Critical review:impacts of legal services act - Essay Example

?Critical Review: Impacts of Legal Services Act. Introduction The Legal Services Act1 is a legislation of the United Kingdom that looks forward to regulating how the legal services are offered in the United kingdom. This will in the long run bring about effective delivery of services and it will also provide a platform for consumers of legal services to raise their complaints. The other aim of the Act is to bring about legal reform in the legal profession. It is an Act that will see the legal sector transform2 ,in a number of ways such as the general cost of obscuring a legal service, relationship between the client and the legal service providers, handling of legal cases among others. Why the reform There has been need for reform in the area of legal services because the available bodies are regulating areas that are different but are in the real sense overlapping. This has led to confusion to the public, especially when the country is experiencing growth in this market continues. In UK you will find that there are many different kinds of legal professionals compared to other jurisdictions that include solicitors and barristers, legal executives ,trademark attorneys and conveyances . Due to this there is likelihood of confusion. The complex nature of the services resulted into the need for an oversight regulator in the name Legal services board. At the moment you find that clients have to make complaints to several bodies about services received which makes it inefficient, time wasting and resource wasting. Due to the above but few reasons there was need to reform the legal profession hence the enactment of the Legal Services Act of 20073. The reforms were introduced in England and Wales because the present regulatory framework for the legal sector was complicated and always brought confusion to customers seeking services in the legal sector. For instance ,the LSB ,often brought about confusions ,complexity and inconsistency.In addition, it was necessary to put this legislation in place the Office of Fair Trading in 2001, had found some the rules in the legal profession restrictive. The restrictive nature of the legislation, did not allow the legal practitioners to fully execute their powers in providing the best services to their clients. This among other reasons led to the enactment of the Legislation Act of 2007, to bring about the much needed reforms in the legal fraternity. The impacts of the legal Services Act A keen observation will reveal that even before full implementation of the new legislation, changes have already started taking place. One will realize that presently supermarkets, banks and other organizations have already begun providing online legal services. These combines the expertise of a lawyer following easy access accompanied with competitive pricing that the consumers expect. A revelation shows that some law firms have come together to offer their services behind an online brand so that they can become competitive in the market. This is step towards providing online services can be compared to similar services offered in other industries due to the increase in internet use and market liberalization initiatives. More so consumers of all kinds of goods and services look past base line price to see whether they are getting value for money or not. One will surely realize that small law firms which offer an expert personal service look like are attractive to some consumers though they may cost a little more. It follows therefore that if the Alternative Business Structures are implemented they will give consumers a variety of choices on how to get legal services. More over, when the market is competitive, it tends to improve the quality of services provided because consumers would certainly go for the best in the market regardless of the sector. The Act will force the traditional law firms to promptly change the way they operate so that they can withstand competition from entrants in the legal services market. The U.K.’s Legal Services Act of 2007 contains provisions on the external investment in the legal profession, which are still undergoing keen analysis four years after their enactment. The Legal Services Act allows external investment in law firms through the formation of Alternative Business Structures. The House of Commons' website outlines the main benefits of the Legal Services the Act will create once it comes into place. On the Alternative Business Structures (ABSs) it is stated that it will enable lawyers and non-lawyers to work together equally in delivering legal services and other services so that to meet the needs of consumers at different capacities. This implies that External investment will be possible and therefore new business structures will enable service providers to be flexible and meet the demands of the market. Another impact of the Act is that it allows Alternative Business Structures (ABSs) in which non-lawyers in professional play management roles or gets entitled to ownership. For example an organization that deal with human resources or business management can partner with a legal service provider thus creating more value for the company and the consumers. The Act allows those regulators who are approved to authorize bodies that are licensed to give reserved legal services. This is embodied in sections 71-1114. Some Experts have written that they have been convinced for a number of years that the profit that accrue to the world's leading law firms will be a bait the private equity market and that immediately bars on external investment are waived what follows would be inevitable . In his work Tony Jomati who is former Clifford Chance managing partner talked about a number of trends that would impact on the U.K. legal profession. You will find that his trend number six he stated that High-Street legal services will be highly be transformed by this Act. By this he implied that a number of major brands of services will monopolize the provision of the retail legal services. He concludes by saying that it is too early to tell whether existing law firms will be able to develop strong retail brands of services in the manner in which other industries have developed strong brands over a long period. Additionally from trend number seven 5 , incase the reforms are successful then people will expect firms climb the corporate chain and indulge in other forms of capital formation thus remain floating on the market. It therefore follow that once these investment become common within both the legal profession of U.K. and U.S, it will spur the growth towards legal outsourcing and alternative. After getting Royal Assent in October 2007, The Legal profession Act is intended to have far reaching repercussions on the legal profession and it is obvious that it will provide a huge and remarkable boost to the growth of offshore legal outsourcing that allows the formation of ABSs. Paragraph 15 states that Alternative Business Structures will allow non-lawyers and lawyers to work together equally to provide legal and other services .In other words the Act allows non-lawyers to own and at the same time invest in law firms. This opens the doors and opportunities to other institutions like banks, insurance companies, supermarkets which own and invest in existing law firms or to setting up their own firms and market legal services to the public. There is no doubt that the legal profession has realized the concept of legal process outsourcing and it’s vivid that over the next five years there will be a unexpected change in the way legal services are delivered the general public. Further more Technology will enable projects to be unbundled, the implementation of the Act is likely to swing into action due to the large number of people using he internet from a global point of view. Therefore it will have a significant impact on