Get free updates - subscribe to our monthly newsletter Subscribe
It has been reported that R3, an association of business recovery professionals, is warning that around 36% of law firms in the East of England face going out of business over the next 12 months as they struggle with the recession as well as industry reforms. Quoting the so-called “Tesco Law” – the Legal Services Act - which allows non-lawyers to invest in and own legal businesses, R3’s Eastern Region chairman Shay Lettice said “Supermarkets, for example, can now set up shop in the legal marketplace, offering low-cost services such as conveyancing, wills and simple contracts. Most likely to be hit by this professional reform are the smaller high street firms, who will find it increasingly difficult to compete in this broader market”.
The latest quarterly national benchmarking survey of the Law Society’s Law Management Section also reveals a worsening cashflow outlook for firms throughout the country.
Andy Poole, Legal Sector Director at Armstrong Watson, comments, “The Legal Services Act will have a major impact on the provision of legal services over the coming months and years. However the other changes in the profession at the present time - such as the Jackson Review, banning personal injury referral fees, extension of the personal injury fast track portal, removing work from the scope of legal aid, cutting legal aid rates - are having a bigger short-term impact on law firms and may cause a number of firms to cease trading”.
Armstrong Watson’s specialist legal sector team is working with law firms throughout the UK to improve their businesses, particularly where profits and cash collection have reduced due to the uncertain economic conditions and changes in the profession. Law firms which find themselves in this position should take early advice from specialist accountants who can help them to focus on profitable areas, improve management information and early warning mechanisms, work alongside the bank, prepare detailed short-term and medium-term integrated forecasts, review fee earner productivity and reduce lock-up by speeding up the processes of billing and cash collection.
Legal Sector Director
If you like this article and would like our FREE updates sent straight to your inbox then subscribe to our monthly newsletterSubscribe
All content © 2015 Armstrong Watson. All Rights Reserved. Website by Simon Pighills.
Armstrong Watson LLP is a limited liability partnership registered in England and Wales, number OC415608. The registered office is 15 Victoria Place, Carlisle, CA1 1EW where a list of members is kept. Armstrong Watson LLP is regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities. Unless otherwise indicated, either expressly or by the context, we use the word “partner” to describe a member of Armstrong Watson LLP or an employee of Armstrong Watson LLP in their capacity as such.
Armstrong Watson Audit Limited is registered to carry on audit work in the UK and Ireland by the Institute of Chartered Accountants in England and Wales. Registered as a limited company in England and Wales, number 8800970. The registered office is 15 Victoria Place, Carlisle, CA1 1EW.
Armstrong Watson Financial Planning Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 542122. Registered as a limited company in England and Wales, number 7208672. The registered office is 15 Victoria Place, Carlisle, CA1 1EW. Armstrong Watson Financial Planning & Wealth Management is a trading style of Armstrong Watson Financial Planning Limited.
Armstrong Watson Trustees Limited is a limited company registered in England and Wales, number 84495656. The registered office is 15 Victoria Place, Carlisle, CA1 1EW.