Alternative business structures

Alternative business structures and external capital will intensify competition but do nothing to stimulate demand in the conveyancing market, a leading Law Society representative has said. Meanwhile, lenders have warned that they expect CQS to be more stringent.

A Court of Appeal judge has issued a warning over the risk of external investment in law firms leading to “small, imperceptible steps” that could put business interests ahead of professional ethics.

A conveyancing business set up by a technology specialist has become the latest alternative business structure. Peter Ambrose, the owner of The Partnership, based in Guildford, Surrey, described its licence as an “endorsement”.

Two south-east conveyancing businesses owned by estate agents have become the newest alternative business structure (ABS), meaning that more than 50 licences have now been issued by the two ABS regulators.

Joint ventures between solicitors and insurance companies as alternative business structures which enables insurers to take in income what they would have received in referral fees will not be caught by the upcoming ban, the Solicitors Regulation Authority confirmed last week.

The Solicitors Regulation Authority is under pressure to extend its April 2013 deadline for legal disciplinary partnerships with non-lawyer partners to become alternative business structures, after the Legal Services Board said it was “unlikely” to insist on it before 2014.

Inaccurate statistics published by the Solicitors Regulation Authority over the past six months have painted a worse picture of its handling of alternative business structure applications than the reality, it has emerged. However, there are still around 150 applications in the system.

Just three alternative business structure applicants made it through to the decision phase over the past six months, with 167 still going through the application process, new figures from the Solicitors Regulation Authority have shown.

More than half of conveyancing firms are open to becoming alternative business structures, even though few believe they will improve services for clients. They are also more worried about lenders’ panel selection decisions than new competition.

A north London law centre is on course to become the first owner of a not-for-profit alternative business structure, subject to receiving approval. The venture is an example of government-approved efforts by law centres to mitigate the effects of legal aid cuts.

A West Midlands corporate transactions law firm that has advised on deals worth more than £20bn has become an alternative business structure, as has a practice working within a leading Bristol property services group.

Leading defendant law firm Keoghs has secured “significant investment” from mid-market private equity investor LDC, which is part of Lloyds Banking Group. It is taking a 22.5% minority stake.

A business offering corporate and commercial legal services has entered into regulation by becoming the newest alternative business structure (ABS) licensed by the Solicitors Regulation Authority.

One of the country’s largest consumer law firms has become the latest alternative business structure (ABS) as it targets working with “well-known brands” to offer a range of legal services.

A litigation funder with £40m a year to invest is considering using alternative business structures to make funds available to law firms, according to its chief executive. They have to be prepared to work under damages-based agreements (contingency fees), however.