Legal Services Act Big Bang or Whimper
Did the world change as we know it on 6th October 2011? I suspect for most people in and out of the legal world the answer is no. In the Solicitor area the delay in the Solicitors Regulation Authority becoming a licencing authority has for most firms meant no change. But has the rest of the world changed around them?
We have now seen the first signs of change with Premier Property Lawyers becoming the first firm offering legal services to apply to the Council for Licenced Conveyancers (CLC). The CLC also claim that they have 20 other “active enquiries” from solicitor firms considering changing regulators.
QualitySolicitors have also announced a major investment from private equity house Palamon Capital Partners. This is not however an investment in a legal firm creating an ABS but in the umbrella marketing operation. The investment is to be used primarily for a multi-million-pound marketing campaign to promote the brand. Whilst they are also investing in an internal training department I doubt that this will fundamentally change the individual Solicitor firms who continue to operate in their own house style. More a Best Western Hotel marketing model than a Specsavers uniform model where the individual shops share the same standards inside as well as outside. Does the brand stop at the front door or should it continue inside to be truly effective?
Law firm Everyman Legal has also announced its intention to list on the junior trading platform Sharemark after becoming an ABS next year. Companies can later move up to the Alternative Investment Market (AIM) or even a full listing on the London Stock Exchange. Irwin Mitchell announced their intention to seek external investment some time ago but I have heard nothing further from them on this topic.
Looking further afield Australian law firm Sutton & Gordon have an interesting approach to being an ABS. They became a listed company in 2007 and used external investment to acquire other firms and grow rapidly and invest in practice management systems. What makes them interesting is that 40-50% of the equity is held internally by employees of the firm. This model could be well worth look at for Uk firms looking to spread the ownership through the firm.
This article follows from our earlier articles ABS Threat or Opportunity and Invest in a Law Firm? where we looked forward to October, click on the links to view the previous articles.