Why solicitors don’t mend cars

And stick to legal work instead

If my car breaks down I have the number of a breakdown recovery service in my phone. A very sensible precaution and one which millions of motorists take.

My first thought wouldn’t be to call a solicitor. Solicitors are very helpful people - there for you in the event of a crisis, able to calmly help you navigate through life’s legal issues - but on the whole are pretty lousy motor mechanics.

However until recently, I could have called a breakdown service for legal advice. Or a funeral director, or a truck driver, or even an old age pensioner.

The last few weeks has seen the AA announce their subsidiary, AA Law, has stopped taking on new business. Saga Legal Services have done likewise. Co-Operative Legal Services was set up in 2012 with a great deal of fanfare, only to see disappointing results, job cuts, and a swift move away from doing personal injury work. And haulage firm Eddie Stobart set up Stobart Barristers, offering the public the opportunity to consult barristers directly rather than via solicitors, only for the firm to withdraw from the market in 2014.

So what’s going on? Why has this slightly odd assortment of household names been getting involved in the law, and why are they now seemingly getting out again?

It all goes back to reforms of the legal profession that came to fruition in 2012. The idea was that traditional lawyers like solicitors and barristers were too protected, too stuffy and too distant from the public they were supposed to be serving. Allowing the free market in, would blow the cobwebs away, shake things up and put customer service at the heart of everything.

Previously only solicitors could own and run solicitors’ firms. Now they could accept outside funding, be run by non-lawyers, by large companies used to slick customer service, and take advantage of huge economies of scale.

At first sight there was a lot to be gained. Despite what you may have been told about fat-cat lawyers, even the wealthiest solicitors cannot compete against insurance companies, banks and other potential investors in law firms. Many firms took that outside investment, and some became the lawyers working behind the scenes under household name branding, such as AA Law.

The public were supposed to benefit through easier access to the law. If you insured your car through the AA and you had an accident, while you’re on the phone to the insurance company why not have them put you straight through to their lawyers to get your compensation claim started? Sorting out your funeral plan with the Co-Op? Why not speak to someone about getting your will up to date while you’re at it?

As it has turned out, there are a few reasons why not.

Many of these new ventures centred around compensation claims for personal injury. It was seen as a good earner for lawyers and their investors, where although the money earned per case was not necessarily huge, the number of cases – road accident cases especially – had been rising steadily. Big businesses operate on big volumes of work, and injury claims seemed to fit the bill.

This was also an area where there were savings to be made. If most car accidents are simple cases, why do you need a solicitor to run the case at all? Why not just have a solicitor or two to supervise the department, and unqualified claims handlers doing the work at much less cost, and pocket the extra profit? All you need is a computer system to tell them what to do and when, and the claims can be processed quickly and the investors start to see a profit sooner rather than later. Call centre law – what could go wrong?

Actually there is quite a lot that can go wrong, as this case in which an accident victim’s compensation was at first undervalued by £4 million illustrates. Whilst many cases are relatively straightforward, each is individual and it takes an expert eye to spot the ones that are a bit different. I wouldn’t want to trust a legal matter to some guy with a computer, any more than I would trust a solicitor to repair my car.

But as has turned out, it is the financial side that has seen the more recent withdrawal from the legal market by AA and the rest. In 2013 legal fees for most personal injury cases were roughly halved, and the cases most affected were exactly the sort of cases that these new enterprises were working on – large volume referrals of cases from motor insurers and others. Then at the end of 2015 plans were announced that would see fees for these cases cut still further.

For most traditional solicitors’ firms these changes are not welcome, potentially damaging to the rights of injured and disabled people, but the changes are not the end of the world. We don’t rely on sheer volume of cases, on huge advertising budgets or on vast call centres filled with unqualified claims handlers. We are used to dealing with changes, and continuing to support our clients through thick and thin.

On the other hand, for the big nationwide firms, the news was pretty bleak. If you spend big money on running a big firm you need big money coming in to pay for everything. If you have thousands and thousands of claims to handle but every single one now brings in half as much money or less, that is a huge loss of income and the bills still need to be paid. Slater and Gordon, a giant Australian law firm that has expanded heavily in personal injury work the UK in the last few years funded by outside investment, has seen its share price plunge in the past year.

So what can we learn from all of this? Perhaps most of all that despite the predictions, getting into legal work isn’t as straightforward as was assumed. Big brands may bring a familiar name and reputation, but the best brand name of all is a simple one – solicitor.

Solicitors are already providing a modern, accessible service whilst at the same time offering the expertise you don’t get from cutting corners. Solicitors have been exposed to competition from all the big brands, all the new arrivals, and it has been the newcomers that have been unable to compete, not the solicitors.

So if my car breaks down I will use a breakdown service. If I want to arrange my own funeral I will use a funeral director. And if I need to use legal services, I will call a solicitor.

And if you need a solicitor for legal advice on a personal injury case (rather than a mechanic for car advice) contact Richard Moon or the Hunt & Coombs Personal Injury team on 01733 882800.

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This article has been prepared for general interest and information purposes only; it does not constitute legal advice and should not be relied on as such. While all possible care has been taken in the preparation of this article, no responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by the firm or the authors.