Alternative business structures

Would-be alternative business structures unhappy with decisions taken by the Solicitors Regulation Authority will be able to appeal to the Solicitors Disciplinary Tribunal, it has been decided, in a significant step towards the introduction of ABSs.

The Solicitors Regulation Authority is unlikely to start licensing alternative business structures (ABSs) until 2012, it has confirmed. The news comes as the authority spelt out the detailed level of information about investors in prospective ABSs that it will expect to see.

A Yorkshire law firm is joining forces with the founder of Freeserve to launch the first of a planned national network of city centre law shops under the brand Legal365, we can reveal. They will form an ABS that could seek external investment.

Mid-tier City law firms may have the greatest incentive to go to the public markets to fund their merger and acquisition activities, the Legal Services Board has suggested. But there is a risk of an “investment bubble” where external investment in alternative business structures proves only temporary for short-term gain.

Nearly a third of the top 100 law firms are considering taking external capital, while a few see floating on a stock exchange as “likely”, new research has claimed. A survey of finance directors at the top 100 by Sweet & Maxwell found that “a significant number” of the firms are considering embracing alternative business structures “at an early stage”.

A leading City lawyer is targeting major Chinese and Indian law firms with a view to using alternative business structures to help them build global practices from the UK. Stephen Kines said ABSs will provide them with a flexible structure.

Legal Pioneers is a major new Legal Futures series profiling innovative legal services providers. In the first instalment, Neil Rose travels to Bromley in Kent to visit MTA Solicitors, which has three different legal practices, a shopping centre store, and nine (soon to be 10) other ancilliary businesses.

Outcomes-focused regulation will go ahead on 6 October even though it is unlikely that the Solicitors Regulation Authority will be able to start licensing alternative business structures “much before the end of the year”, chief executive Antony Townsend has confirmed.

Alternative business structures (ABSs) could be good news for women, black and minority ethnic, and disabled barristers, the Bar Standards Board has predicted, after approving rules that will allow barristers to become partners and owners of ABSs.

The Solicitors Regulation Authority will not be able to start regulating alternative business structures on 6 October, Legal Futures can reveal. Further, the question of whether prospective non-lawyer investors in ABSs will have to reveal all convictions, even if they are spent, remains unresolved and could stop the SRA licensing ABSs with external ownership.