Understanding barriers to entry, exit and changes to the structure of regulated legal firms
The Regulatory Policy Institute was commissioned by the Legal Services Board (LSB), supported by the Law Society, to undertake a study of possible barriers to entry, exit, and changes in the business structures of regulated solicitors' firms/practices in England and Wales.
The research was stimulated by the recognition that entry, exit and firm restructuring can effect the capacity of suppliers of goods and services in any market to respond and adapt to changing circumstances.
The broad aim of the study was to explore the regulatory and other barriers in the legal market(s) to solicitor practices closing, merging or otherwise changing their legal structure and to consider ways in which regulators or others could support improved market flexibility. The study sought to:
- Identify barriers to market flexibility linked to entry, exit, merger or other changes in business structure (e.g. mergers between solicitor and conveyancer firm), ownership or finance;
- Identify the specified or implicit aims of barriers and their cost/benefits;
- Assess the extent to which the barriers protect consumers or meet other intended aims.
Focused on small solicitors' practices, the study gave particular attention to the consideration of barriers to change that might either be caused or exacerbated by current regulatory arrangements, or that might be amenable to reduction via modification of those arrangements.