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An alternative business structure is a firm that has non-lawyers in its ownership and management structure. This allows firms to involve key people who bring additional experience and skills. The non-lawyer can be involved through investment or as a partner or director.
Practice notes represent the Law Society’s view of good practice in a particular area. They are not intended to be the only standard of good practice that solicitors can follow. You are not required to follow them but doing so will make it easier to account to oversight bodies for your actions.Must – a requirement in legislation or a requirement of a principle, rule, regulation or other mandatory provision in the SRA Standards and Regulations. You must comply, unless there are specific exemptions or defences provided for in relevant legislation or regulations.22 November 2019
In order to be eligible for SRA authorisation as a solicitor’s firm or alternative business structure (ABS) you will need:
Fancy seeking legal advice from a spring onion in a suit? High-street franchise QualitySolicitors certainly thinks you will be given its 2012 viral ad campaign featuring lawyers with heads made of pound coins, tyres and spring onions.
When SRA-licensed alternative business structures arrived in March 2012, traditional law firms were braced for the arrival of ‘Tesco law’. They expected big brands to use the liberalisation of legal services to create new trading models that would be fed work through the prowess of large-scale marketing operations. The public trusted the brand, pricing and service of their favourite supermarkets above that of traditional law firms. Or so went the argument. And there has been innovation. There are law firms quoted on the stock market and some ‘one-stop shops’ combine legal advice with other services, for example. But it would be overstating matters to say this has been a revolution. Perhaps the big story here is the way traditional firms adapted and invested to compete with the threat – real and perceived – that ABSs posed.Alternative business structures (ABSs) were introduced as part of the Legal Services Act reforms aimed at creating a liberalised legal market while still protecting consumers of legal services. ABSs are legal services businesses that can be owned and managed by non-lawyers, either through investment or as a partner or director.'Our customers come to us with problems that typically require some element of legal advice but are best solved by integrating that expertise with legal operations, technology, and services at scale'Having watched the UK’s ABS evolution, the US is now working towards legal market liberalisation state by state. Arizona and Utah are leading the way, with New York, California, Illinois and Florida exploring the options. So far, Arizona is the only state that is granting ABS licences. In January 2022, law company Elevate was granted an ABS licence by the Arizona Supreme Court, making it the first non-lawyer-owned company in the US with an integrated law firm, and the first with ABS licences in the UK and the US. Elevate’s integrated legal services were previously unable to accommodate reserved activities so potential customers were turning to the Big Four instead. Arizona Supreme Court: granted law company Elevate an ABS licence‘These changes will allow [UK legal services] to reach new heights as solicitors’ firms develop new markets and seek external investment,’ justice minister Jonathan Djanogly said in 2012Paul Bennett, Bennett Briegal'Firms that would traditionally have been looking at private equity and large-scale growth via the ABS route are now looking to consolidate and merge so that they can exit via a listing'
Setting up as an ABS allows a firm to have non-lawyers in its ownership and management structure. This can bring in key people with valuable experience and skills. The non-lawyer can be involved through investment or as a partner or director.
The alternative business structures advantages and disadvantages depend on the long-term goals for a business and the state in which it registers. Alternative business structures offer pros and cons, but many newer law firms are choosing this format for their practice.
About three months, sometimes less, from the time we submit an application. The secret to a smooth authorisation is putting together a compelling, complete and well drafted application. We should be looking at making the Authorisation Officer’s life easy, by putting all relevant information front-and-centre. Warts and all.
Thomson Reuters Legal Insights EuropeIt has been 10 years since the Legal Services Act established Alternative Business Structures (ABSs), which provided the pathway for non-lawyers to hold management and ownership roles within UK law firms for the first time.
Brooke: Solicitors not particularly business-likeA law firm that works with non-legal businesses to offer SME clients a multi-disciplinary service is to convert to an alternative business structure (ABS) so that they can share fees.Name *