Ken Clarke, last lord chancellor but seven, likened the ABS ‘revolution’ to the ‘Big Bang’ of 1986.
Older readers will recall that deregulating the City in October that year transformed London into a financial centre to rival New York. Second only to the defeat of organised labour attendant upon the 1984/85 miners’ strike, the Big Bang was the most significant economic event of the decade. For better or worse.
Many years later, the vintage champagne would turn sour with the collapse of Lehman Brothers. But back when red braces were de rigueur and mobile phones the size of bricks, the Krug flowed like never before in the Square Mile.
The flamboyant Clarke was never knowingly undersold, of course. And, 10 years after the SRA licensed its first ABS, we can say that his characteristic bullishness has proven to be overdone. Of the heavyweight consumer brands in the vanguard of the legal services ‘revolution’, many struggled, retrenched or abandoned the market altogether.
The Co-op is perhaps the most symbolic. Infamously, back in 2013 a senior executive at the trailblazing consumer ABS declared that putting the customer first was an ‘alien approach’ to solicitors. Unsurprisingly, Co-op Legal Services’ subsequent trading woes met with a hefty dose of schadenfreude among the high-street practices it had sought to eclipse.
Still, I must avoid the occupational hazard of simplifying to exaggerate. In truth the impact of ABSs has been great – just not in the way many predicted. We now have established, stockmarket-listed law firms, for example; though as Knights demonstrated this week, shares can go down as well as up.
Profit-hungry external investors, we were told, would compromise the profession’s independence and integrity. That has not happened, so far as we can tell (though some had their fingers burnt).
Perhaps most significantly, the death of the ‘traditional’ law firm was itself grossly exaggerated. Entrepreneurial equity partners were able to adapt and compete with the interlopers.
It used to be axiomatic that solicitors did not make good business people. If the last decade has taught us anything, it is that this is no longer true. If it ever was.
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