Co-op gives law firms 632 reasons to be cheerful – enjoy it while it lasts…
“This morning’s announcement by the Co-op bank that it has withdrawn from a deal to buy 632 Verde branches from Lloyds Banking Group will have many effects – not just on both organisations – but on the UK legal market as a whole.
“The purchase would have immediately given Co-operative Legal Services (CLS) a high street presence and the ability to attract clients that would ordinarily deal with a traditional high street law firm. The Co-op brand enjoys high levels of trust with the public, and many medium-sized legal practices consider CLS as their major competitive threat in the next 5-10 years. The Co-op’s financial capability would have given CLS the resources to break in to the legal services sector and achieve significant market penetration whilst cross selling to other areas in the Co-op group.
“Today’s announcement puts the threat to traditional legal practices into abeyance, but it has not gone away. Given the wider pressures facing the sector, such as the outcome-focused regulation and well-capitalised market entrants attacking firms’ core client base, law firms will appreciate a degree of respite. However, this is temporary and regardless of what the Co-op decides to do in the longer term, the sector can expect a tough time from competitors skilled in using sophisticated retail practices to win public trust whilst generating substantial profits.”
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Tags: Business, Business Information Portal, Business News, CLS, Co-operative Legal Services, Entrepreneur, Government, Lloyds Banking Group, Menzies LLP, partner and head of professional services at Menzies LLP, Peter Noyce, The BIP, West Midlands