Alternative business structures

New competition since the introduction of alternative business structures, along with client demands is changing the face of the legal market, research has suggested, with the number of ABSs now topping 1,000. It also showed that 44% of law firms are now incorporated companies, while the number of traditional partnerships shrinking to only 17%.

The plan by Carillion Advice Services to become an alternative business structure looks to be at an end after the business was bought by magic circle firm Clifford Chance. We also report on two private equity backed ABSs that have used their financial muscle to expand, and a private client firm that has decided to enter regulation with the CLC.

An alternative business structure launched at the end of last year to invest in profitable “local hero” law firms, has already taken over one practice this year and is on the verge of taking a share in another. London-based Echelon Law offers back-office support and has a particular focus on firms of one to three partners.

The ownership structure of law firms is “completely irrelevant” when assessing risk, a director of the Solicitors Regulation Authority said yesterday. Crispin Passmore also reaffirmed the regulator’s determination to change the approach to the minimum cover limit for professional indemnity insurance.

An alternative business structure set up by ex-government IT specialists has launched an online service that hopes to harness technology to simplify the conveyancing process. The co-founders of Juno Property Lawyers have worked on some of the highest-profile government IT projects and hired two senior solicitors.

A multi-disciplinary alternative business structure is looking to build on its unique combination of licensed conveyancers and chartered accountants. Known as Optimum Professional Services, it is hoping to expand into commercial property work and possibly other areas of law.

Gordon Dadds Group has made its first law firm acquisition since listing on AIM last summer, buying a specialist technology and corporate practice for up to £3.4m. In other ABS news, Co-operative Legal Services has launched an online platform for uncontested divorces with solicitor support, while a will-writing ABS has gone into liquidation.

The Ministry of Justice has said it was “business as usual” on the housing and debt legal aid phone lines operated by Carillion Advice Services yesterday, following the collapse of the parent company. However, a law firm that markets a partnership with the paralegal business declined to talk about the implications.

Solicitors setting up an alternative business structure this month in Marlborough, Wiltshire, have chosen to be regulated by the Bar Standards Board. It is understood to be the first time a BSB-regulated ABS has been created without barrister involvement.

Deloitte is to become the final member of the Big Four accountancy firms to set up an alternative business structure (ABS), it announced today. It has previously said it would not go down this road due to the number of legal clients it has, but a spokeswoman explained that this position had been kept constantly under review.

Alternative business structure LegalZoom Legal Services is being sued in the United States as part of a claim that its American parent company is engaged in the unauthorised practice of law, Legal Futures can reveal. California-based LegalForce claims LegalZoom is using ownership of the ABS as a way to offer legal advice in the US.

The UK has its first law firm owned by a hedge fund after Slater & Gordon’s UK operation completed its separation from the Australian parent. The newly independent business has appointed a chief executive in the shape of the former vice-chairman of an American technology company.

A boutique London sports and entertainment law practice has converted to an alternative business structure just three months after launching itself, with the aim of being “nimble” in future. It counts the likes of Usain Bolt, Anthony Joshua and Chris Froome among its clients.

Premier League footballers including former Manchester United and England striker Andrew Cole are set to be among high-profile sporting clients of a law firm that has taken investment from a sports and media group after becoming an alternative business structure.

National law firm Simpson Millar is set to make at least 20% of its workforce redundant as part of a restructuring that follows its listed parent company going into administration earlier this year. The firm said the changes were designed “to put in place a sustainable cost base following substantial under-investment under the ownership of Fairpoint Group PLC”.