Epoq UK -Delivering Digital Legal Solutions on the Net


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Corporate Law, U.S.

MyLawyer.com Web Service

MyLawyer.com Network of Law Firms

U.K.

Financial Institutions

Radical changes are afoot in the legal services industry. In March 2002, the Council of the Law Society of England & Wales announced that it was seeking reform to Rule 4, reviewing the restrictions imposed on in-house lawyers and their relationships with third parties. The ultimate aim of the proposed changes is to enable solicitors employed by businesses to provide legal services direct to the public. These changes are likely to be recommended provided that consumers are guaranteed the same level of protection as is currently offered to the clients of solicitors in private practice.

The scope of these changes should not be underestimated for they have the potential to manifestly transform the provision of legal services in the UK.

The Current Market

The legal services profession has never been at the leading edge of technology adoption. In the corporate race to derive advantage from IT, lawyers have sat firmly back from the front of the field, working 'pen in hand' and denying that information technology could have a fundamental impact on their business.

Proposed changes to Rule 4 of the Solicitors' Practice Rules

The Law Society is considering lifting the ban on in-house solicitors providing a commercial service on the grounds that Rule 4 is a potential contravention of competition legislation following the OFT report "Competition in Professions".

This could mean that many large corporations and financial institutions such as banks, building societies, insurance companies and claims management companies could offer legal services directly to the public through their employed in-house lawyers.

Specific changes that would assist this competitive environment include:

An abolition of restrictions on which services employed solicitors can provide to their employer's customers;
an abolition of the current ban on fee sharing; and
a relaxation of the introduction and referral codes.

If passed, these proposals would almost certainly increase the levels of competition within the legal industry, resulting in a commercial environment more attune to developing innovative and cost effective legal services.

It is our belief that these industry conditions will intrinsically require the exploitation of technology in order to deliver innovative and cost effective legal services.

In 2001 the total gross income for solicitors exceeded Ł10 billion. The industry consists of approximately 8,360 individual firms in England & Wales of which approximately 6892 have either four or fewer partners. This represents approximately 82% of the market. However, the vast majority of this market operates almost as a "cottage industry" with little emphasis on marketing or strategic investment in IT.

This situation is now ripe for change. Deregulation coupled with the development of IT for legal services will increase the commoditization of certain services with a number of specialties moving from expertise to efficiency (see fig.1). Presently, there are no significant consumer brands, few sophisticated service offerings and almost no business models that employ automation to re-engineer the legal process. Inevitably such a status quo will not remain.

This view is shared by the Lord Chancellors department who regulate the legal profession: "the implications for the business of general legal practitioners are especially far reaching if their clients or customers currently question or doubt value being delivered or added by the traditional legal advisory service. Into this category will fall, for example, the drafting of a wide range standard contracts and agreements. Traditional legal service will be displaced by on-line automatic document assembly" (Civil Justice 1998, emphasis added).

"epoq is at the forefront of change in a market rife with opportunity"