Deregulation will see solicitors joining forces
DEREGULATION of the sale of legal services, which will effectively put solicitors in competition with supermarkets, will see a rapid consolidation among local firms if they are to survive, predicted the newly elected president of Tees Valley Law Society today.
Simon Catterall, partner in Stockton-based Jacksons, which recently announced a merger with Newcastle-based Mincoff, said: “We have been among the first to do it, but others will be following suit - and that’s good for clients.”
He said law firms would have to come together and become more streamlined to compete with competition from supermarkets.
The man who will represent more than 100 solicitors in the Tees Valley for the next year said his priority was to encourage business to remain loyal to local firms rather than squander money on outsiders sitting in “expensive offices”.
“Someone has to pay for those overheads and that’s reflected in the higher charges. In many cases local lawyers provide a better service for less.
“Our region boasts some of the finest lawyers in the North of England, a fact we will continue to impress upon local businesses together with the reality that the outstanding level of expertise and service on their doorstep is not likely to be trumped by paying a substantial premium in the marble halls of the large city firms.”
He said his own practice - which will climb to fifth place in the North-east rankings when it joins forces with Minkoff later this year - was braced for change. “We’re up for it,” he said.
“The world is going corporate. Businesses are integrating to reduce overheads and achieve economies of scale.
“I think in the next five years we will see a great number of firms coming together. We have not ruled out further mergers.” He said that may include bringing other professional services under the same roof.
“Jacksons is a major firm on Teesside, but if you are on the outside looking in, we tend to get overlooked. [The merger] gives us the muscle to get in there and compete.”
Lawyers braced for seeing their exclusive hold on legal advice services withdrawn in 2011 are already among those professionals hit hardest by the economic downturn, largely as a result of a huge fall-off in conveyancing, which is bread and butter to many smaller firms.
According to the CBI, professional services firms are seeing their sharpest falls in business for a decade. Its quarterly service sector survey published this week found consulting, accounting and legal services firms enduring the worst decline in business volumes and values since 1998.
A balance of 25% reported lower profits since May - the biggest since February 2002 - with employment falling for the first time in four years.
The CBI’s economic adviser Ian McCafferty said profitability in the service sector was “clearly under pressure”.
But while elsewhere in the North of England, legal firms have closed offices and laid off staff, Nigel Wright of Teesdale-based Dickinson Dees said the firm’s commercial division was seeing its best business in years.
“It’s quality work - work that usually goes to London. They are looking at budgets and providing we can show we can give them the service - without the city overheads - they are prepared to come to us.”
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