One for all
The Legal Services Act 2007 enables practitioners, other than lawyers, to become authorised to provide reserved legal services. This means new multi-disciplinary business structures between accountants and lawyers can be set up to provide further services.
The first ABS licence was granted by the SRA in 2012 and so far over 200 have been approved. Many have been permitted to existing law firms that want to add a non-lawyer to their partnership, or to specialist firms.
Would your firm consider applying to become an ABS?
There are many large firms throughout the country who have applied to become an ABS. Irwin Mitchell being one of them has completely overhauled its management structure since it became an ABS in 2012, gaining separate licenses for the firm and the four businesses within its structure, which handle matters including debt collection and insurance claims.
Matthew Davies, a partner at high-street firm Wilson Solicitors, thinks that the traditional law firm model is financially safer and more secure: “The thing about solicitor-owned legal practices is that we simply cannot take the same risks as ABSs because it’s our finances that are on the line. We’re not limited companies, which makes us more likely to survive.”
The legal profession has often been criticised for being out of touch with the world of modern business. Traditional structures stereotypically see sequestered lawyers gain promotion thus becoming managing partners without ever having to develop real business acumen. The introduction of ABSs is a setback to this traditional system as it allows non-lawyers to invest and become partners in law firms. Neil Rose, Editor of Legal Futures said “For a good number, it is simply a case of need, they already have non-legal partners because of pre-ABS transitional provisions and under the rules they have to become ABS. This might not sound significant – and they are treated as the ‘boring’ ABS but actually I think it is significant. Ten years ago, the idea of a non-lawyer partner was unthinkable; now it is common and almost de rigeur. For other ABS, they simply couldn’t do what they want to do, such as accept external capital or become part of non-legal organisations, as ‘traditional’ law firms.” Do you agree with his comments?
The latest firm to jump on the ABS bandwagon is London based accountancy firm Kingston Smith. The firm has also appointed Andrew Bloom as a new partner and Head of Legal Services. Bloom commented, “Our ABS licence, granted by the Solicitors Regulation Authority, allows us to offer a wider range of legal services, thus providing a comprehensive, ‘one-stop shop’ service and greater efficiency for our clients.
“Going forward, our team of solicitors is able to advise across a wider range of probate, private client and wills matters, as well as commercial and corporate transactions including company formations, joint venture and shareholder agreements, due diligence, acquisitions and disposals, and leasing and commercial agreements, with a particular focus on assisting clients where this is ancillary to our accounting work.”
Kingston Smith already offers probate services through an ICAEW granted licence that it was granted in October 2014.
ICAEW became the approved regulator and licensing authority for the purposes of probate activities and ABSs in 2014.
What is your view on non-legal entities becoming ABSs therefore offering legal services to an already established business?
Do you think a ‘supermarket style’ business in terms of everything in the same place is the way forward?
Please let us know your view by leaving a comment below.