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Great News for British Legal Consumers

In brighter news, Law.com reports that the UK's draft Legal Services Bill has been unveiled and is expected to pass within the year. (This bill follows from the rather radical Clementi Report.) The bill would not only allow multidisciplinary practice, but would also allow law firms to accept outside investment from non-lawyers or even list on stock exchanges. While the Law Society of England and Wales mostly limits its criticism to fear of excessive government regulation and threats to the "independence" of the legal profession, the bill's nickname gives the game away: it's the Tesco Law.

Tesco (for my readers unfamiliar with the UK), ranks up there with Amazon.com as one of my "this is how you do it" companies. They're phenomenally successful and have leveraged their brand far beyond their massive grocery superstores. They figured out that online grocery shopping made economic sense if they used their own stores as warehouses. If you're a customer, they want to provide your auto insurance for the trip to the store, the credit card you use to check out, and if you have a problem, the VOIP service you use to complain. And the best part: in all my years as a customer, I never really had a complaint with them. [1]

And hence the bill's nickname. The fear is that after the bill passes, Tesco could buy a law firm or two and start providing cut-rate legal services to home customers. There's no reason to think they won't be successful. They can afford to invest massive amounts of IT into their legal operations, they can take advantage of economies of scale, their marketing budget is a smidgeon higher than the average law firm's and potential customers walk through their aisle every day.

To advocates of legal "professionalism" the idea is anethema, and the Legal Services Bill will leave legally-naive old ladies vulnerable to exploitation from unscrupulous Corporate Britain. But after the predicted parade of horribles fails to appear, the bar's advocacy of other "protections" that keep lawyer's salaries comfy will look even more questionable. Given a few years, those unauthorized practice laws may start looking more like restraints on trade.

Of course, for American or even international lawyers in Britain, the effects of the bill may be limited. An American lawyer in a British firm, for instance, would still be governed by the rules of the bar of his state. But the bill is one of the first signs that the edifice is crumbling.

For me, this presents a fantastic opportunity. Certainly I'd do well to pay my school loans off as quickly as possible, but that was always the plan in any event. In the medium term, I'd expect reforms like this to have an across-the-board reduction in legal costs (and legal salaries). [2] That makes my chosen career potentially less lucrative, but also a lot more exciting. (Just as I'm glad I was part of the internet business after the tech bubble burst. Financially, there was a lot more risk, but the work was much more challenging.)

[1]: Of course, being large and successful, they're probably loathed by the British left, but I don't know if there are any anti-Tesco documentaries (a la WalMart) out yet.

[2]: Like all large and long-term predictions, this one is risky and full of caveats. Suffice it to say that this at least increases the risk that lawyers will be paid less in the future.


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I'd say the characterisation of Tescos as a good company is pretty spot on. Like most big supermarkets they have some issues in their supply chain, but like most big supermarkets they're genuinely trying to improve. I'd also agree with the assertion that law is going to get commoditised, or at the very least much, much cheaper. I'm not sure if I'd expect this to lead to lower salaries for lawyers - or fewer lawyers supported by lots of para legals, customer service reps and computer systems. (Room for a startup?) Either way I'd agree that some of the value of your degree is under threat. However it's not the degree you paid for it's the contents of your head - at least that's what I always tell myself.
Well, remember, before anything happens to the value of my degree, about fifty bar associations have to suddenly be disbanded. American lawyers may not have that much to worry about in the short term, where that is defined as "the amount of time it will take me to pay off my loans."

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