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Bull predicts rise of the boutique ABS

17 February 2012

Boutique law firms broadening their offering beyond the mere provision of legal services could emerge as the unexpected success story of the alternative business structure era, according to the man who advised Slater & Gordon on their acquisition of Russell Jones & Walker.

George Bull, head of the professional practices group at accountants Baker Tilly, said the next move, following the first wave of large corporate ABSs, would see the rise of smaller multidisciplinary partnerships.

“We’ll see the development of boutique MDPs where the aim is to provide a wider range of services to a narrowly defined set of clients,” Bull told Solicitors Journal.

“Think of a Mayfair practice, for instance, who may want to retain its position as service provider of choice to its client base,” he continued. Non-legal services would be provided by bringing non-lawyers into the firm’s capital and could range from accountancy and financial advice to concierge services such as hotel bookings or arranging clients’ dry cleaning.

“It’s about maximising client spend from one access point and there’s nothing wrong with that,” Bull said.

Asked whether his comments reflected genuine interest in the market Bull replied he had been instructed to advise on precisely this type of arrangements.

Looking at the market from a more general perspective, he added that the past few months had seen the highest level of interest in consolidation in a decade.

But Bull also said firms looking to merge or be acquired faced a tough challenge.

At the larger end of the sector very few firms would be attractive to potential buyers – whether these were other firms or private equity, he said.

“The lack of alternative providers has protected law firms from competition but competition will arrive,” he continued.

And, while Bull said there was still a place for law firms on the high street, he suggested many were in a vulnerable position because they had done no succession planning or they were the default legal services provider in an area where there was no other law firm.

In the services industry the saying that ‘people buy people first’ remained true, he went on, before adding that firms that have nurtured client relationship should have little to fear. “They will continue to get repeat business or recommendations,” he said.

Soon firms would no longer be able to rely simply on the fact that lawyers were qualified professionals providing a guarantee of good provenance. “But often it’s impossible to tell whether a legal document is any good until it has been tested. People are unable to say whether a document is good or bad and they will be influenced by the marketing organised by new entrants in the same way they are influenced by comparison websites,” he said.