Legal Market Round-up: September 2012

No comments, posted on September 4, 2012


Here come the Americans as Rocket Lawyer starts recruiting law firms. Rocket Lawyer, the Google-Ventures backed online legal document service, has launched its On Call programme into the UK, the first step towards the much-anticipated website going live to the public at the end of the year.

On Call is a panel of lawyers from whom Rocket Lawyer users can seek help if they feel they need legal advice. It is free to join but firms have to abide by service standards and discount their fees by a third. Only two or three firms per region of the UK will be able to join.

Mark Edwards, Rocket Lawyer’s UK corporate vice-president and general manager, said On Call introduces law firms to a new way of doing business, as well as new customers. “Rocket Lawyer has a proven track record in attracting new customers online. By investing heavily into advertising and marketing, Rocket Lawyer will generate a steady stream of new business for law firms.”

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Leeds-based ABR plans to become UK’s biggest criminal practice. The criminal division of Leeds-based firm Clarion Solicitors is to open two new offices in northern England by the end of the month and another three offices by the end of the year following the acquisition of offices in Harrogate and Huddersfield less than a month ago.

Fraud, crime and regulatory practice Clarion Advocates, which was formed as a separate division of Clarion Solicitors in 2010, re-branded as ABR Solicitors in July this year as part of an aggressive growth strategy to see it become England’s largest criminal practice.

After announcing its new name in July, ABR took on criminal specialist Roger Clapham, acquiring his practice in Huddersfield, and Simon Crosfield & Co in Harrogate.

Andrew Duncan, managing director of ABR Solicitors, told The Lawyer that ABR is now focused on buying and merging with criminal law practices across England, starting with criminal practices in the north before opening offices in the south and west.

He refused to say which two offices ABR will be acquiring in the next month, but did confirm that they are in northern England and that details will be formally announced in September.

Another three offices will then be acquired by the end of the year, with up to 10 acquisitions planned for 2013, Duncan confirmed. “The market is very supportive – lots of small firms are looking at the knife edge, and this is a proactive way of throwing out a lifeline,” he said.

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Scotland to compete with Northern Ireland as low-cost law centre. The Scottish government’s economic development wing is courting London-based managing partners in a bid to emulate Northern Ireland’s success in enticing top firms to open low-cost bases in the country.

Scottish Development International (SDI), which is the international economic development arm of the country’s government, has been visiting managing partners at top 50 firms to urge them to open support service offices in Scotland in a bid to boost its economy.

The talks are part of SDI’s three-pronged plan, which started gathering steam in April this year, to bring more legal services work to Scotland. Under the plan, SDI is also targeting legal process outsourcing (LPO) providers, and corporates and banks with large in-house teams, as well as private practice firms.

SDI’s vice-president of financial services Philip Jones said the body was inspired by Invest Northern Ireland’s success attracting Allen & Overy and Herbert Smith to the country in return for public funding (4 February 2011).

Law firms and companies that open legal support centres in Scotland may also have access to grants through Scotland’s Regional Selective Assistance programme. The amount of money allocated to a firm or company depends on how many people it employs and how much it pays them.

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Winckworth Sherwood converts to ABS. City firm Winckworth Sherwood has said it has no immediate plans to seek external investment despite being officially granted an alternative business structure (ABS) licence.

As the firm was previously trading as a legal disciplinary practice (LDP) to allow non-lawyers to become equity partners, it was required to convert when the Legal Service Act came into force.

There have only been a handful of ABS conversions approved so far, with the speed of the process being criticised by some firms but defended by the SRA and Legal Services Board chairman David Edmonds.

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Partners block promotion prospects. One in three solicitors in private practice blames their ‘stifled’ career progression on increased competition from their peers combined with fewer partners retiring, a survey has revealed.

The survey of more than 200 private practice solicitors, published today by recruiters Laurence Simons, quoted Law Society statistics showing that the number of partners in the profession has grown by two-fifths since 1990, whereas the number of non-partner solicitors has grown by more than double that figure.

