Finance

A pioneering alternative business structure (ABS) has become one of the first legal practices to introduce employee ownership, while also developing a new form of billing that will see it agree a profit margin with clients, Legal Futures can reveal.

Solicitors will be able to close down thousands of client accounts with residual balances of up to £500 and donate the money to charity under plans unveiled yesterday by the Solicitors Regulation Authority. The regulator is also planning to end the annual ‘keeping of the roll’ exercise.

The UK’s top law firms have become increasingly sceptical about listing on the stock market or taking on private equity investment, according to new research.

Irwin Mitchell has signalled its intention to grow “substantially” in the coming years after securing a £60m four-year finance package with three major UK banks. The deal also includes a £30m ‘accordion’ facility for further finance if required for a big transaction.

Profits were up last year and confidence is buoyant for the coming year among small and medium-sized law firms, according to a major benchmarking survey. Nine out of 10 firms surveyed thought profits would increase during 2014.

Manchester firm Linder Myers has avoided administration by completing a deal which will see the firm refinance its debts and appoint a chief executive to lead the practice.

The Chancellor George Osborne yesterday confirmed that there would be no delay in introducing the changes to the way LLPs are taxed, which has left many firms seeking funding for capital contributions.

The Treasury has said last week’s House of Lords committee report calling for partnership tax changes to be delayed was already out-of-date, and confirmed they would come into force next month as planned.

An influential House of Lords committee has added its voice to calls for the government to delay its partnership tax reforms until 2015, so as to allow LLPs time to adjust to the changes.

The High Court last week rejected Barclays Bank’s application for summary judgment over the liability of a former partner of failed US firm Dewey & LeBoeuf for a capital loan made in his name.

A survey of top-100 law firm finance directors has shown the consequences of the recent economic downturn continue to dominate predictions for the future, with regulatory and compliance work forecast to grow fastest and public sector work set to contract the most.

Large law firms need to embrace new ways to measure firm and partner performance as traditional methods – such as profits per equity partner – “can be irrelevant, encourage inappropriate behaviours, discourage innovation and tend to be short term in focus”, a leading law firm consultant has advised.

Controversial changes to the taxation of LLPs will go ahead on 6 April, HM Revenue & Customs announced late last week, but has made some small concessions in response to the concerns of lawyers and others – including giving more time to contribute capital.

The High Court has had to unpick the fall-out of the sale of a law firm, with the seller claiming unpaid purchase money and the buyer arguing that the failure to disclose potential legal action against the firm led to sharp increases in the cost of its indemnity insurance.

A London media law firm has become what is believed to be the UK’s first legal practice to accept the virtual currency bitcoin in payment for its services.