The Ministry of Justice has revealed in a new report that as many as one in ten legal advice agencies will likely close this year.
The report by Ipsos Mori, based on telephone interviews with 718 agencies, found that more than half of the respondents questioned (54 per cent), were struggling with the cuts in legal aid introduced by Legal Aid, Sentencing and Punishment of Offenders (LASPO) in April 2013 and that many had made major changes to their organisation.
Researchers said organisations that currently or previously held a legal aid contract, which tended to be the larger and longer established agencies, were more likely to agree that they needed to adapt.
A significant minority of the not-for-profit groups that responded (8 per cent) had introduced fee-charging for some of their services, while a similar-sized group had reduced the geographical area they served.
Looking to the future, 42 per cent said they were likely to increase the number of services and 15 per cent said they would expand into new areas of law.
However, 23 per cent said they were likely to reduce opening hours and 13 per cent said they would most likely merge with another organisation, while ten per cent said they were likely to close altogether.
The report uncovered a high level of uncertainty, with 39 per cent of agencies saying at the start of this year that they were uncertain of their funding for legal advice during the financial year 2015/16.
The changes to funding for legal advice firms seem to be driving some organisations into other areas of law. However the closure of some legal advice providers means that some areas may see a decline in the availability of low cost legal assistance.
Either way these trends in the legal advice market could have an effect on some law firms and their particular areas of work. If you are concerned that the change to legal advice agencies could affect your, please speak to our expert team at Moore Thompson today.