In May 2007 Slater & Gordon, an Australian personal injury firm, became the first law firm to go public. At the time, I discussed some of the implications of publicly held law firms, including the commoditization of legal services. I also gave some tips on how you can reduce the risk that your law practice will become a mere commodity.

Revolution in the U.K.

In October 2007 the United Kingdom passed the Legal Services Act (“LSA”), which authorized alternative business structures (“ABS”) with non-lawyers in professional, management or ownership roles in law firms. One of the regulatory objectives of the legislation was to promote competition in the provision of legal services. The LSA became effective in 2011, and in 2012 the Solicitors Regulation Authority approved the first four ABS firms. One of them, Co-operative Legal Services, launched a fixed fee family law service, with the intent of bringing “a refreshingly different approach to family law” with an “easily accessible and affordable” range of services. It is a division of The Co-Operative Group, a retail giant in the UK with 4800 retail outlets and 7 million members. So I guess you could say it is now the Costco of legal services.

Relevance to U.S. Solos

Why should a little solo law firm in the U.S. care about the developments in law firms across a big ocean or half-way around the world? Because we all live in a global economy now. Those events in the legal systems of other English-speaking countries, coupled with the ever-increasing developments in technology could be the harbingers of doom for your law practice if you don’t. It is essential that you take steps to modernize and systematize your practice as much as possible now. Make it as efficient, convenient and cost-effective for clients as you can.

As venture capital fuels online developments in legal services, many clients will still prefer to deal with a lawyer in person. When there are documents and even lawyers readily available online, however, a significant percentage will forego slow and costly in-person service for something faster and cheaper. We’re the same way. A lot of us used to get a CPA to do our taxes, but now we use TurboTax, even though we know we might make a few mistakes in the process. We know that the meals are better-tasting and healthier at our local organic restaurant. More times than we’d like to admit, however, we hit the fast food drive-through because it’s on the way home, quick, easy and cheap.

Current ABS Status in North America

The ABA Commission on Ethics 20/20 asked for comments concerning permitting ABS firms in April 2011, although they had already declined to recommend permitting passive equity investment in law firms by non-lawyers. In April 2012 the Convocation for the Law Society of Upper Canada approved the creation of a working group to study ABSs. You might think that your state will never permit non-lawyers to own an interest in law firms. I predict that almost U.S. states will do so within the next 10 years.

Cracks in the Fortress Walls

Non-lawyers have long been allowed to own an equity interest in law firms in the District of Columbia. A bill was introduced in North Carolina in 2011 to permit non-lawyer ownership in law firms. The law firm Jacoby & Meyers is pursuing lawsuits against New York, New Jersey and Connecticut challenging their prohibitions against non-lawyer investors in law firms. The system hasn’t changed yet, but the rumblings have begun.

Added Pressure from Technological Advances

In the meantime, non-lawyer entities are investing in technology and creating online venues for consumers to download legal documents cheaply or even for free. Here is an article at TopConsumerReviews.com rating 7 non-lawyer online sites for divorce documents. A few pioneering law firms have gotten into the game by offering attorney-assisted online legal documents, like the Law Office of Stettner & Morris at MorrisFamilyLaw.com and Petrelli Law, P.C. at FlashDivorce.com. Other attorneys upload legal forms for free at Docracy.com to increase their online visibility and demonstrate their expertise, winning new clients when users realize that they need a lawyer’s help. Legal aid services in some states offer free automated self-help legal forms online.

BigLaw Jumps into the Fray

The most significant development in my mind, however, has been the launch of Riverview Law in 2012. Riverview Law is an online ABS that offers lower cost fixed-fee legal services and fixed-fee annual contracts for small to large companies in the U.K. It has a free online portal with unlimited access to advice pages and documents, plus one free telephone legal consultation as an introduction to the legal team. The consultation is followed up with written case notes describing the advice and next steps. The ease of access, fixed fees and focus on customer service are impressive deviations from most sophisticated legal services.

What really catches my attention, however, is Riverview Law’s affiliation with BigLaw. DLA Piper, a global megafirm with 4200 lawyers around the world (including about 30 offices in the U.S.), owns a 21% interest in Riverview. Riverview also established an alliance with DMH Stallard, a 100-lawyer commercial law firm based in England. Riverview even opened a small New York office to offer fixed-fee advice on U.K. law to U.S. clients.

The Inevitable Invasion

As BigLaw starts losing global business to innovative, highly qualified law firms overseas, the dam will break. They’ll need large capital expenditures to revamp and revitalize their delivery capabilities to become more competitive. Partners will be tempted by opportunities to cash out their equity in IPOs. Some firms will start lobbying for legislative changes that give them the ability to garner non-lawyer equity investment, too. The British (and Australian) invasion of disruptive legal innovation will be complete.

And, at that point, Costco really will be able to offer legal services in its retail stores.