Editor's blog | A tale of two ABSs

As one alternative business structure shrivels, another one rises. Last week, having claimed its first victim when In-Deed sold its ABS legal practice back to its founder, the market also came up with its first significant success story: the acquisition by BGL Group – the company behind Compare The Market – of Top-32 road traffic accident specialist Minster Law.

Just over a year after the first ABSs have been licensed, the new model has come in various shapes and sizes. To an extent the Minster Law deal is the perfect example of the new age of legal services. It combines the main ABS storyline of investors buying into law firms – or buying them outright in this case – with commoditisation and pressure on fees, against a backdrop of compensation culture. In an interview with Solicitors Journal, Minster Law’s founder and departing chairman, solicitor Adrian Christmas, calls it a “genuine Clementi model”.

In-Deed set off with a similar sector-based approach, focused on property and conveyancing. It bought Runnett, a CLC-licensed conveyancing practice, but couldn’t break through the estate agents’ networks. The business looked promising for a while, but not on the scale required to make it sustainable.

Meanwhile, within days of In-Deed pulling out of the market, another player came in. Property service group Move With Us announced the launch of its referral network. It is built primarily not on estate agent referrals but on referrals from the private client sector. And it is not tied to an in-house conveyancing ABS but, by definition, on a range of firms nationwide. It even boasts Irwin Mitchell and New Law (both of which have interests in ABSs) as its early adopter members.

Which takes as back to ABSs, and the fact that Move With Us is not one, like many other operators in the sector for whom the network model remains more convincing. Large-scale deals like Minster Law – BGL, or Parabis, are good examples of ABS-leveraged opportunities. In these cases, legal services are one link in a whole chain of services to a particular industry – the insurance sector. That model is yet to be replicated in other markets, including property. So far, none has undergone the dramatic changes that have hit the personal injury market. Until this has happened, the full potential of ABSs, and whether they will threaten SME law firms in the way they do in the PI sector, is yet to be proven.