And HR teams are likely to benefit the most.
The Legal Services Act 2007 is slowly but surely changing the legal landscape.
The Act was brought in to liberalise the legal market through a series of measures, including the creation of Alternative Business Structures (ABS) in 2011, which have allowed non-solicitors to own and invest in law firms and offer regulated legal services, for the first time ever.
Designed to encourage more flexibility, competition and innovation in the legal sector, the effect of the act is already driving prices down and forcing law firms to become more customer-centric. This, of course, is good news for HR departments, who are often subject to exorbitant fees when seeking specialist employment law advice.
The ABS model means that, once granted a licence, businesses such as supermarkets, banks and insurers can offer legal services. Now, we are not suggesting serious HR departments will seek specialist employment law advice from Aldi (actually why not? 25 years ago I remember a colleague in Marketing saying consumers would never bank at Sainsbury’s!) – but HR already does seek operational advice from some non-regulated consultancies, which could apply, if they wish, to set up an ABS.
Most won’t want the ‘hassle’ or wish to change their business processes and model to accommodate such a move…but the option is there.
Previously, HR departments really only had three choices when seeking employment law advice – in-house legal counsel (if you are lucky enough to have one), employment lawyers within a traditional law firm (who are often extremely costly) or non-legally regulated compliance/HR consultancies who provide employment advisory services, often via a ‘helpline’ business model.
With the new legislation, HR professionals have more choice in terms of who to turn to for legally regulated, cost-effective and tailored employment law advice. The end of the monopoly on providing legal services hands the power back to the customer, so you can consider a wider range of options and find the best service for your needs.
Having the ability to shop around for your employment legal services can lead to significant cost savings, as firms compete for your business in a fast-changing market.
The legal industry has traditionally been wedded to the high hourly rate model, which has proved challenging and prohibitive for many HR departments.
Instead of being charged by the hour, alternative business models also allow different ways of pricing, such as fixed cost or subscription pricing.
These can be far more cost-effective for HR departments seeking legal advice and can help maintain greater control over HR budgets without fear of escalating legal costs (you never know when an issue can arise, so budget planning for ER support is something of a lottery in reality).
With increased competition in the market, traditional law firms have to improve their levels of customer service if they are to gain a commercial advantage and attract new customers.
The creation of ABSs is forcing law firms to review their own business models; focus on new skills to become more transparent, communicate more effectively with their customers and ensure they are satisfied.
This means that HR departments can now demand a more customer-centric approach by their legal service provider and enjoy a more accessible service that meets their needs (and not the other way around…).
The ABS model enables businesses to bring together a broad range of specialist expertise under one roof, including practising employment law solicitors and HR advisors, to offer direct access to regulated, expert legal support whenever you need it, as well as integrating online HR resources and tools into an overall tailored service programme, without the hefty price tag and with a greater focus on customer service.
This means far more convenience for the HR department, as an integrated specialist advisory and online support service, combined into one overall service programme, can mean significant savings of both time and money.
When you think of the English legal system, the term ‘modernisation’ doesn’t exactly spring to mind.
One of the main reasons for the Act, and the introduction of the ABS model, was to promote greater innovation in the sector, with increased competition forcing firms to diversify their offering by developing new ideas, improving existing services or embracing new technologies.
Many legal services can now be purchased online, with customers able to access legal advice via Skype, for example, or download legal document precedents. All this makes it much easier for HR to access the right solutions for their business at the right time.
If you are considering a change to your existing legal partnership, you’ll be surprised at how many more options are now available to you outside the traditional law firm.
In the market for more cost-effective, customer-focused specialist employment law advice? Now might be the time to see if you can take advantage of the opportunity the Legal Services Act presents to the HR profession and explore the alternatives.
It’s our mission to advise and develop the employment law capability of HR professionals wherever we can, helping HR teams make a real commercial difference to their organisations. That way, you spend less time solving operational issues and more time actioning projects that drive far-reaching change in your company.
Call 0333 006 2929 or email firstname.lastname@example.org today to discover exactly how we can help you.