the need for junior lawyers especially if they begin to market themselves. There is no doubt that the issue of external investment in law firms had continued to be part of the traditions of the UK in the legal system but this was not until there was an article published by the Law Society Gazette which was called the ''New Model Law Firms Face Barriers in the U.S'' 6. This article emphasizes that the U.S. has some distance to go before the concept of alternative business structures could find root on its soil. For instance, by the time ABA is implemented in UK, the US will not have adapted to these changes thus making the entire process a little bit challenging. From a practical point of view this stance vividly unworkable for any of the U.K firms that can be described as having magic and silver circle where there is a U.S with thoughts of external investment. At paragraph 15 states that the Alternative Business Structures give permission to non-lawyers and lawyers to work together equally to render legal and other services7. This simply means that non-lawyers can own and of essential they can invest in law firms. Consequently this will open a chain of opportunities and chances to other corporate entities that both will own and invest in existing law firms or will aid them in setting up their own firms and market their services to the public. The Legal Services Act of 2007 can be described as a major achievement of the government of the United Kingdom in provision of legal services world wide. There is no doubt that over the next five years there will be unexpected change in the delivery of legal services to the citizens of the UK and the public at large. Under the Legal Services Act there are provisions which enable law firms to come together or practice what is called merging with other companies like banks and supermarkets where they wish to do so in delivering of their services. Merging has a number of advantages to the firms, for example, it boosts the current capital, extends the customer base, increases the level of expertise within them and generally boosts the level of sales leading to more profit margins. The Act also gives non-lawyers the chance to be partners in law firms and as such to carry out external investment in these firms where there arises a necessity. The Legal Services Act of the UK also allows law firms to become part and parcel of multinational companies and at the same time the Act allows multinational companies to have their own law firms if they desire. Multinational companies promote peace and stability of the world, promote globalization and creation of new opportunities in the markets in which they operate, for example , the Act will lead to the creation of more jobs and investment opportunities. Larger firms will highly benefit from publishing of the Act because it gives them the chance to hang onto what can be described as Alternative Investment Market thus enabling them to diversify their port folio. It is obvious that many lawyers in smaller firms are really threatened by the Legal Services Act. If it can be remembered , since the liberalization of the industry to its current status, a number small firm lawyers lost a large percentage of their income that then was taken by the licensed conveyances the legal service offers. These firms also suffered when new branded legal services were introduced in the market. Some firms are still skeptical of a loss of the source of revenue. Although this legislation will bring about improvement and diversification of services, it is likely to leave the small firms in problems and lead to loss of jobs in the industry. It is important to note that the new Act creates an over-regulator that will oversee the functions of the two bodies namely the Bar Standards Board and the Solicitors Regulation Authority. These bodies will be under oversight to make them conversant with the new legislation. Other unique features of the new legislation lies in the area where there is the creation an Office for Legal Complaints and the implementation of alternative business structures like as multi-disciplinary partnerships. The Act will also establish an oversight regulator which will be called the Legal Services Board and the Office for Legal Complaints which will be mandated with the overall duty of administer an ombudsman scheme whose functions will be to deal with all complaints about lawyers. Conclusion The Legal Services Act changes the legal services market in the UK in two major ways. Firstly, it takes puts the strategic control of regulation and in the hands of an independent body hence taking it away from the legal profession. This board is called the Legal Services Board (LSB). The daily control remains in the hands of the current known regulators which include the Solicitors Regulation Authority (SRA) and the Bar Standards Board (BSB). The LSB is more concerned with the interests of the public being the main consumers of legal services and it is driven by policy making initiatives. Secondly, the Act waives the restriction that that allows only organizations owned and managed by regulated legal professionals to legal services to members of the public. This change will give a new dawn to persons in the non professional sectors of the society. However, it is important to take notice that this does not mean regulated legal services will no longer be regulated. What the Legal Services Act will do is to widen its net in the business models that are available to organizations in the market to offer to public those regulated legal services. The reason is that ownership and funding and management have ceased to be proscribed ,the new structures are known as Alternative Business Structures (ABS in the Legal Services Act. The Legal Services Act 2007 actually changes the way in which legal services are regulated in the Republics of England & Wales. The Act to makes provision for the establishment of the Legal Services Board which is mandated to make provision for the regulation of persons who carry on certain legal activities and furthermore to make provision for the establishment of the Office for Legal Complaints to handle, determine and take note of complaints. More so, it has the overall task that entails to making provision about claims management services and immigration advice and services. The Act also has the mandate to make provision in respect of legal representation that is provided free of charge. Last but not least it has the overall task of making provisions about the application of the Legal Profession and Legal Act 2007 of Scotland and therefore making provisions on the Scottish legal services ombudsman and other purposes connected thereto. Footnotes 1of 2007 of the United Kingdom 2Royal Assent,30th August,2007 3of the United Kingdom 4the legal services Act of 2007 5Tony Jomati-cliiford chance 6The law society gazette UK 7The legal services Act of UK References Andrew A, 2003 The system of professions, University of Chicago press, New York.. Great Britain 2007 Legal Services Act 2007: Elizabeth II, Part 29, The Stationery Office, Oxford. Intendance Research & LPA 2007. Brave New World: Impact of the Legal Services Act 2007 Sweet & Maxwell ,London. Legal Services Act 2007 (Commencement No. 2 and Transitory Provisions) (Amendment) Order 2008 Ministry of Justice, The Legal services Act 2007 Accessed on 19th March 2011 from http://www.justice.gov.uk/publications/legalservicesbill.htm Miller, I and Great Britain 2009 Butterworths Guide to the Legal Services Act 2007 LexisNexis, London. O'Hare, J. & Browne, K 2005. Civil Litigation (12th ed. ed.). London: Thomson. pp. 38.020-38.021. Slapper, G and Kelly ,D 2008 The English legal system Taylor & Francis, Manchester. Thorn J and Lain M 2008 Guide to legal services Act 2007, Lexis Nexis, London. Thomson Reuters, 2007 Brave new world: Impacts of the Legal Services Act 2007, Sweet and Maxwell. Read More