Urbis Think Tank
Could Australian banks and supermarkets offer legal services?
A landmark change to the UK Legal Services Act will see banks and supermarkets selling legal services in England and Wales. While this idea has not been put on the table in Australia, could it happen?
Like the UK, Australia has a highly developed and mature legal services market. According to IBISWorld, the Australian legal services market is worth $23.1bn, with firms making a huge $7bn profit. And 13% of the revenue is shared by only six law firms. There are more takeovers and mergers on the cards, so this concentration is only likely to grow. With such an unusual concentration in the market (no firm has more than 1% market share in the US), perhaps there is a role for more robust competition from major corporates. 
It has been an 8 year gestastion period for the “Tesco law” since the first regulatory review of legal services was announced in the UK in 2003. Tesco has operated a bank and insurance for many years, and sees legal services as a natural extension. Others have also begun offering online legal documents. So, if we were to see any changes in Australia, it would obviously take a similarly long period, but could easily start through the sale of legal documents in the same way.
According to the Guardian, one of the reasons for the change – to allow ownership of law firms by non lawyers – is to promote more competition and innovation in the ‘gentlemanly’ legal market. Surely, with Australia’s sagging productivity as reported today by the ABS, any way to improve a sector as large, and conservative as law would be worth looking at.
Would Australian retailers shake of the legal market? I’d argue for the affirmative.