What is it about legal work that is thought to be so attractive to Tesco, the AA and other large companies?
Tax vs Law
Surely more people need help with their tax each year than need any legal services? I’m sure that more people complete tax returns than need conveyancing services for example. OK, even more people need to prepare a will than complete a tax return, but what other legal services are so in demand that large retail operations would want to move into the legal marketplace?
There is no restriction on who can own an accountancy or tax practice. Indeed anyone can call themselves an accountant or a tax adviser - without the need for any professional qualifications. Even my own body, the ICAEW, long ago relaxed its rules to allow upto 25% of a Chartered Accountancy practice to be owned by non-Chartered Accountants.
The big question
So why have we not seen Tesco Tax (which is more alliteratively attractive than Tesco law anyway)? Why no offering of Barclays Bookkeepers? or AA Accountants?
It's obviously not that these big companies see the provision of legal services (and tax is arguably a legal service) as too far removed from their main customer service offerings? Tesco and others already offer various forms of insurance amongst other non-conventional service offerings under their own brand.
So why the focus on legal services? Is it because it's never been possible before? When the Legal Services Bill was introduced in the Queens Speech in 2006, the Times reported that the "Era of 'Tesco law' is upon us." The Legal Services Act 2007, is now in place although the clauses allowing Alternative Business Structures have yet to come into effect. These will enable big companies such as supermarkets and motoring organisations to own law firms and to employ lawyers and offer legal services directly to their customers.
Mass Tax Services
There is some degree of precedent as regards the lack of interest in branded tax shops in the UK.
When the self assessment tax system was first introduced here in 1996 there was talk of high street tax shops to help those who couldn't do it themselves. Amongst others, H&R Block dipped a toe in the water but the idea did not catch on. This is because there are some significant differences between taxpayer obligations in the UK from the USA where H&R Block is a household name with a taxshop on every street corner.
I've long been waiting for the large insurance companies to offer tax return and related tax services. Indeed this would arguably be easier to arrange than for accountants to provide financial services to clients.
However over the last ten years neither the banks nor the insurance companies have really entered the mass marketplace - so perhaps this is why there is no talk of Tesco Tax.
Transaction vs relationship
There is one key difference as between legal advice and tax return services. Legal work tends to be transaction based rather than relationship based. Could that be the key factor. To avoid the provision of services where an ongoing relationship arises. In this respect annual tax return, accounting and bookkeeping services are very different to legal services.
What do you think? Please add your comments to this posting below.