CREW Magazine, 15th September 2013

Sarah Wyburn considers the important role played by small legal practices in the high street economy.

Even as the UK economy is beginning to show signs of sustained recovery, with growth forecasts looking more positive than over previous quarters, and with overall unemployment levels apparently falling, the pressures on many of our small towns and high streets continue to be great. The closure of many national chains such as Woolworths, Comet, Jessops, and Clinton Cards have been well publicised. Much of the focus in the debate about the future of our high streets has so far largely been concerned with retail, with reports being undertaken by Mary Portas and more recently by Bill Grimsey. However, the debate until now has taken little account of some of the key anchor institutions on our high streets, and one such institution is the high street legal practice.

There are around 10,000 high street legal practices in Wales and England, with SME practices representing approximately 98% of all solicitors firms in the UK legal economy. Each of these practices typically employs between half a dozen and few dozen people each. Therefore, these institutions, are not only a key part of the local economic viability of many small towns, but they employ collectively, a significant number of people, many of whom will tend to live within the town in which they are based. Much of the debate around the viability of small towns has focused on impact of reducing footfall, brought about by out of town retail parks and supermarkets, parking difficulties in small towns, and the closure of high street retail. The presence of the high street legal practice is something which has, so far, been resistant to much of the out of town pressure, however, the declining number of people using towns is now beginning to have an affect on these practices that are so dependent on their physical visibility in such towns. Yet, despite these pressures, these firms have largely survived as viable businesses, and have continued until now to attract clients into towns as they offer services that are both widely needed and actively sought out.

As of April this year virtually all legal aid for family law, save, for example, for all but the most extreme cases of domestic violence or care proceedings, where significant harm to a child may have occurred, has ended. Further reforms to legal aid are being planned; including significant cuts and changes to criminal public funding. These areas of law provide services to individuals that have largely sought support from high street legal practices, rather than larger corporate entities. For many small firms, the end of legal aid will mean inevitable closure, as they are forced to fight for a share of privately funded cases against both larger firms and each other. The consequence of this is clear, there will be fewer high street firms, and those that remain, will typically be concentrated only in those towns with relatively affluent populations. Many of the poorest towns, such as those dotted across the South Wales Valleys, will not only be left without access to legal services, but will also see even more gaps left on their high streets, when many of these practices are simply not viable. Ironically, it is those small towns that are currently most struggling that are likely to be hardest hit by the reforms to legal aid.

Added to the reforms to legal aid already implemented and outlined above, additional pressures are likely to arise from the further “Transforming Legal Aid” proposals now being considered by UK Justice Secretary Chris Grayling. These reforms could potentially see somewhere in the region of the current approximately 1500 firms in the UK able to offer public funding for representation in criminal cases, being reduced to around a quarter of that number. Changes to the rules governing legal practices in terms of how they are set up and run, following the Legal Services Act 2007, has opened up the profession to large established brands potentially entering the market. The most commonly imagined scenario sees the new entrants dominating the market through a combination of economies of scale, marketing budgets, and the kind of brand recognition that most high street law firms can only dream of. Existing firms in affluent areas could be swallowed up or driven out of business; whilst those located in poorer towns would simply become financially unfeasible. It is the combination of the current proposals, which would see the tendering of legal aid contracts potentially going to either the lowest or most sophisticated bids (which are likely to come from one of the new entrants, possibly as some have suggested maybe even Stobart Law?), the implications of the 2007 Act, and cuts that have already taken place within family law legal services, which are likely to have a cumulative impact on high street practices as a whole.

Small high street legal practices are significant employers of local people, and the pressures outlined above are undermining the profitability and viability of these firms. The reforms of legal aid mean that many people are now unable to afford legal representation on a whole series of issues, and already struggling high streets and small towns are likely to see a growing number of small legal practices disappearing altogether, further removing anchor institutions that play a key role in holding towns together. Although the impacts are starting to be keenly felt already, the major impacts are likely only to emerge, in my view, in 12-18 months time, when these reforms and future proposed reforms have been fully realised. I part own a practice that I hope will be largely resistant to the pressures outlined above, as it is a specialist family law practice where legal aid has never represented a significant proportion of our work, but my concerns are for the wider profession and the communities and towns that they serve. I practise in Cardiff, but I live in one such town in Ebbw Vale, where these effects are most likely to be felt.