High net worth consumers most likely to use ‘alternative’ legal firms

High net worth customers are more likely to use ‘alternative’ providers of legal services than other income groups.

More than six in ten of those with an income of £60,000 a year – or more – say that they would use alternatives to traditional law firms after deregulation. This compares with an average score of nearly fifty per cent for the population as a whole and just one in three for people with an income under £10,000.

Speaking about the research Max Pell, head of Capita Legal Services said: “Our study found a direct correlation between increasing household income and willingness to use alternative providers for services like conveyancing, will-writing and family law.

“Nearly four in ten (38.9%) of people with an income of between £15,000 and £20,000 would use non traditional firms and this figure increases to 54.3 per cent for people with an income between £25,000 and £30,000, 60.3 per cent for people with an income between £40,000 and £50,000 and 63.1 per cent for those with an income between £60,000 and £80,000.

“These figures are particularly significant because use of legal services also tends to be higher among higher income groups. Just over half (51.6 per cent) of those with a household income of less than £10,000 reported using legal services over the last five years but this figures rises to 62.3 per cent for people with an income between £30,000 and £40,000 and 82.4 per cent for those with an income of more than £80,000.”

Among all groups the most popular type of service for alterative providers is property conveyancing, with 45.7 per cent of people saying that they would use a non legal firm to do this. More than a third (38.7 per cent) would use alternative providers to deal with will and inheritance tax issues, 29.3 per cent would use them to draw up a power of attorney and 25.5 per cent for a divorce or other family law matters.

Mr Pell continued: “The deregulation of the market for legal services presents a significant opportunity for alternative providers – if they can get it right. Residential property conveyancing alone was worth more than £2 billion in legal fees last year. Our research also suggested that just 40 per cent of people have made a will – and this is the second most popular choice of service for non traditional firms. And overall, the market is worth some £13 billion for consumers and £2-£3 billion among small firms.”