must wait until 2010 at the earliest when more consultation has occurred. Barrister only partnerships will be allowable (at the moment barristers practicing from chambers are all self-employed). This decision is of historic significance – it could mark the end of the Bar as we know it.

I will be reading the above reports and blogging on them again in due course, once the current deluge of work in my day job has calmed down. We are now entering the beginning of the festive season when many employers like to present their staff with a gift of a compromise agreement and a visit to an independent solicitor to be told their rights. The next few weeks look like being particularly busy this year.

Is it all about price?

Michael Scutt — Tue, 03 Nov 2009 10:00:58 +0000

I’m writing this on the train coming back from the latest Tesco Law workshop run by Lammore Consulting Ltd. The session was attended by solicitors from a range of firms over the West Midlands and consists of a presentation by me on the Legal Services Act 2007 (aka Tesco Law) and a very stimulating session by Mark Blackmore (from Lammore) on the theory of sales and marketing.

The main concern that most delegates have is that they won’t be able to compete on price with the likes of Tesco, the Co-Op and other retail or banking giants. Mark’s session, involving a great exercise with four tubes of toothpaste (if you want to know more you’ll have to attend one of the courses), is to demonstrate that price isn’t the only issue that affects consumers. Indeed, if a price is too low, it can be just as off putting as if too high. The message is clear: lawyers are salesmen and to succeed in the future we will need to recognise and apply the “Single Sales Principle (SSP)”.

The SSP has three identifiable elements;

Your customer’s “Compelling Need” for a product PLUS
A “Credible Solution” from a supplier, PLUS
“Perceived Value” as an outcome

EQUALS a sale.

It is, perhaps, easier said than done but clearly has application to the sales of professional services just as much as the sale of a product. How to implement SSP in one’s own practice? For most lawyers, the first element isn’t likely to be a problem: most legal services are distress purchases. The problem, instead, is to promote oneself at the second stage of the equation. In my view the way forward is to build one’s own reputation – one’s own brand. How you do that is a career all in itself, but social media certainly gives more people the ability to project themselves and their businesses, which is one reason why I write this blog.

But there is more to it than that. Even if as a practitioner you can build your brand, demonstrate excellence and provide a quality service, there is (in my view) still one massive piece of jigsaw missing: affordability of legal services, the need to demonstrate the final part of the equation “perceived value”. Clients want to know how much a piece of work will cost, whereas the solicitor doesn’t want to quote a fixed price unless s/he knows that it will cover all the work. Therein lies the age-old fundamental problem – how to get beyond hourly rates? Charge a percentage of compensation perhaps? It can be done in the ET and conveyancers used to charge a percentage based on the value of the house, just like estate agents still do, (and they don’t take on any risk in the transaction, unlike the solicitor). Increasingly sophisticated IT solutions that provide much routine advice can be one answer: see Tessa Shepperson’s excellent website at Landlord-Law. She provides an opportunity for both landlords and tenants to become members of her site and access documents and then, if that isn’t sufficient, they can instruct her for specific advice on their situation.

However, that still gets us back to the problem of how you price a potentially open-ended service. Will Tesco-law be able to resolve that problem? Or will they just be able to absorb more hits than a law firm? That’s no better business for them than it is for a traditional law firm. In my experience, from working at a personal injury “factory” style law firm, the bulk provision of legal services doesn’t work for everyone. People don’t shop just on price but on a whole range of factors. Will a small, specialist, law firm that offers a credible solution and perceived value be able to succeed post 2011? Yes, I believe so.

Help I need somebody …

Michael Scutt — Thu, 24 Sep 2009 09:00:40 +0000

Two weeks ago I was speaking at a seminar entitled “Competing in a Changing Environment” ¹ on the subject of “Tesco Law” and the implications of Alternative Business Structures on the profession. One of the delegates, a solicitor, asked what our “union” i.e. the Law Society was doing to promote its members’ interests. I demonstrated my ignorance by saying I wasn’t aware of any promotional schemes afoot. Then, as if by magic, as used to be said of Mr Ben (that’s the cartoon shopkeeper not the current Secretary of State for Environment, Food and Rural Affairs, still less his father Tony the scourge of the Labour Party in the 1980s but now national treasure), news comes out that the Law Society is running a promotion to boost the solicitor “brand” starting last Monday and running to the 30th October. The theme is “Help, I need somebody … but not just anybody”.

