ABSs are not just about private equity

Paul Mulderigg (pictured), founder and principal of two-partner firm Mulderrigs, is among the four new alternative business structures to have been licensed by the SRA yesterday (2 August 2012).

The firm was one of the first to have incorporated as a limited company and the move to ABS was a natural next step, Mulderrig says.

Like several of the smaller firms to have converted so far, Mulderigg was prompted to use ABS as a vehicle to bring a non-lawyer into the business – his wife – not by grand plans to raise capital from private equity or start offering non-law services.

Mulderrig qualified 25 years ago and says that, as circumstances have developed, he was keen to try and take advantage of the opportunities given by the new corporate models.

“The whole ABS revolution only appears to be getting media attention in terms of Tesco law or selling your shares to a hedge fund

Mulderrig’s key driver was to make sure that if he “suddenly dropped dead” his wife, who has been working with him since the firm’s inception, would be able to be involved in deciding the future of the firm and choose whether to sell her stake or invite other.

From 1 September, the date where the licence is effective, she will have a 40 per cent stake in the firm.

The firm was also one of the first smaller practices to be Lexcel accredited in 2000, so Mulderrig is familiar with dealing with compliance bodies.

The ABS option was “a gate I’ve been wanting to open for a while”, he says, but nobody at the firm expected the process to be as convoluted as it turned out.

Contacts at the SRA were “professional” and “constructive”, he said, but “the paperwork was disgraceful”.

“How many times do I have to give my name and date of birth, surely once should be sufficient?”, he said, adding that his office manager – “who was the architect of our success in getting Lexcel accreditation and the Investor in People kitemark” – was “tearing her hair out”.