Editor's blog | ABS genie
ABSs are firing up the personal injury market, but not the imaginations of stakeholders
Alternative business structures are failing. Not in the sense that they're not working '“ it is too early to say '“ but in the sense that they are not firing up stakeholders' imagination in the way the creators of the Legal Services Act had dreamt. They are only of interest, it seems, to the personal injury market.
Of course, there are the large consumer organisations looking to extend their brands across across a range of legal services.
The Co-op, bravely, is casting its net to cover legal aid. The re-election of veteran family lawyer Jenny Beck, its head of professional practice, as co-chair of the Leal Aid Practitioner Group last week, is another signal of the mutual's intention to occupy that space.
Similarly, Saga are looking to use the ABS vehicle to leverage their existing membership-style models.
And there are the smaller firms, whose owners wanted to allow a non-solicitor family member to become a partner. None of these appear to have plans to exploit the ABS structure to facilitate a new development strategy.
It's not that personal injury legal businesses aren't designing creative models. Think Parabis, which is providing the legal back office advice to Saga and is successfully consolidating its presence in both the claimant and defendant sides of the market by offering end-to-end services to insurance companies.
There is little to be enthusiastic about this week's latest round of ABSs in this regard '“ four in total. 48-partner firm Lyons Davidson intends to use its new status to develop new relationships with insurers ahead of the referral fee ban, while Bolton-based Keoghs, which specialises in defendant insurance work, has sold just over 20 per cent of its capital to a private equity arm of Lloyds.
The other two ABSs in this lot deserve a mention however, for appearing to demonstrate how smaller practices could explore the ABS potential. First, Legal Clarity, a company formation and transactional support services business set up by two former Slaughter & May lawyers, now non-practising. It's not a law firm but they've decided to become an ABS and be regulated as an entity by the SRA.
Second, Stuart Hodge Corporate Lawyers, who specialise in matching entrepreneurs with business angels and operate in several jurisdictions across Europe and the US. They're keen on fixed-price and describe themselves as 'total solutions providers, not just a provider of legal services'. Now, this is beginning to sound like a proper ABS.