2013 is almost at an end. Looking back, we were told some time ago of what was expected to be a big bang when alternative business structures (ABS) would come into existence.
While it has had an impact on legal services, it hasn’t been the massive explosion that was predicted, with supermarkets across the UK dominating legal services.
However, the latest chapter in the ABS saga has seen the accountants step into the ring. The Legal Services Board (LSB) has given its blessing to the Institute of Chartered Certified Accountants of England & Wales (ICAEW) to become an ABS regulator.
For the accountancy profession, there is an element of predictability about what will happen next – one, two or all of the Big Four accountancy firms will become ABSs, or at least apply to be one and the ICAEW will ensure they go through the strict tests required before giving their approval.
What’s less obvious is the impact this will have on the existing, established legal services market.
Of course, the predictable predictions of accountants taking over the legal sector are beginning to sound, but don’t be so sure..
There has always been an inevitability about doom and gloom predictions associated with ABS. There’s no doubt they have changed the legal landscape, but one of the factors which perhaps muffled the big bang and could keep a brace on accountants slicing a generous share out of the market is public perception.
Accountants,and by that I mean businesses as well as individuals, have a big hill to climb in convincing the public, that they can be lawyers as well! Lawyers and accountants have been around for a long time and changing the way people think about what they do for a living is never going to be easy.
Without getting too deep into the psychology behind it, the fact is people’s behaviour is often driven by their preconceptions. Changing them is no mean feat. The UK Government, and I am sure many other organisations, are today turning to nudge theory – a softer approach to behavioural change, rather than a forced, direct approach. No. 10 Downing Street’s Nudge Unit is no secret.
The bottom line is that accountants will need to convince the public that they too can provide the kind of services lawyers traditionally provide. They might do it, but it will take time. The public will need to be nudged into it. It might take even longer because not all accountants are queuing up to get their teeth into the law. While ICAEW is keen for its members to be ABS, from what I can see the other accountancy bodies seem less fussed, which perhaps takes the wind out of the sails of ICAEW’s tall task of persuading, or nudging, the public into understanding their member firms can provide the services of a lawyer.
ACCA (the Association of Chartered Certified Accountants) and CIMA (Chartered Institute of Management Accountants) seem uninterested by ABS, though in ACCA’s case (the largest of the accountancy bodies globally) its heavy presence in far off markets means only a small percentage of its members are likely to be interested in legal services in England & Wales.
Yet, beyond what’s happening in accountancy circles, the legal sector has not stood still. We only hear about the doom and gloom of firms vanishing, or being eaten up by a larger firm. There are law firms out there ranging in size who have strengthened their legal service provider credentials, joined up with local accountancy firms on an informal basis for the benefit of their respective clients and even gone international through global networks.
Though it might not have been purely to guard against ABS, it has strengthened their hold in particular sectors and in their localities. Some of these firms are small but have looked to innovate rather than stand still – almost acting like a large law firm, albeit on a smaller scale.
Yet the battle isn’t over. Law firms need to continue to highlight to the public and the business community why they remain the stalwarts of law. Going quiet now won’t do law firms any favours. Communication is key in upholding the current values people associate with lawyers.
Amidst the confusion about accountants and other less familiar legal service providers such as the Co-Op offering law to customers, the public will need clarity – lawyers do law.
There will be some boat rocking when the accountants arrive on Planet Law, but many law firms will be able to withstand it if they tell their story and stick to the fact that they are specialists and not jacks of all trades. Don’t lose faith in the public just yet.