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Rise of the boutique ABS

20 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 (pictured), 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,” he told Solicitors Journal.

“Think of a Mayfair practice, for instance, that 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 arrangement.

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.