The LSB has in its recent paper seized on what may be a significant trend in the market for legal services over coming years, namely the increasing appetite of in-house legal teams to provide legal services to external clients independent of their employer. In truth, a number of in-house lawyers are doing more than thinking - BT Law Limited and Bucks Law Plus for instance. The recent Winmark Looking Glass report (http://legalfutures.co.uk/latest-news/large-law-firms-most-worried-about-threats-from-abss-and-accountancy-firms) suggests big firms are worried about competition from accountants and ABS's. Reform of Rule 4 of the SRA Practice Framework Rules and the proposed revisions to the separate business rule may mean that the bigger competitive threat is in fact from their own clients.
As such businesses look to turn their in-house teams into profit centres, they may be prepared to brook much lower profitability than the average private practice law firm and may be increasingly discriminating about taking external advice for routine work as they staff up.
Two thoughts spring from this: firstly, it now seems inevitable that much of what law firms did traditionally will be bundled as part of another product from other suppliers - as for instance conveyancing is now offered as a notionally free add-on with mortgages - and that in-house teams are in the prime position to offer such services.
Secondly, in-house practice has always raised a potential challenge in terms of independence, as the recent Brett case amply illustrates. This is only likely to increase as in-house teams take on a more public-facing role. The lot of the compliance professional is starting to look a lot brighter...
Richard Moriarty, chief executive of the LSB, said: “Some in-house lawyers are thinking about innovating and expanding their reach. “The Legal Services Board is concerned that unnecessary restrictions on their ability to do so may have the potential to impose costs and red tape, frustrate choice and adversely affect access to justice. “With over 25,000 in-house lawyers in England and Wales it is important that any restrictions on their practice be clearly justified.”