ABS – a tonic or a tyrant?

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22 June 2012

Posted by Richard Hinton, business development director at Legal Futures Associate SearchFlow

The alternative business structure (ABS) landscape is finally stirring into life with a rash of eye-catching and some downright left-field players emerging into the light.

Some are well predicted, with the Co-operative Group making the boldest play and seeking mass distribution through major customer centres around the country and up to 3,000 new staff. Others, like Eddie Stobart, underline how fluid the picture could be. With the announcement of a new direct-to-barrister service, the premise suggests a fascinating development – you may as well go direct to a barrister as it may get to that point anyway. Time will tell whether the consumer makes a natural brand leap from logistics to law – but it goes to show you never can tell.

Many touted the major database owners – such as Saga, AA, the supermarkets or Virgin – to have shown their hand by now. Buying a house or sorting a divorce is trickier than buying bread or insurance and there is the question of brand reputation at risk here. Who would want to play with a previously loyal customer’s emotions if you just pass them to the competition after a bad experience that got you a limited return anyway?

This could be the saving grace for the smal-to-mid-size law firm that wake up to the opportunities. There are ever multiplying marketing consortia or lead generation engines out there that will help you connect to the market. These are useful, but it’s no substitute for doing what many of the proposed structures are doing anyway – a soundly developed strategic marketing plan, built on robust commercial partnerships.

Law firms can do this already and ABS may just be the shot in the arm that galvanises many into action. Independent financial advisers, accountants, independent estate agents and management consultants are all strong partners in waiting if firms loosen their historic business development practices. They may not need to form an ABS; it may just mean more cohesive networks and intelligence sharing.

ABS may prove challenging for some firms in terms of retaining talent in the face of stiff competition which is evolving and innovating. This fluidity may shake off inertia and that could be a good thing. But what will the consumer make of it? Will they trust Richard Branson or someone they’ve never met in a call centre 200 miles away to look after them or do they want to see and feel the legal experience on their doorstep?

by the Legal Services Consumer Panel suggests that consumers are starting to shop around more – but it’s just 22%, lower than in many other sectors. Will this accelerate under ABS? Will new digital channels make life easier for consumer law or is it all too much, too fast? Are there stronger demographic pressures at play – do older people still prefer tradition rather than technology?

New models will test these theories. New entrants with strong leverage will test whether lifestyle brands win over legal brands in the end. It’s still early days for ABS and early successes will be highly dependent on the professional standards of the firms entering the arena. Regulation within the legal profession is already multi-layered and being constantly refined. Service and redress for the consumer will ultimately determine which flavour wins the day.


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