Small firms should consider the benefits of alternative business structure (ABS) status as a way to handle succession planning, the senior partner of one of the latest licensees has said.
Richard Grunwell, one of two equity partners at Yorkshire-based Pinkney Grunwells, said the conversion process began in September last year to enable a new-look management structure in the future.
Hailing the “flexibility” of ABS, he predicted that many small firms will have to address the the succession issue or face “closing the doors” during the challenging times in the legal sector.
Mr Grunwell said: “This is about extending our own partnership to people who work here, with a view to succession planning. We are at a point where we’ve got quite a few women in the profession and not all of them want to be equity members of the firm.
“Therefore we’ve decided that as the equity partners get older, we didn’t want to find ourselves in the position of needing to find a successor in double quick time. So ABS means we can end our practising certificates and still own the firm.”
Mr Grunwell said the next generation of lawyers within the 50-employee firm could buy into the equity as normal if they preferred. But converting to an ABS meant he could “sit at home as a shareholder” while the firm is run without his direct involvement.
He added: “Around the country a lot of smaller firms in accountancy, law and other professions are finding themselves tied in without a buyer. It will be a matter of closing the doors or carrying on with no succession in place.
“We’ve taken the view that we needed to put succession in place and acted early to address it. It seems a logical move.”
The firm has 10 partners and four offices in Yorkshire, covering private client work, children, property, and civil litigation.
It boasts clients in the niche ‘potash’ mining sector and is currently acting for landowners interests in relation to plans to sink a mine between Whitby and Scarborough, having acted for mining companies in the past.
Mr Grunwell ruled out the possibility of external ownership or acquiring other businesses to add to the mining and agricultural capabilities.