Legal Services Act

There is strong interest among the UK’s largest law firms in joining forces with a non-legal practice in the next two years, while several are also looking at external capital, according to new research.

Quindell Portfolio, the alternative business structure that has acquired three law firms in the past 12 months, will have “15% of the UK market for personal injury claims” this year, it has claimed. Meanwhile, another major ABS – Countrywide Conveyancing Services – has reported profits of £8m for last year, up 4% on 2011.

The president of the Supreme Court has urged the legal profession not to lose sight of its fundamental principles in the rush for modernisation, warning about the risks of pressure from “hard-nosed businessmen” who may invest in law firms.

An alternative business structure licence has opened the door to a global consultancy that project manages aspects of some of the world’s largest infrastructure and energy projects buying a specialist construction law practice.

A specialist motorbike and moped accident management company has successfully applied for an alternative business structure licence in order to take in-house personal injury work that is currently outsourced.

The Solicitors Regulation Authority has rejected a demand by the Legal Services Board that it start a review of the separate business rule, saying it can see “very little public interest justification” for doing so.

A barristers’ chambers that forms part of a law firm group is amongst the latest crop of new alternative business structures approved by the Solicitors Regulation Authority. The SRA has now issued 90 licences, including multiples for firms with different entities.

Insurance companies will buy law firms in response to the ban on referral fees, but this will not help to lower the industry’s claims bill, an analyst has predicted. An investor report on Admiral Group, produced by Investec, said the referral fee ban will cost the company £7 of income per vehicle.

The rule which prevents solicitors and alternative business structures from hiving off non-reserved legal work into unregulated businesses risks making legal services more expensive, distorting competition and preventing innovation, the Legal Services Board has warned.

The Solicitors Regulation Authority is reviewing its approach to licensing alternative business structures one year on from the start of the regime, with a much speedier process for low-risk entities one of the likely outcomes, Legal Futures can reveal. It has also reported increasing interest in multi-disciplinary practices.