The chief executive of the Law Society predicted a challenging future for high street law firms at a conference on the future of legal services hosted in Birmingham.

Des Hudson said changes resulting from the Legal Services Act, including the introduction of Alternative Business Structures (dubbed “Tesco Law”), could drive smaller practices out of business.

He said: “I am convinced that England and Wales will see institutional entry into the market from bodies like the Co-operative or claims farmers.

“A further likely consequence is the consolidation of practices into larger and better resourced units, and the exit from the market of some firms.

“As institutional operators and larger practices move onto their patch, some traditional high street firms will struggle to compete unless they adapt.”

Mr Hudson shared a platform with other big hitters from the legal world, including the chairmen of the Legal Services Board and the Solicitors Regulation Authority, David Edmonds and Charles Plant, and Professor Stephen Mayson, professor of strategy and director of the Legal Services Institute at the College of Law, at Birmingham Law Society’s The Future of Legal Services conference.

Professor Mayson, a national commentator on the legal industry, told more than 120 delegates attending the event, ranging from sole practitioners to national heavyweight practices, barristers sets and in-house counsel, that the traditional partnership structure was “a broken business model”.

He predicted the rise of a new breed of law firm, with a corporate structure, staffed by fewer traditional lawyers and an emphasis on technology as a means to delivering services.

“Around 85 per cent of law firms have five partners or fewer. I am afraid that the combined forces of the recession, increasing regulation, competition from ABSs and lack of access to investment capital will mean that these numbers will severely shrink. The law firm of the future will take a very different shape,” he said.

Andrew Lancaster, president of Birmingham Law Society, said the conference was designed to help the organisation’s members prepare for the unprecedented changes facing the profession.

He said: “All our speakers agreed that whilst there will be massive change in our profession, there are opportunities for those prepared to seize them.

“There is a market for solicitors’ services, as there has been for centuries, and those who adapt to the changing environment and the changing needs of their clients, will remain competitive. I am particularly encouraged by the Law Society’s efforts to reinforce the solicitor “brand” through a marketing campaign and a proposed kitemark for accredited firms.

“As an organisation we were delighted to provide a lead through this event, to help inform and prepare our members for the changes facing our profession.

“The event demonstrates our pulling power as a regional legal community and our ambitions to remain the top legal centre outside London. The announcement that the SRA is to bring 600 jobs to the city, made at the conference, further cements this.”

Others speakers at the day-long event included Karin Woodley of the Legal Services Consumer Panel, Guy Barnett, of Birmingham firm Blakemores, Chris Owen, of St Philips Chambers, Neil Kinsella, of Russell Jones & Walker and 4Legal Solutions. and Darren Riley, refrom Lloyds TSB Commercial. The event was chaired by BBC Radio 4’s Law in Action anchorman, Joshua Rozenberg.