The AA has confirmed that, following a strategic review, AA Law stopped taking on new clients in November last year and will soon shut up shop. AA Law was conceived in 2013 as a joint venture between the AA and law firm Lyons Davidson. An alternative business structure licensed by the Solicitors Regulation Authority, AA Law marked one of the biggest consumer brands ever to venture into the legal services market.
Stiff competition
AA Law's failure to take flight is somewhat surprising given the venture's early success. With only a handful of staff, company reports show that AA Law turned over nearly £2m during the 2014 financial year, and registered before-tax profits of £613,000. The venture was designed to reduce reliance on law firms by handling personal injury and other litigation relating to motor vehicle accidents for members and customers of the AA, with employment and contract services flagged as the next-step once AA Law had found its feet. Less than two years later, however, it appears that the AA has been forced to concede defeat in a liberalised legal services market where alternative legal models often fail to gain traction among established heavyweight firms. 'Following a strategic review the AA decided that the level of customers that [AA Law] was introducing did not justify the maintenance of a standalone business,' said a spokesperson for the company. Sources: Law Society Gazette; Post
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