According to a recent survey, almost a fifth of all law firms in northwest England are closing down*. What does this information indicate?
It shows a growing trend that personal injury work is under threat. For me this is a little bit of a concern, as personal injury, and in particular the no win no fee arena was one in which I was planning to practice in after my exams are completed.
Ten Thousand Jobs Potentially at Risk
Although for the most part this information has been brushed under the rug, the trend is not fading. In fact, it is estimated that 100,000 jobs or more are in jeopardy of being lost over the next year if things do not improve. What is the reason for this startling trend?
As the economy faced a tremendous downturn, the legal system was less likely to side with no win no fee solicitors then it was to file on the side of the perpetrator. Of course, individuals who became victims of medical negligence often found the court ruled in their favor.
For no win no fee lawyers, this became a serious economic issue. Although it can be assumed that many claimants are dishonest in their claims there are many individuals who have been a victim of crime and genuinely require assistance.
With new legislation taking effect at the beginning of the next month, personal injury lawyers will now be forced to market and advertise their services in different ways than they are used to. Instead of having the opportunity to purchase certain claims, solicitors will now have to dish out a portion of their income marketing services; income that they will not be getting back immediately.
In fact, the price of the services will likely be passed on to claimants therefore increasing the rate personal injury lawyers will charge.
How Some No Win No Fee Solicitors Are Doing It
So for example, a no win no fee solicitors firm might have to invest more in how their own websites perform in searches online, rather than relying on third party Internet marketing lead generators to develop leads for them.
A great example of how one company does this with this website that they developed purposefully to target clients in London looking for no win no fee solicitors in the city. Many are also turning to social media as we have discussed before on Twitwheel.
In addition to these changes, the government will also enact road traffic accidents portals for computer software wherein lawyers can send accident claims directly to defendants and their insurance companies for settlements.
The computer system will now cover nearly any personal injury claim between £1000 and £10,000. The new changes also come with reductions in lawyer’s fees, something that the personal injury market is not particularly excited about.
The Ministry of Justice has made tremendous changes to the personal injury legislation in the UK, which has contributed to the aforementioned closing businesses. Only time will tell how lawyers react to these new changes and how many businesses are able to continue offering their services under these new laws.
* Source: The Guardian Website 21st March 2013