Alternative business structures

Three in five consumers would consider buying legal services from a range of consumer brands, a major piece of market research from YouGov has revealed. The work also found low recognition of any current legal brands, while a third of consumers said they would be attracted by online legal services.

Alternative business structures (ABSs) “may not be as big a threat” to small firms as some fear, the Solicitors Regulation Authority (SRA) has suggested. A draft impact assessment also argued that ABSs could help equality and diversity in the legal profession by breaking the traditional partnership model that has held it back.

The Solicitors Regulation Authority will rebuff any efforts to restrict its ability to regulate alternative business structures (ABSs) that are 100% owned by non-lawyers, its chief executive has said. There are suggestions of a compromise on its ABS licensing application that would mean the SRA not regulating ABSs that are wholly externally owned, at least initially.

The maximum fine for misdemeanours by alternative business structures should be £250m, the Legal Services Board has decided, having considered the amounts of money made by some law firms out of miners’ compensation claims.

A car accident claims manager has revealed its intention to become an alternative business structure, Legal Futures can report. Hampshire-based Vamco, which specialises in repair management and credit hire, is planning to take over a branch office of Nesbit Law Group, which is currently located in the same building under the name Kingsley Law.

The Legal Services Board is pressing ahead with plans to make the new regulatory chamber of the First-tier Tribunal the sole venue for appeals against decisions made over ABSs, despite strong objections from solicitors. It is a move that could damage hopes that the Law Society council will next month approve the Solicitors Regulation Authority’s application to become an ABS licensing authority.

A director of the Office of Fair Trading is heading a new committee to oversee the Legal Services Board’s contingency planning to regulate alternative business structures directly, Legal Futures can reveal.

The Legal Services Board (LSB) believes that medium-sized City law firms are likely to be the primary targets for external investors, Legal Futures can reveal. It is one of the predictions in a draft impact assessment of alternative business structures that is still being worked on at the LSB.

Lord Falconer, who as Lord Chancellor steered the Legal Services Act through Parliament, last week warned about the challenges alternative business structures provide for “the preservation of legal ethics”.

QualitySolicitors chief executive Craig Holt explains why lawyers need their eyes testing if they underestimate the impact of the Legal Services Act, and how QS aims to build a 30-40% market share.

A bid to create the first solicitors franchise was launched this week. Face2Face Solicitors is initially aimed at small private client law firms and will provide franchisee solicitors with centralised back-office systems – including accounts, IT and regulatory compliance – and central marketing and business development, to enable them to focus on the legal work.

The Council for Licensed Conveyancers (CLC) is on course to become the first body licensed to regulate alternative business structures, after submitting its application to the Legal Services Board. The CLC, which oversees 10-15% of the conveyancing market, has also applied to extend the range of reserved activities it regulates from conveyancing and probate to awarding rights of audience and the right to conduct litigation.

The Legal Services Board is pushing ahead with preparations to regulate alternative business structures itself because of fears that the Law Society council will next month block the Solicitors Regulation Authority’s plan to become an ABS regulator, Legal Futures has learned.

The miners’ compensation scandal shows that a maximum fine of £150m for misconduct or non-compliance by alternative business structures is too low, the Solicitors Regulation Authority has warned. With new entrants set to enter the legal market after 6 October, it was “perhaps dangerous to rely too heavily upon turnover figures in the current market to assess appropriate fining powers”.

Partners in law firms that receive external investment after October will alienate younger colleagues if they appear to be stripping the firm of value for future generations, a report has warned.