Editor's blog | When high street firms are reinventing ABSs

The ABS storyboard started unwinding in another direction yesterday. One which should make traditional law firms look up and feel that the whole Legal Service Act upheaval could, in fact, work out to their advantage.

The latest round of ABSs authorised by the SRA suggests that it’s no longer just about Tesco law, private equity buying up law firms or, more recently, the Co-op preparing to run high street firms out of business. It suggests that something else is happening.

It wasn’t the main plot in the original scenario but traditional law firms have begun rewriting the script and appropriating the ABS proposition to further their own agenda.

The trend beginning to emerge is that, far from being left behind by the pace of reforms, firms are looking at the new corporate structure as an opportunity to do what many say they have wanted to do for some time.

Emerging trend

It started with the first two small practices to be authorised as part of the first round, John Welch & Stammers and Lawbridge. All these firms wanted was to allow non-lawyers playing key parts in the business into the partnership. Until now they couldn’t if they weren’t at least a four-partner firm. ABS could be a life line for these firms as they can start thinking afresh about succession planning. It seems so obvious that, in retrospect, you have to wonder why it took a whole new radical piece of legislation to bring this change about.

A few have joined the ranks since. The conversion yesterday of a few more brings home to the remaining thousands that the ABS option could be relevant to them too. Especially when you consider that one of the new licensed organisations is top 200 firm Winckworth Sherwood. Of course as an LDP the firm had little choice but to go the ABS way. But as the largest English firm to convert to date – if you exclude the special case of Russell Jones Walker being acquired by Slater & Gordon – it’s a significant chapter in the ABS story.

Sure, this doesn’t mean that how these firms deliver legal services has changed – yet – and none of the newly converted have any immediate intention of raising external capital. But this may come, because as the Co-op and other business savvy entrants start spreading their tentacles deeper into the high street, how smaller firms can leverage the ABS philosophy beyond mere corporate convenience will be a major survival test.