The Legal Services Act of 2007 was introduced to promote more competition, innovation and transparency in the legal services market, and to encourage law firms to become more customer-centric. It was designed to shake up a profession largely unchanged for hundreds of years.
The thinking was to place the customer at the heart of this change, resulting in an innovative, customer-focused and commercially-minded legal offering.
A series of measures were introduced as part of the Act, including the formation of a single, independent regulator – the Legal Service Board – and the creation of Alternative Business Structures (ABSs).
ABSs enable both solicitors and non-solicitors to share management and ownership of the business. Prior to this, only solicitors were allowed to run law firms.The main benefits HR directors will hone in on are the chance to gain significant cost savings, better customer service, a more joined-up service and the ability to interface with more innovative technology. You could even say that ABSs are ‘Uber’-ising employment law provision.
For example, up to now the majority of law firms have preferred the hourly rate model. As soon as an HR professional picks up the phone that clock starts ticking. However, many ABSs are rejecting the pay-as-you-go model in favour of fixed-fee subscription packages for specialist, unlimited legal advice.
It’s the best-kept secret in HR. Four years ago this month the first Alternative Business Structure licence was granted for legal services. One year earlier the Legal Services Act 2007 had come into effect, opening up the market for legal provision, including employment law, to competitors outside traditional law firms, such as supermarkets and banks. It became known as ‘Tesco Law’. But few in HR appear to have grasped the significance.
“For years I was looking for a commercially driven, expedient and efficient legal service that put my business first,” says Karen Lewis, HR director at housing and construction group Keepmoat.
“I wanted something that would give the right type of advice, with the right professionalism that was really commercial, enabling us to do what was needed in the business as opposed to a lot of lawyers saying ‘No you can’t do that’, or sitting on the fence. And I wanted something that gave me certainty and told me exactly what the budget would be. A few years ago that type of structure didn’t exist.”
But today this type of structure does exist. The arrival of the Legal Services Act, and subsequent Alternative Business Structures (or ABSs) have given Lewis what she was looking for. In the somewhat staid legal market these two changes are tantamount to a revolution. So how can HR directors and employee relations teams benefit from these changes?
Not much has happened to change the legal services landscape in the past 800 years. It’s been a largely closed, self-regulated market where solicitors charge by the minute and barristers wear almost exactly the same outfits as their 19th century predecessors. Change has been practically non-existent – until now.
In recent years, new legislation has come in that aims to transform the legal services market, subjecting it to the kind of liberalisation and competition that other professional services industries are used to. And although progress has been slow, the ripples of these changes are starting to spread. In 2011, provisions of the 2007 Legal Services Act came into effect to allow alternative business structures (ABSs). This means non-lawyers in professional, management or ownership roles can offer regulated legal services in England and Wales.
While that might not sound like much to an outsider, experts called it a “big bang moment” for the profession.
HR Legal Service is delivered by our strategic partner, ESPHR. ESPHR is a trading brand of the ESP group of associated companies, which include:
The Employment Services Partnership Ltd (esp ltd), a company registered in England and Wales with company number 4694032. Vat Registered No. 811261668.
ESP Law Ltd, a company registered in England and Wales under company number 8951807. Vat Registered No. 183243316.
ESP HR Information Services Ltd, a company registered in England and Wales with company number 7803475. Vat Registered No. 123731441.
ESP Safeguard Ltd, a company registered in England and Wales with company number 7832239. ESP Safeguard Ltd is authorised and regulated by the Financial Conduct Authority and is entered on the FCA register (www.fca.org.uk) under reference 587248.The Employment Services Partnership Ltd is an appointed representative of ESP Safeguard Ltd.
The ESP group of associated companies have their registered offices at ESP House, 4 The Links Business Centre, Old Woking Road, Woking, Surrey GU22 8BF.
© Copyright: MA Business Ltd - all rights Reserved. All content correct at time of going to press – August 2016.
The Legal Advisory Team
Employment legal advice is provided by an independent associated ESP company, ESP Law Ltd. ESP Law Ltd (SRA ID number 618773) is authorised and regulated by the Solicitors Regulation Authority and complies with the Solicitors Code of Conduct.