Alternative Business Structures ("ABS"), a new form of commercial entity, became available on 6 October 2011, in a move intended to improve and diversify the provision of legal services in the UK.
ABS’s are a new business structure which can allow organisations, which are not established law firms, to provide legal services. An ABS is permitted to receive external investment, which allows the newly-converted law firms the opportunity to harness greater
capital and investment.
It is anticipated that there will be two different forms of ABS: multi-disciplinary practices which offer a wide range of services including legal services; or strict legal-services practices with non-lawyer managers and/or non-lawyer ownership.
The Council for Licensed Conveyancers became the first regulator with the authority to license ABS’s. On the day of its inception, the first ABS to be officially licensed was Premier Property Lawyers, a Leicester-based conveyancing firm. The Solicitors Regulation
Authority is expected to be able to licence ABS’s by early 2012.
The new format offers an array of options open to private investors and commercial enterprises, and opens up new prospects for investment in the UK legal services market. A recent development has seen Oxfordshire law firm Everyman Legal announce its plans to
apply to become an ABS and commence trading on the stock market.
The Republic of Ireland looks set to pass similar legislation under the guise of the Legal Services Regulation Bill 2011, which will permit the creation of multi-disciplinary practices.
With these developments, it is vital to understand the nature of ABS’s and their roles and responsibilities towards their dealings with clients. Prior to entering into business with a prospective ABS, it is imperative that you understand with whom you are dealing
and what their duties to your business are.
Similarly, should your business be interested in obtaining a licence to practice as an ABS, you should seek legal advice as to how your business will be affected and what procedures you will need to comply with.
To discuss how we can provide further advice in connection with these issues, please contact Stephen Foster, Partner and Head of our Corporate and Commercial team, by email to email@example.com or alternatively you can call
Stephen on 0161 833 9211.
or any of its partners or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of the contents of this article.