Alternative Business Structures: Threat or Opportunity?

 In Practice Management

Disclaimer: LawSkills provides training for the legal industry and does not provide legal advice to members of the public. For help or guidance please seek the services of a qualified practitioner.


Alternative Business Structures (ABS) will be with us sooner than we imagine!

In just over 15 months, the landscape for legal services will enter its next wave of evolution. The legal profession’s approach to its business and how services are delivered has remained largely similar for many decades now, but ABS will bring a whole new regime.


The Ministry of Justice fact sheet states that the main benefits of ABS are:

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  • Relevant learning and development opportunities
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  • ABS will increase access to finance: at present, providers can face constraints on the amount of equity, mainly debt equity, they can raise
  • ABS will also allow for increased flexibility: non-legal firms such as insurance companies, banks and estate agents will have the freedom to realise synergies with legal firms by forming ABS firms and offering integrated legal and other professional services
  • It will be easier to hire and retain high-quality, non-legal staff: ABS firms will be able to reward non-legal staff in the same way as they reward lawyers
  • Allowing new providers into the marketplace should lead to innovation and price reductions. This should result in more people being able to access legal services
  • The ABS regime is facilitative. There is no obligation for a firm to become an ABS although there may be some pressure from competitors which might influence whether or not a firm decides to become one

This new structure for a law firm provides for non-qualified people/organisations to offer legal services. It is likely that the banks, building societies, membership organisations, insurance companies and, most visibly, big brand retailers will look to provide legal services.


For high street lawyers unwilling to embrace the new order, the ABS represents a real threat. New entrants to the market with significant financial resources, mighty advertising and marketing muscle, will take the opportunity to extend their portfolio of services to offer law directly to their customers.

It is unlikely they will tackle the difficult/more complex work, but with investment in latest technology and software they will ‘cream-off’ the simple, ‘process-driven’ work such as simple wills, domestic conveyancing, uncontested divorce.

With the consumer more fickle and price-driven than ever, people who have little thought for quality of advice or real professional value will snap up the chance of using the well known ‘factory’ brands. Forgive the implied slur. I don’t mean they will not do a proper legal job, but it is likely that they will subcontract the work to ‘law farms’ – possibly not based in the UK – on low fixed-costs deals, where the staff are not expensive, and thus not necessarily too experienced. Accessing personal service is likely to be difficult.

This is likely to drive a substantial nail into the coffin of high street firms already hit by the recession and spiralling PI costs.


On the other hand, lawyers who wish to respond to the challenge and create a new way of delivering their services will see the ABS as a major opportunity.

  • Move into a market niche – by offering extremely specific services and products to a well defined market with added value, you are more likely, not only to weather the storm, and to both retain your most valuable and loyal clients, and also attract the sort of new clients you really want
  • Shift gradually away from the low-margin ‘process-driven’ services, which will, in all likelihood, be snapped up by the ‘factory brands’. Up-skill, retrain and reposition the firm to concentrate on the less threatened and more lucrative matters: Commercial, Employment, work for high net worth individuals, complex Litigation and Family work. By the way, these are, of course, exactly the markets which Accountants, IFAs and other professionals wish to work in too
  • Grow – take advantage of the ABS opportunity to take two new steps:
  1. Stop regarding your fellow high street lawyers as competitors: they may have been so in the past, but you need to stand shoulder-to-shoulder with one another against the new foe.  Start to consider how to work more closely together as the deadline draws near.
  2. Start to plan a new ABS organisation with not just your firm but other local professional services firms too, possibly with third party investment capital.  Start looking for the right accountants, IFAs, estate agents, architects etc . . . who can also join with you in the brave new ABS world. You are the client’s trusted adviser – the opportunities for cross-selling professional services are significant.


To help you along this path, Legal Mentors has set up a new membership club -“Vision ABS” – bringing together like-minded Lawyers, Accountants, IFAs and other professionals.

Membership of “Vision ABS” provides access for you to:

  • A blog of latest information, keeping members informed of all the twists and turns of the evolution of the ABS process
  • Regular regional briefings
  • A planning and mentoring process to support the smooth transition to ABS
  • A national ‘ABS mother ship’ into which smaller organisations not wishing to spend the time and effort to create their own ABS, may ‘dock’.

Thanks to Gill Steel for allowing us this opportunity to provide information about ABS.


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