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June 9, 2011 4:00 PM

U.K. Companies Prepare to Offer Legal Advice Ahead of LSA

Posted by Tom Huddleston Jr.

The Co-operative group, a U.K.-based consumer co-operative spanning myriad industries, is putting into motion a plan to offer legal services through its network of banks, according to Legal Week.

The group has arranged a collaboration between two of its subsidiaries--Co-operative Legal Services (CLS) and Co-operative Financial Services (CFS)--months before the implementation of the U.K.'s Legal Services Act (LSA) in October.

As we reported in September, the LSA--introduced in October 2007--will permit U.K. law firms to accept outside equity investment, while also opening the door for businesses owned by nonlawyers to provide legal services.

The Co-op's plan has kicked off with a two-week trial run, Legal Week says, in which the group will offer free legal advice only to its members in three Bristol-based branches of the bank Britannia. 

According to Legal Week, CFS managing director of retail Rod Bulmer said, "This pilot scheme will enable us to assess how legal services can be delivered [in conjunction with non-legal businesses]. If successful, there is clearly great potential to bring these services under one roof."

The Co-op confirms that it will be one of the first non-legal businesses to go up against straightforward law firms in the legal services market upon implementation of the LSA in October. For now, though, the group is only able to offer the services to its own members and not to the general public.

The group has been priming CLS--building up operations from a three person staff in 2006 to nearly 380 now--over the past five years specifically with a deregulatory act, like LSA, in mind. 

Legal Week adds that CLS currently offers legal advice on such matters as personal injury claims, will writing, estate administration, and employment law to its members via telephone. Moving those services to bank branches will offer a preview of how CLS might operate under LSA.

As we reported in September, law firms such as Irwin Mitchell and Mills & Reeve already have made the switch to Legal Disciplinary Partnerships (LDPs) under an early stage of the LSA. LDPs allow nonlawyers to hold equity in law firms, but investment by outside parties will not be legal until October.

Private equity firms like Lyceum, Lloyds Development Capital, and South African private bank Investec had already made it clear last fall that they will be among the financial institutions looking to invest in law firms once that time arrives.

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