Winds of change for law firms in 2012

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As legal professionals position themselves to endure the peaks and troughs of an ailing economy, a number of different trends have emerged in the legal industry in recent past. Most of these trends help law firms and organizations become more competent, dynamic and competitive in a global market. Other trends result from changing demographics, attitudes and work styles. Today clients insist higher service levels for lower fees. As a result, law firms continue to face pressures to strip out inefficiency and cut costs and the partnership model is being re-evaluated as the sector faces up to new market entrants.

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Winds of change for law firms in 2012

  1. 1. WINDS OF CHANGE FOR LAW FIRMS IN 2012 Presented By:- Rajni Minhas Operations Head-Legal Draft n Craft
  2. 2. BIGGEST CHALLENGES TO BE FACED BY LAW FIRMS IN NEXT TWO YEARS1. UK Economy2. Legal Services Act3. Introduction of Alternative Business Structures4. Mergers and Acquisition5. Legal Aid, Sentencing and Punishment of Offenders Act(LASPO)6. Renewed focus on legal costs- Jackson Report7. Rise of Fixed fee
  3. 3. UK ECONOMY First double-dip recession since the economic turmoil of 1975 The economy shrank 0.3 per cent in the final quarter of 2011. Another 0.2 per cent in the first quarter of 2012 UK needs £50bn of extra cuts – IMF More wealthy Britons set to flee‘ London 2012 Olympic games can restore winning feeling to fragile UK economy The Confederation of British Industry downwardly revised its forecast for economic growth in 2012 Sustained period of above-potential growth from 2014
  4. 4. LEGAL SERVICES ACTOpens Doors for Supermarkets, Banks, Other Non- Law Corporations to Own, Manage Law FirmsHigh Street firms struggling from all-comersMORE THAN,RBS, the Co-op, HBOS, NatWest, DAS, Allianz and Abbey Santander - Launched Legal ServicesOpportunities for Law Firms
  5. 5. • Premier Property Lawyers became the first ever ABS in England and Wales on 6 February 2012, licensed by the Council for Licensed Conveyancers• DLA Piper investing in a prospective ABS called LawVest• Irwin Mitchell intending to become an ABS and seek external capital• Proposed takeover of Russell, Jones & Walker (RJW) by Slater & Gordon• The legal arm of the Co-operative becoming an ABS at the earliest opportunity• Staffordshire law firm Knights has struck a deal to accept investment from the private equity Company
  6. 6. MERGERS AND ACQUISITION  Global M&A activity for 2011 totaled $2.17tr and is up by 2.5% from 2012  Improved size structure  Better opportunities post LSA  Helps solve succession issues  Manchester headquartered DWF and Scotland’s Biggart Baillie have confirmed that they will merge to create a near £120m firm  Top 20 British firm Pinsent Masons merged with leading Scottish firm McGrigors  Shoosmiths is merging with Edinburgh’s Archibald Campbell & Harley
  7. 7. LEGAL AID, SENTENCING AND PUNISHMENT OF OFFENDERS ACT(LASPO)The Act:• Delivers structural reforms to the administration of legal aid, and prioritises limited financial resources to target legal aid to those who need it most and for the most serious cases• Tackles the excessive costs of no win no fee cases in civil litigation and bans the payment and receipt of referral fees in personal injury cases.• Makes it an offence to threaten people with a knife in public and at schools, with offenders receiving a minimum prison sentence (6 months for adults and a 4 months Detention Training Order for 16 and 17 year olds)• Makes prisoners work harder, longer and on meaningful tasks, earning money for victims• Makes it a crime to squat in people’s homes• Creates a new offence to appropriately punish drivers who seriously hurt others by driving dangerously
  8. 8. RENEWED FOCUS ON LEGAL COSTS JACKSON REPORTThe abolition of recovery of CFA success feeThe abolition of recovery of ATE premiumsAn increase of 10% in personal injury general damagesA ban on referral fees in PI casesFixed costs for fast track PI and in future for all fast track casesLegalisation of contingency fees
  9. 9. RISE OF FIXED FEE
  10. 10. MAJOR PRESSURE FROM CLIENTS?  Fixed pricing  Reduced costs  Credit terms and billing  Higher Service Levels  Improved electronic communication  Speed of response over face-to-face contact
  11. 11. CONCLUDING REMARKS Increase in Client demands gives rise to better services Number of competitors is likely to increase Partnership model is being re-evaluated as the sector face new entrants Non-lawyers to invest in law firms in England and Wales Outsourcing set to Increase- to help combat costs and fight off compensation
  12. 12. THANK YOU
  13. 13. Rajni Minhas,Operations Head- Legal rajni@draftncraft.com l www.draftncraft.com Draft n Craft Legal Outsourcing Pvt. Ltd.India: +91 11 2341 4576 l USA: + 1 516 515 3510 l UK: + 44 20 3318 3559

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