Under new government proposals, non-legal companies are to be given the right to sell legal services. If retailers such as Tesco are subsequently granted permission to offer specialist advice as well as basic legal products, solicitors will have to rethink their marketing strategies to compete in terms of advertising and brand awareness.
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Tesco launched an online legal store this week, offering customers DIY divorce kits, letting agreements and wills, making basic legal services available to millions of people who at present do not use them.
Under current regulations, Tesco is unable to develop this offering further and offer specialist legal advice to customers itself, but must instead refer them to Law Society regulated solicitors. However it can sell basic products such as the divorce kit. But this could soon change following the Clementi review into the ownership rules governing law firms. Under the proposals traditional legal services will be able to combine with other professions, allowing non-legal companies to operate their own law firms.
This has long been touted as the ‘Tesco Law’ model, allowing cheap and straightforward access to justice. Tesco’s initial moves have therefore ironically taken this model a step closer to reality.
Retailers have already successfully stretched their brands into other industry sectors in order to extend their product offering and cement customer relationships. For example, insurance products such as motor and household cover are now widely offered by supermarkets.
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By GlobalDataParallels could indeed be drawn between the insurance and legal sectors. Arguably, with few exceptions, neither has managed to establish successful brands, both lack a consumer-friendly reputation, and traditionally consumers have used both with a degree of mistrust.
However, the legal profession is not as equipped as the insurance sector to defend itself. Unlike insurance companies, the legal sector has not yet been swept by merger and acquisition fever, and therefore lacks players of sufficient size to really make an impact on the consumer. Furthermore, it simply does not have advertising budgets large enough to compete effectively with retailers for consumer awareness.
Some solicitors may view the entrance of these players as an opportunity rather than a threat, providing solicitors with partnership and distribution opportunities. Above all, solicitors must wake up to the fact that these changes mark a wholesale shift in the way legal services are provided.
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