ABS diary | Taking the first steps

It has now been two months since we got our licence and we officially became John Welch & Stammers ABS on 6 April.

The news coverage, local and national, was interesting and generally positive. The local press had little understanding of what being an ABS actually means, particularly with regards to non-lawyer partners, but the articles brought about local interest and were free advertising for us. Again, our clients mostly do not understand, or are even interested in, why we have become an ABS but we have had extremely positive comments about me becoming a partner at long last.

However, we have reassured all our clients that our ethos remains the same so from their point of view nothing has changed.

David Cameron is our local MP and we received a personal letter from him offering congratulations and I have been approached by various people with regards to doing talks, etc. about ABSs, so, for at least the short term, being one of the first licensed ABSs has put us on the block.

My day-to-day role at John Welch & Stammers has not changed since becoming a partner – why should it have done? I already had all the responsibility, commitment and stress that comes with being a practice manager, the only difference is that my contribution has finally been recognised!

Stresses and strains

One thing that was stressful for us, and which you need to be aware of when you apply to become an ABS, is that from the date you are licensed your old firm has to file a cease to hold accountants’ report with the SRA and the old firm has to be closed down as far as the SRA is concerned. You will be allocated a new SRA number for the ABS and your new accounting report date will be from the date the ABS commences. I was unaware of this (although in hindsight it should have occurred to me to at least question this) and the SRA and our accountants did not mention it until we were already licensed, which meant quite a lot of urgent administration that I was not expecting – it would have been better if I had been prepared for this in advance.

In our case our financial year and reporting year are from January to December, so I have had to apply to the SRA for the reporting year for 2011/12 to be extended and the reporting year 2012 to be shortened, so that our reporting and financial year are back in sync for 2013. Although I have not officially heard back from the SRA, they have advised me that in such cases this is not usually a problem.

However, our accountants were not best pleased as they had already drawn up our report for 2011 and are now going to have to audit an additional three months, and there will obviously be cost implications involved in this for us.

Apart from the accountants’ report, I have had very little contact with the ABS team since our licence was approved, which is great from my point of view and I assume is a direct result of their thoroughness when considering licence applications.