A new alternative business structure is to ensure staff are “personally invested” in the firm by offering them different kinds of shares.
Bree Taylor, director of Alius Law, said she also wanted to give her partner-level lawyers more control over their earnings by improving transparency, partly through the new share arrangements.
Ms Taylor founded Alius Law, which specialises in complex and high-value business disputes along with contentious aviation, in January 2021 and last month it was licensed as an ABS.
A former partner at Fladgate and Memery Crystal, she explained: “The lockdowns gave me an opportunity to think about how my practice was going. The ability not to be in the office gave me the opportunity to think what I was getting out of the office.”
She said that, like many people “who generate business”, she came to the conclusion that, both from a financial and happiness point of view, she was “better off doing it myself”.
She said that Alius Law was a limited company based in central London, with herself as sole director and owner.
She works with two solicitors qualified in England and Wales, a lawyer qualified in New York, an employed barrister and two consultant barristers, and is “in discussions” with other lawyers about joining the firm.
The website of Alius Law states that “our alternative business model means that every one of us is personally invested in the success of our business”.
Ms Taylor said becoming an ABS gave the firm more flexibility in how it operated, including the ability to issue different classes of share to different individuals in the firm, whether they were senior or junior, qualified here or in foreign jurisdictions, lawyers or non-lawyers.
She aims to move the current, contractually based, staff shareholdings across to the new regime by the end of this year, making it more akin to the burgeoning fee-share model.
The new kinds of shares could be used to provide “much greater transparency” in the way lawyers were paid in terms of profits, so that, unlike in traditional partnerships, it was not left to be decided by committee at the end of the year.
Instead of “most of the money going into a general pot and vanishing”, as it would in a traditional firm, lawyers at Alius Law would keep most of what they earned, after paying for their overheads in terms of technology, insurance and premises.
“You keep the money you earn subject to what you pay us, rather than we keep the money subject to what we pay you.”
Ms Taylor described sharing profits as “the most difficult area” for law firms to get right, with the risk of resentment from partners who feel they are “carrying others”.
Her goal would be for partner-level lawyers to “run their own profit and loss like a business unit within the firm”, contributing to a pooled fund for expenses.
She added that ABS status also opened up the possibility of Alius Law being acquired, either partly or entirely, by an outside owner.
Ms Taylor said the firm’s specialism in aviation law made it an “attractive target” for acquisition, both by large law firms and other professional services firms.
She had received a number of approaches, but “nothing had tempted us so far”, and the issue was “not currently under discussion”.