[1]Accountants: admire continuity for clients brought by ABS
A central London firm of accountants has set up an alternative business structure (ABS) as a means of keeping control of legal work that it previously referred to third party law firms.
Born Legal LLP, formed by accountants Born & Co, a father and son partnership, will employ a single in-house solicitor at its City of London premises.
Simon Born, an insolvency specialist who runs the firm with his father, Graham, and is the ABS’s head of finance and administration, predicted widespread take up of ABS among mid-sized and larger accountancy firms.
“I think they’ll all do it because you if you’ve got a decent sized firm you’ve got enough business to keep lawyers busy all the time…
“I think bigger firms of accountants will say ‘look, why are we flogging this stuff all over to [lawyers]; why not get a lawyer in to do all this repetitive stuff for all our clients?’”
He explained a key motivation for the application was to maintain quality control. “Obviously we do a lot with solicitors and we end up referring our clients to a third-party solicitor and then you sort of lose contact with what’s going on. [The ABS] was the way to bring it all in-house, in a structure that is acceptable to the regulators and the Revenue and everybody else
“Despite what everybody says, when you refer somebody to somebody else you can’t say ‘it’s nothing to do with me, I don’t know if they are any good but here you are’. Of course that’s not true, you are always responsible for the referral that you make, whether you are involved in that referral directly or not.
“With the ABS you’ve got more control, you can monitor it on behalf of your client and make sure that the work is being done when you said it was going to be, and the way you said it was going to be done.”
Mr Born said he would consider expanding the number of solicitors “if it works out well” and was open to the idea of involving further professions within the ABS. But in practice, he said: “I couldn’t really see with whom I’d want to get into bed.”
He said obtaining professional indemnity insurance had been a problem, because solicitors’ insurers “hate new businesses”, adding: “The information they required was almost Draconian.”
He also resented the way the Solicitors Regulation Authority’s (SRA) had demanded that he undergo credit and criminal record checks. “That part of the process I thought was unnecessary because it’s almost insulting to chartered accountants, when I pay my… dues to the Institute [of Chartered Accountants of England and Wales] who regulate all that stuff and have that information.”
Born Legal LLP was granted its ABS licence by the SRA at the end of last month, effective from 6 February. The head of legal practice is solicitor Sadhana Soni.
Born & Co offers a wide range of accountancy and auditing services, including insolvency, arbitration, and tax advice.