In the same period there has been an almost one-third decline in the number of partners retiring or otherwise leaving the profession. The result is a ‘bottleneck’ of more candidates competing for fewer partnerships, the survey says.

Laurence Simons director Guy Adams said: ‘The decrease in retirement figures has had a negative effect on promotion opportunities at all levels. Where previously, years of tenure guaranteed a relatively quick succession up the corporate ladder, lawyers now have to consider alternative career strategies in order to achieve promotions.’

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Finers Stephens Innocent and Howard Kennedy agree terms for £45m merger. West End firms Howard Kennedy and Finers Stephens Innocent (FSI) are set to merge in a £45m tie-up. The firm expects to become Howard Kennedy FSI by 1 November this year. The combined firm will have 351 staff including 88 partners and 125 fee-earners, and a total revenue of £45m, pushing it into the top 60 of The Lawyer UK 200.

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Now the Canadians target UK’s online legal services market. An online legal document business from Canada is set to launch in the UK this month, starting with a will which it plans to promote through group buying websites like Groupon.

Dynamic Lawyers is to sell its Will-O-Matic product at £49 through its site, or £24 through group buying sites. It joins America’s Rocket Lawyer and LegalZoom in eyeing up the UK online legal services market, where Epoq currently dominates.

As with other online services, the Will-O-Matic involves a questionnaire that generates a customised will. Founder Michael Carabash, a Canadian lawyer, said he had yet to see software “as comprehensive or as flexible” as his. “It’s my little way of helping everyday people achieve better access to justice through technology.”

The company has sold 8,000 wills in Canada since opening for business this year and recently launched in Australia as well.

Mr Carabash said the plan is in time to expand to offer other legal documents in the UK – as Dynamic Lawyers already does in Canada – starting with the likes of powers of attorney, pre-nuptial agreements and leases. He also wants to move to a lawyer review service. “But at the moment we just want to showcase our clever software,” he said.

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Cost dominates thinking of consumers when choosing solicitors. The economic climate is exacerbating the focus consumers put on cost when choosing solicitors, early findings from Solicitors Regulation Authority (SRA) research have indicated.

However, there were also good signs for high street firms in the pull they have with their local communities.

The research aims to look at the barriers consumers face in achieving the right outcome when they have a legal requirement.

Richard Silver, SRA policy officer for consumer affairs, said: “We found that many people were familiar with firms with local offices, which indicates the power the high street practice still has in some communities. We also found that in hypothetical scenarios around conveyancing, it was cost that came back time and time again as the main decision criterion when appointing a solicitor.

“A few mentioned other factors, like speed or communication, but the over-riding factor was definitely looking for the cheapest quote first and foremost. We have seen this before in some of our previous consumer research but perhaps not as starkly as this – I suspect this is a reflection as well of the economic climate.”

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Survey reveals mixed response to Conveyancing Quality Scheme. Just over half of conveyancing firms have applied for accreditation under the Law Society’s Conveyancing Quality Scheme (CQS), with those yet to do so unconvinced of the benefits, according to new research.

The survey of 586 conveyancers by Searches UK found that 52% had applied for CQS (including 4.3% who had been rejected), and that more than four out of five believed it had helped their firms maintain or achieve panel membership with some lenders.

There was also hope that the society’s recently announced professional indemnity insurance package for those with CQS accreditation would lead to lower premiums, although some respondents were sceptical about this happening.

However, there was a mixed response to an open question for respondents’ overall opinion of CQS. Some considered it “excellent”, others a process-driven scheme that does not judge knowledge of the law, while a number saw it as having limited value or even being a waste of time and money.

Of those yet to apply for CQS, more than two-thirds (69%) said they had no intention of doing so soon. Some were ineligible, like licensed conveyancers – although 70% of respondents thought CQS should be open to them – while others, such as sole practitioners, felt it would not be worth their while as they would still face enormous difficulties in getting on panels. “A few have no intention of joining because they simply do not believe in the merits of the scheme,” the survey reported.

