Venture Capital Fund in UK Targets Legal Services Industry

Posted on March 31, 2008 by Richard Granat

 

 

Lyceum Capital, a UK private equity firm, has announced a new $500 million Fund to target opportunities in the legal services industry made possible by reform of the UK's regulatory structure that governs the legal profession.   Richard Susskind  an independent adviser to law firms, in-house legal departments, and national governments has been appointed as a Special Advisor to the Fund.  Sussikind specializes in future trends in legal services and the impact of IT and is the author of the seminal book, The Future of Law: Facing the Challenges if Information Technology.

Described as the lawyers’ equivalent of the City’s Big Bang deregulation of 1986, the Legal Services Act will enable law firms to secure private or public investment and will permit non-lawyers to compete in the provision of legal services – together with or separately from legal professionals.  Research by Smith & Williamson published in November last year indicated that nearly a quarter of firms interviewed would be seeking external capital in the next five years, typically of up to £20 million each.  Most of those seeking capital were expected to be small to mid-sized firms and private equity was deemed a more popular source of finance than the public markets.  

Commenting on Lyceum’s expansion into the legal services sector, Managing Partner, Jeremy Hand, says: “The legal services market is large, fragmented and offers considerable potential for continued growth – all characteristics of the sectors in which Lyceum has been successful.  We anticipate consolidation of small and mid-sized legal services businesses and believe that, in spite of increased professionalisation of the legal industry in recent decades, many opportunities remain to improve service standards, efficiency and profitability.  Although the Act does not come into full force until 2011, now is the time to build the early businesses that will have first mover advantage when the Act’s changes come into effect in three years’ time.”

Professor Susskind says: "I believe that external investment in legal businesses will be vital in coming years, not least to support the development of modern systems and processes. I am very pleased to have this opportunity to advise on the most promising IT-related investment opportunities."

Tags:

Reform of the Legal Profession in Ireland

Posted on March 27, 2008 by Richard Granat
The Irish Competition Authority (the equivalent of our Federal Trade Commission) says the market for legal services is permeated with unnecessary and disproportionate restrictions on competition and is in need of substantial reform. In a report published this week, the Irish Competition Authority recommends  new comprehensive legislation to address the lack of competition in the legal services industry in Ireland. The legislation would establish an independent Legal Services Commission with responsibility for regulating the legal profession and the market for legal services.  This new Commission would be independent, transparent and accountable, involving a wider group of stake holders that the current model of self-regulation. The Competition Authority says that all who have studied the legal profession have reached a similar conclusion -- that the legal profession needs to move towards a modern, transparent and accountable system. 

Perhaps the American legal profession could learn something from this report. Very few state bar associations have adopted recommended reforms to make the legal profession more accountable to the consumer. The US legal profession still operates like a closed guild subordinating the interests of the consumer, over the interests of the profession. It's time for a change. For a summary of this report, click here.
Tags: , , ,