Editorial: Mergers & the Internet – Bad news for High Street Law Firms?
How will the position of the high street law firm change as larger firms continue to expand and consumer buying habits continue to change?
The rapidly changing legal landscape can appear to give high street law firms a bleak outlook. Nevertheless, these firms have no choice than to adapt or die!
Earlier this year, Coffin Mew completed its merger with Charles Lucas & Marshall; this highlights a growing trend of larger firms continuing to grow as they seek a bigger piece of the pie. Larger firms would be able to offer legal services capable of a large degree of commoditisation, such as conveyancing and will writing. Quite often this can be for a fraction of the cost of a high street law firm. This is to the detriment of traditional high street firms as their work is likely to be of high volume with lower margins.
Consumers are increasingly becoming more active and demand lower fees; they can now shop around for the best deals i.e. on the internet. Whilst consumers may not be motivated solely by price, they can certainly demand value for money. Thus, it is imperative that high street firms should push towards a more efficient and sustainable model. Consumer habits have changed significantly, and firms must adapt to remain competitive. High street firms will have to move beyond the model of the traditional solicitor to meet consumer expectations. Local high street firms should embrace change and practitioners must take measures into their own hands to bolster their public image as valuable members of the community.
High street practices will need to become much more business-minded in the way they approach consumers and run their practice. Innovation should be welcomed, such as the efficiency offered by technological development. For example, millennials will expect to deal with solicitors online in the same way that they do with other service providers, reducing the already diminishing importance of face-to-face advice.
Moreover, financial management is now imperative for firms who wish to adapt, grow and remain competitive. A clear direction in business development needs to be complemented by a similarly focused approach to financial management. Cash flow must be priority, to be coupled with a strong approach to profit and loss. VFS Legal Funding understand the challenges a high street firm faces and can provide the additional funding required; aligning facilities to match expected cash flow. The law firm can achieve its business objectives and improve its profitability by increasing its financial muscle.
Daniel Andoh, VFS Legal – Modern law Magazine Issue 33