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Linklaters in talks with South Africa’s Webber Wentzel over alliance. The deal is similar to its recent joint venture with Australia’s Allens Arthur Robinson (now Allens). The magic circle firm is looking to enter the African market after completing the Australian deal earlier this year. Linklaters had scouted out the market, with the firm holding talks with a number of firms about the possibility of linking up to combine forces across the continent

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MoJ moves on claims companies. Claims management companies (CMCs) will be banned from offering incentives to the public if their solicitors accept a case, under new rules to be introduced in April 2013, the claims management regulation (CMR) unit has announced today.

The CMR unit’s annual report, published today, also revealed that the unit took action against 409 CMCs for poor performance in the financial year 2011/12 and closed down 260 of them.

Among those closed down, 66 had been licensed to offer financial services including payment protection insurance (PPI) repayments.

The report said that the majority of complaints to the CMR unit in the past year had focused on 15 firms, all of whom offered PPI-related services.

The CMR will take action to ban CMCs from offering incentives, such as cash, shopping vouchers or goods, if their solicitors accept a case. The move is designed to address concerns that the incentives offered encourage people with weaker claims to sue for their own gain.

The ban will come into effect in April 2013 and be implemented through a change in the regulatory rules that firms have to abide by in order to have a licence to offer claims management services.

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Eversheds prepares ground for imminent Beijing launch. Eversheds is gearing up to launch an office in Beijing later this year as it awaits the “imminent” approval of its licence application.

Eversheds first announced that it was going to open an office in Beijing in September 2010, after dispatching company commercial head Peter Halpin (now client service director) and head of international Stephen Hopkins to China to draw up a business case for the launch. At the time, Eversheds predicted that it would be on the ground in Beijing at some point in 2011.

This timeline has now been revised, with managing partner Lee Ranson saying that that the firm would launch its Beijing office at some point during 2012.

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Surge in demand for law degrees as A-level pupils get results. Two privately owned law schools have bucked the UK-wide trend of fewer students applying for university places by reporting a ‘surge in applications’ for their LL.B law degree courses.

Meanwhile, as 335,000 pupils in England, Wales and Northern Ireland receive their A-level results today, the Joint Council for Qualifications (JCQ) has published figures showing that the overall pass rate has risen again for the 30th successive year, although the proportion of entries achieving two or more top grades has fallen for the first time in more than 20 years.

BPP University College says it has seen a 79% increase in applications for its law degrees, while the College of Law has reported 50% more applications than expected for its new two-year law degree, due to start in September 2012. These figures contrast with reports that UK applications across all university subjects are down 8.7% compared with last year.

BPP chief executive Peter Crisp attributed the ‘surge in applications’ to ‘affordable tuition fees’ and to more students opting for ‘career relevant degrees’, such as law.

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Insurers plan their own legal DIY to hammer down costs. In a move that could transform Britain’s legal market, several big insurance companies are considering setting up their own law firms in an attempt to reduce the cost of fighting disputes. Insurers are aiming to exploit new ownership regulations to strengthen their own internal legal departments and reduce the costs of handling litigation, according to research by Espirito Santo Investment Bank.


Irwin Mitchell shows a flush of ABS licences. National firm Irwin Mitchell has today become the first multi-licensed alternative business structure, with five licences covering a range of its business operations.

The five licences cover Irwin Mitchell LLP; Ascent Collections Ltd, which offers field agency and debt collection services; Coris UK Ltd, which offers international assistance and insurance claims handling services; Irwin Mitchell Trustees Ltd, which accepts appointments as a trustee, executor and estate administrators; and Irwin Mitchell Trust Corporation Ltd, which accepts appointments to act as deputy from the Court of Protection.

The SRA has also approved the appointments of Glyn Barker, the former vice-chairman UK of PricewaterhouseCoopers, as chairman of Irwin Mitchell’s parent company, IMCO Holdings Ltd, with immediate effect and Mel Egglenton as a second non-executive director and chair of the company’s audit committee, a role he previously held with accountants KPMG.