The purpose of the campaign is to help solicitors attract new business and retain existing clients by focusing on the “reassurance to be gained by seeking advice from a properly qualified professional”. The press release describes solicitors’ USP as including the following virtues;

more expert and reliable than other providers of legal or quasi-legal services
properly regulated
excellent value for money

I don’t disagree with any of this and it is just what the profession needs as it copes with a tough recession and, more importantly, tries to adapt to the huge changes that are on the horizon. In these brand driven days raising the profile of the profession is especially important for smaller law firms without large marketing budgets or the time to devote to PR. Many practitioners tend to be sceptical of the Law Society and I doubt this campaign will alter that view, but give it some support.

1. “Competing in a Changing Environment” - Lammore Consulting

Product vs Service

Michael Scutt — Fri, 11 Sep 2009 09:00:20 +0000

Completing Tesco Law week here on Jobsworth, I thought I would comment on a very interesting post that I read on the “DirectLawUK” blog a couple fo days ago. The central point of the piece was that solicitors have to recognise the difference between a “product” and a “service”. On this thesis, clients want a product whereas solicitors provide a service. With appropriate use of technology solicitors can work more efficiently and thus provide a cheaper service and the firm that can do both will be successful. I think this is too simplistic.

The problem is that the cost of the service is open-ended, whereas a cost of a product is fixed and what clients want is certainty over how much they are going to pay. It is a dichotomy that goes right to the heart of the relationship between solicitors and their clients and is at the heart of the debate over Tesco law.

In terms of commoditised products (such as wills and conveyancing) solicitors are providing a product and that is why so many practitioners are concerned at being wiped out by the introduction of ABSs. The only way that the High Street firms can compete is on quality, especially where the client’s requirements are non-standard (i.e. with high value estates or non-registered property). Where the analysis becomes very challenging though is in respect of litigation where it is very difficult to give a fixed price estimate at the outset of the matter. Can a piece of litigation be defined as a “product”? With the exception of low-value RTA work and, maybe, some employment law cases, litigation can’t really be commoditised. Each case rests on its own facts and the best way to pursue it is with people who know what they are doing. Human beings cost money, especially if they are experienced.

Can Tesco law change that? Potentially by outsourcing the fee-earners to South Africa or India, but is it feasible to have your County Court divorce handled by someone based in Cape Town or Mumbai? What might alter the terms of the debate is if Lord Justice Jackson’s Report on Civil Litigation costs recommends an end to the cost-shifting rule whereby the winner gets his/her costs paid by the losing party. At the moment the only reason I can see Tesco law wanting to get involved in litigious work is if they can do it more cheaply using economies of scale and make a greater profit on the amount recoverable from the loser. If the paying party becomes the client in all cases will that business model be quite so attractive?

I’ll be writing further pieces on Tesco Law over the coming weeks, so please do link to the blog or opt into the RSS feed for updates. Next week I’ll be back on employment law.

Can social media save solicitors?

Michael Scutt — Thu, 10 Sep 2009 09:00:07 +0000

In my last post on this topic I argued that the introduction of Alternative Business Structures (ABSs) does not have to entail the destruction of the smaller firms in the legal profession, although it undoubtedly poses a very severe challenge.

High Street firms without a recognised “brand” of their own haven’t got the financial resources to compete with the massive advertising budgets of the banks and supermarkets. Firms or, more particularly, individual solicitors themselves, have only their own skills and personality to sell. Word of mouth recommendation is well recognised as the best form of business development and that will never change. What will change is that social media will allow firms and individuals to promote themselves beyond the confines of the spoken word of mouth networks. In particular it is likely that websites will develop which will allow users to rate their solicitor; think TripAdvisor, but for lawyers. It must only be a matter of time before such a site develops.

Alternatively networks will (and are) appear which act as umbrellas for “quality-checked” firms – we’re seeing that with QualitySolicitors.com, Contact Law (who are ”badging” their service via the Daily Telegraph) and TakeLegalAdvice.com to name three.

It will then be very important for lawyers to control their online identities and to promote themselves in the virtual world. We all know how “googling” has become a verb and not just a proper noun. This trend will continue as the general population becomes more tech-savvy. All practitioners will require a digital media strategy (Tesco law will have one). Anyone reading this blog probably has a pretty good idea of web 2.0 and social media but, for the sake of completeness, this is what I think a digital media strategy is;

A good website, properly designed, utilising SEO techniques.
A blog – probably a personal rather than a corporate one displaying wisdom and personality (like this one really!)
Use of Facebook et al. Facebook has “Pages” that allow businesses to promote themselves. It also has about 245 million users worldwide. Facebook has overtaken MySpace in importance.
Twitter! Play with it for a while and you will see its uses.
Linked-In et al – of most use to recruitment consultants at the moment but that will change.

None of this will replace good old-fashioned networking in the real world or will surpass the joys of an old-fashioned lengthy lunch (some of us still do it and I’m always open to invitations) but it will complement it.

As usual, all comments welcome.