Is there new Life breathing into Legal Aid firms?
As we all know recent governments have cut the legal aid budget down to the very minimum and still they look to make savings. Legal aid goes to the very core of what the legal profession should be about, helping the small person stand up to larger interests but this seems to have been largely forgotten in a rush to save costs and punish “fat cat solicitors”.
However, there are still brave souls out there who see the law as a vocation rather than a means of getting rich who are valiantly trying to provide these services. However to be able to do this they also need to be able to make a living and the truth is that, just as in the commercial world, size is key.
In the past 12 months we have arranged three mergers within the broad legal aid world. These have tended to be either where one party wishes to retire or where the burdens of running the business are directly affecting the firms ability to survive let alone thrive. Afterall, compliance and PII are just as onerous for a small firm in Clerkenwell or Clapham as they are for a firm in a glass tower in the City. One pleasant change that we have noticed is that firms in this sector are not as competitive as in the commercial world and so the cultures tend to be less aggressive and more collaborative allowing the firms a much better chance of success at blending the teams together.
We have a number of clients who appreciate that scale and systems are the only way that they can make a profit whilst also providing the legal services that society needs. These firms are willing to invest in the sector and take on smaller firms, using the central hub and spoke model to make each office a route to the local market with a % of central costs rather than a standalone silo with 100% of the costs. Thus the community can access good quality local legal services, the teams can continue to make a living and the owners enjoy a profit.
So, in our view, legal aid and community legal services are not dead, they might be injured and pretty sore but there are still dedicated solicitors out there trying to help their communities and combining with a larger firm is one way of guaranteeing that they are able to keep on doing so.