Irwin Mitchell is one of the largest firms in the UK, with 60 solicitor members, five non-solicitor members, 75 salaried partners, and 20 non-solicitor directors and associate directors.

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Allen & Overy has become the final magic circle firm to reveal its newly qualified (NQ) retention rates for autumn 2012.

The firm is holding on to 46 out of 58 of its qualifying trainee cohort, giving it an NQ retention rate of 79 per cent.

The result marks a slight boost from the firm’s September 2011 qualification round, when it kept 38 out of 53 trainees, leaving it with a 72 per cent retention rate.

Meanwhile, rival magic circle firms Clifford Chance, Freshfields Bruckhaus Deringer and Linklaters posted NQ retention rates of 77, 89 and 78 per cent respectively.

The news comes after Nabarro posted an NQ retention rate of 69 per cent, holding on to nine out of 13 trainees. It offered jobs to 11 qualifiers.

Elsewhere, Scottish firm MacRoberts announced the lowest NQ retention rate to date, at 18 per cent, with two out of 11 qualifiers accepting roles at the firm

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Browne Jacobson expands into South West with Exeter launch. Browne Jacobson has cemented a record year of growth by launching in the South West with a 25-strong team hired from local firm Veitch Penny.

The deal involved Brown Jacobson buying the lease of Veitch Penny’s four-floor Exeter office and sub-letting two of the floors back to the local firm.

The defendant insurance and employment practices team transferring to Brown Jacobson includes head of insurance Mark Fowles and partner Jo Pruden, whose clients include the NHS Litigation Authority, Devon County Council, Travelers Insurance and Gallagher Bassett.

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Private equity marches in to ABSs as Parabis application. City-backed Parabis Law has become the first firm owned by private equity to be licensed as an alternative business structure (ABS). The announcement today brings to 20 the number of ABS applications to be cleared by the Solicitors Regulation Authority.

The Parabis Group is a legal and claims management company employing more than 1,000 people and with a turnover of £108m in 2011-12. In February this year it announced the sale of a ‘significant share’ to a private equity firm, Duke Street, in a deal valued at between £150m and £200m. It had already applied for ABS status. Duke Street, based in London and Paris, was founded in 1988 as Hambro European Ventures and bought out in 1998.

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Posting on social media websites could cost you. The Law Society of Northern Ireland has said that its members are increasingly having to work with clients who are seeking legal advice following comments posted about them on social networking sites such as Facebook and Twitter. The Society believes that a new approach is needed to inform and educate the public about the use and misuse of social media.


Legal education system ‘not fit for purpose’. Evidence of ‘fundamental gaps’ in lawyers’ skills suggests that the current education system is not fit for purpose, according to a discussion paper published as part of the Legal Education and Training Review (LETR).

The 50-page paper said that changes to the current system of legal education and training are likely to be required to ensure that legal professionals possess the skills necessary to prosper in the future legal services market.

It added: ‘There are gaps in core knowledge and commercial skills. More fundamental gaps have been highlighted as regards client relations/communication skills, ethical awareness and organisational skills. If this is correct, it is difficult to see that the system as a whole is fit for purpose.’

The LETR, set up last year by the SRA, the Bar Standards Board and ILEX Professional Standards, is due to report in December. The paper said evidence gathered so far indicates there is too great a reliance on initial training to guarantee ongoing competence and quality. It suggests new business models will ‘disrupt some of the traditionally distinctive ways of working associated with particular titles’, and that individuals will have to show a willingness to develop new skills.

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Irish firm William Fry is launching a London office in a bid to capitalise on Ireland’s growing international economy. The office will be headed by corporate partner Stephen Keogh, who focuses on M&A and private equity work.

William Fry previously had a London office but closed it in 1998. Its domestic rivals all have a presence in the City. The firm is taking office space in Heron Tower, where it will have Irish competitor Matheson Ormsby Prentice for a neighbour.

Keogh said William Fry partners had been regularly travelling to the UK to meet clients, both companies and international law firms, and it made sense to have a permanent presence in London.

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