In a video interview with David Morley, senior partner of Allen & Overy, Jeremy Hand (pictured), chairman of the British Private Equity & Venture Capital Association (BVCA) and managing director of Lyceum Capital, warns that investors and non-legal businesses are queuing up to take advantage of the Legal Services Act (LSA).
“The reality is that today there are literally hundreds of well-capitalised, well-run businesses that are looking at the legal services market and saying, ‘We’ll have some of that, thank you very much,’” he tells Morley in the interview, which appears on legalweek.com today (12 June).
“So whether people like it or not, the Legal Services Act is going to create significant external pressure. If you are not well-run, well capitalised and strategically well-positioned you may be a loser. And you probably will be a loser.”
In the interview, which was originally shown to delegates at the Legal Week Strategic Technology Forum in
Under the provisions of the act, lawyers will be able to enter into partnerships with non-lawyers and sell shares in their firms to outside investors.
Hand, who recently established a panel of senior advisers to explore investment opportunities in the legal services market, told Morley that law firms presented a “very exciting investment opportunity”.
He urged law firms to consider the potential for private equity to act as a catalyst for change at a time when the market was about to become far more competitive.
“Personally I’ve never given a guarantee to the bank over my house and I think it is an obligation that would cause me to behave in a highly-conservative manner – perhaps in a more conservative manner than is necessary in order to drive a firm effectively and efficiently,” he said.
He added that investors would not necessarily want to own majority shareholdings, but they would look to form business partnerships with law firms, helping them to invest in technology, incentivise staff and gain a deeper understanding of their markets.
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