No, this is not some bizarre code or new language; this is the world of the Legal Services Act (LSA) – a confusing, exciting world that is full of many splendid acronyms. This blog aims to provide a quick translation and introduction to that world.
The Act allows non-lawyers to become partners in law firms, external ownership of law firms and multidisciplinary practices. Whether you are for or against it, the LSA is happening and as the last month has shown, it is gaining steam.
Since the Solicitors Regulation Authority (SRA) started taking applications for Alternative Business Structures (ABS) on 3 January 2012 there have been some dramatic developments in the LSA world. According to reports in the last few weeks 92 firms have applied for licences with the SRA and the first license is expected at the end of this month.
This week saw the first private equity firm entering the ABS world. It is reported that Duke Street has bought 50% of the law firm Parabis. Parabis provides legal services to the insurance and travel industries. According to the Independent, the deal will value Parabis at between £150m and £160m, and has already been struck but is going through the final stages of the regulatory approval process
The other ground-breaking news was that the first listed law firm, Australia’s Slater & Gordon has entered the UK market by acquiring Russell Jones & Walker (RJW). S&G is paying £36.4 million in cash and the issue of £17.4 million in Slater & Gordon shares, which is subject to restraints on sale for a minimum period of four years post completion.
The first entrant into the ABS race came with the news that Aim-listed Quindell Group, a brand extension company that provides consulting, software solutions and outsourcing, had taken over personal injury law firm Silverbeck Rymer for £19.3m. The Lawyer noted that it was inevitable that the first mover in the post ABS-world was going to be an insurance firm. With ABSs enabling a new structure of an integrated claims-handling operation for the insurance industry you can see why.
Despite all these developments ABSs are still very much a known unknown. The impact to the legal industry in the wider prospect is yet to be seen.
Byfield will be launching an ABS quarterly newsletter to keep track of all these changes. The first will come out at the end of February. If you would like to receive the newsletter please email: Lydia@byfieldconsultancy.com
In the meantime, please see some of the thought leadership papers Byfield has produced with our sister company Jures on Alternative Business Structures:
Big Bang: opportunities and threats in the new legal services market
Shopping Around: What consumers want from the new legal services market
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