Alternative business structures

A Bath-based legal services business run by two former managing partners of large firms – Withy King and CMS Cameron McKenna – has obtained an alternative business structure licence to bring regulated legal work in-house. OmniaLegal describes itself as a “legal services co-operative with a difference”.

DAS Law – the alternative business structure set up by the eponymous legal expenses insurer – is launching a pioneering graduate academy for “lawyers of the future”, with the first six recruits starting next month. Staff numbers at the firm have doubled to around 220 since it was created in 2013.

Slater & Gordon saw its share price double yesterday after its banks gave the alternative business structure breathing space to turn the business around. The firm said it considered the lenders’ agreement to change the terms of its borrowing to be “a positive and clear endorsement of the company’s performance improvement program”.

A company that provides valuation, sales and other services to dentists has added legal advice to its offering with the launch of an alternative business structure. The aim is to make FTA Law “the largest provider of legal services” to the dental profession.

Alternative business structures (ABS) make up just 4% of all solicitors’ firms but contributed 11% of the profession’s turnover, research has revealed. The Law Society’s annual statistical report, found ABSs were spread broadly across the different turnover bands, with around 50 of them having income in excess of £10m.

The evidence to date has not backed up the critics of alternative business structures, the American Bar Association has said as it announced it is to revisit the merits of allowing them just three years after its last investigation kept the door firmly closed.

The Lifetime Group has become the latest financial services business to add legal advice to its offering by gaining an alternative business structure. Meanwhile, Metamorph Law – which last year announced plans to “acquire, transform and aggregate” high street law firms – has received its ABS licence.

Co-operative Legal Services returned to profit last year, although turnover continued to fall, its annual results have revealed. Though turnover – which reached a high of £33m in 2012 – was down a further 14% to £18m, CLS turned a £5m loss into a £700,000 profit.

Real benefits are emerging from alternative business structures and the US should be open-minded about adopting them, according to an academic study. It found that while ABSs did not amount to a transformation of the industry, their effects on the firms in England and Wales that adopted the business model were positive.

Essex Legal Services has become just the fourth local authority legal department to become an alternative business structure. The legal department of Essex County Council predicted that it could make an additional surplus of £1.8m by 2020 through a “growth strategy” with creation of the ABS as “one of the key enablers”.

Two new alternative business structures are set for approval next week, as the Leeds-based Progeny Group comes into life. The group will combine a commercial law and private client ABS with a separate, FCA-regulated wealth management business.

West Midlands firm Talbots – a stalwart of the QualitySolicitors network – has announced that it is leaving the group in May. Chief executive Mary Mocklow said Talbots would compete better as an independent law firm.

Slater & Gordon failed to carry out good enough due diligence checks before buying Quindell’s professional services division this time last year, a partner at the UK’s first listed law firm has suggested. Andrew Evans, partner at Gateley, said S&G paid “far too much”.

Fairpoint Group plc – the one-time debt management operation that has transformed into a mainly legal services operation – has reported a “strong financial performance” for 2015 and plans to keep growing in 2016. Meanwhile, turnover at Minster Law, which is owned by BGL Group, more than halved.

A property management firm specialising in residential blocks of flats has turned itself into an alternative business structure, in what is understood to be first move of its kind. “At the moment we’re a property management company with a legal capacity. In 10 years’ time, it is likely to be the other way round,” said director Matthew Young.