Mid-sized City firms likely to be main target of external investors, LSB to predict

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By Legal Futures

22 February 2011


City: likely to feel the impact of external investment

The Legal Services Board (LSB) believes that medium-sized City law firms are likely to be the primary targets for external investors, Legal Futures can reveal.

It is one of the predictions in a draft impact assessment of alternative business structures (ABSs) that is still being worked on at the LSB.

The ABS implementation group – made up of the LSB, Ministry of Justice and approved regulators – heard in December that among the key points in the draft assessment are:

  • ABSs will have differential impacts on small firms. “However, a ‘big bang’ impact is unlikely and many new opportunities will open up to innovative small firms”;
  • ABSs will “intensify already extant trends of commoditisation in the legal services sector”; and
  • Medium-sized City firms (“not quite top tier”) are likely to be the primary recipients of external private capital and benefit from external equity and access to different management structures, etc.

The impact assessment is based on three scenarios for ABS uptake and uses both quantification and qualification in identifying possible future impacts. Given difficulties in understanding the full impacts of ABSs, it outlines possible impacts, depending on the level of initial uptake.

Much of the data collected so far has come from the Solicitors Regulation Authority and Council for Licensed Conveyancers.

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One Response to “Mid-sized City firms likely to be main target of external investors, LSB to predict”

  1. Are the LSB predictions right about the type of firms external investors will be interested in? There are many difficulties with investing in the mid-sized City firms, just below the top tier. Not least the partnership structure and barriers to growth. The process-driven “commodity” type firms provide a much more attractive proposition, as they are scalable, and can better take advantage of smart-systems with investment in outsourcing and IT.

  2. Ben Holmes on March 16th, 2011 at 9:33 am

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