It has been 10 years since the Legal Services Act established Alternative Business Structures (ABSs), which provided the pathway for non-lawyers to hold management and ownership roles within UK law firms for the first time.
Since the Solicitor Regulation Authority began accepting licensing applications on 3 January 2012, over 500 ABSs have been registered.
The move to the ABS model has played a big role in changing the way some legal service providers operate, triggering the debate around the future of the traditional model and its sustainability.
Thomson Reuters Forum Magazine discussed this topic with four industry leaders during a panel session at the Entrepreneurial Law Firm Conference held in London earlier this year.
The speakers, whose law firms cover a broad spectrum of the legal industry, included Peter Bennett, Partnership Executive Officer for Bates Wells Braithwaite (BWB); Simon Goldhill, CEO of Metamorph Law; Michelle Peters, Principal at The Business Instructor Ltd; and Colum Smith, CEO of MW Solicitors.
The panel expressed a generally positive view of the ABS movement. BWB, a London-based firm, changed to an ABS three years ago primarily to allow the firm to ‘expand its offering to clients’ − a decision which was brought about by the firm’s desire to be more entrepreneurial.
“We are one of the few smaller firms competing against national and multinational law firms in this niche social finance space,” Bennett explained. “You have to ask, how do you get competitive advantage against larger players than yourself when currently the large firms will not follow the ABS one-stop-shop route?”
While Bennet believes that the ABS model could give firms a competitive edge, he also added that it will make waves elsewhere in the industry, including ‘making the technological changes happen in the marketplace even quicker.’
He added: “If you are interested in looking at more efficient ways of providing legal services, some of the technological solutions that are available will give those who adopt them early a very significant professional advantage.” Though, as Peters noted, sticking with the traditional model will increase pressure on fee earners. And traditional firms would also derive benefit from adopting efficient, technological solutions.
To read the full discussion on ABS models, you can access the full article here.
