Private investor backs two solicitors’ ABS start-up
SRA: solicitor complains of tortuous application process
Two Manchester solicitors have set up an alternative business structure (ABS) with the backing of a private investor to provide commercial services on fixed fees and retainers.
Meanwhile, other ABSs approved by the Solicitors Regulation Authority (SRA) include Talbots Law, which trades as QualitySolicitors Talbots – one of only a handful of QS firms to become ABSs so far – and midlands law firm Wright Hassall.
The SRA has now issued 108 ABS licences. The Council for Licensed Conveyancers has issued a further 22.
Emma O’Leary and Tahira Patala left jobs at the business support company Employment Law Advisory Services (ELAS) to form Essential Solicitors, which will formally open its doors later this week. The pair applied for an ABS licence because they had the backing of a private investor.
Ms O’Leary told Legal Futures that the new firm expected to do “a little bit of employment work but mainly debt recovery and commercial work”. She said that she and Ms Patala had “both been qualified for a few years now and wanted to set up on our own – and we saw a gap in the market”.
That gap was to offer fixed fees as they had previously at ELAS, which provides a range of business support services, including employment law advice, HR, payroll and training. “We just felt that legal services could benefit from that kind of business model. I think it’s just a fresher approach really.”
She continued: “I think a lot of businesses in particular – although we will obviously work for any member of the public too – want the transparency of fixed fees, and sometimes to work on a retainer basis where they have someone to talk to, daily or weekly, on commercial and corporate matters or debt recovery issues without having the fusty old approach of a law firm and escalating legal charges.
“We thought fixed fees and transparency would be the way forward and be more attractive.”
QualitySolicitors Talbots is the latest of a growing number of QS-branded firms to apply for ABS licences, including midlands firm QS Parkinson Wright and north-west firm QS Stephensons – the first member firm to convert.
QS Talbots’ senior partner, Martyn Morgan, told Legal Futures the firm had applied because “we have two non-qualified partners previously approved by [the] SRA in our LLP but also wanted to convert to limited company status for a variety of reasons”.
These include that being incorporated “enables us to become more tax efficient, to develop a more corporate structure for our business and to be more flexible in seeking acquisitions and mergers and external investment”.
The 14-partner, five-office firm has “no immediate plans” to look for outside investment, said Mr Morgan, adding: “But now we have the structure to seek that, as and when needed.”
He described the ABS application process as “tortuous, particularly as we are an existing law firm and all relevant information was readily to hand. It was far too long-winded and delayed our tax planning”.
Warwickshire-based 35-partner Wright Hassall, aims to be a top 100 law firm within the next five years, and has appointed its former managing partner, consultant Peter Beddoes, as the head of legal practice.
Business development manager Vikki Whittemore said becoming an ABS supported the firm’s “growth ambitions” and “gives us flexibility in our structure, enables us to better advise clients and to succeed in growing the practice”. The firm is not seeking external investment at this stage, she added.
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