Latest crop of ABSs eye external investment and non-legal services
A barristers’ chambers that forms part of a law firm group is amongst the latest crop of new alternative business structures approved by the Solicitors Regulation Authority (SRA).
The SRA has now issued 90 licences, including multiples for firms with different entities.
Eastgate Chambers – which was already an SRA-regulated law firm – is a criminal practice which specialises in advocacy in the higher courts and Parole Board/prison hearings.
The set has three barristers as members and operates nationwide. It was set up in 2010 by Chris Clark Solicitors & Estate Agents in Stafford and receives its work from the solicitor side of the business.
The chambers has become the first part of the model to get its ABS licence. Mr Clark is one of three solicitor directors of Eastgate Chambers, with the fourth his wife and office manager Margaret.
Mr Clark will now apply for the estate agency to become an ABS and then look into external investment for the “natural evolution of the organisation”.
He said: “We’ve always been a bit innovative. I see ABS as the business model for the new legal landscape – different professions working for the best customer service.”
The firm also handles probate and conveyancing, employing three lawyers plus duty solicitors.
Also given approval in the latest ABS round was Stratford-based debt recovery processing specialists GPB Solicitors. The £5.5m revenue firm has seven qualified solicitors and is run by four members, Zakia Khalid, Simon Newbold, Adrian Organ and non-lawyer CEO Tony Kirton. The 70-employee business is organised in three departments – debt recovery, corporate and commercial and personal matters.
Mr Kirton said the firm is established in collecting debt for clients and also has a substantial probate department. He said: “We are not your run-of-the-mill law firm. We have a call centre and employ more than 70 people with solicitors just in the places we need them. The firm has non-lawyers in operational positions to make it tick.”
He said GPB had embraced ABS form the outset as part of a long-term strategy: “A lot of our commercial clients like what we do and if they want to become more involved through either investing in – or becoming part of – the business, ABS gives us the scope for both. We are acquisitive and looking for specific mainly non-law products to bring in-house, if we feel we can do it better.”
David Green, non-lawyer chief executive of MTA Solicitors, based in Bromley and Manchester, said the firm’s ABS licence will enable the business to restructure and diversify so as not to be as reliant on the personal injury sector.
As previously featured on Legal Futures, consumer practice MTA is part of a £30m annual turnover group which includes other legal brands – MTA Corporate doing commercial work in London and conveyancing-focused Crossmans MTA in Cambridge. Under the MTA group structure are 10 associated businesses including accident management and debt recovery services, which Mr Green says “feed into each other”.
It has a LawStore in a Bromley shopping centre and the whole group employs around 400 staff, of whom 40 are lawyers.
Mr Green said: “ABS gives us the ability to explore other opportunities with providers of work. Because we were a legal disciplinary practice, we had a head-start on diversification and had to convert anyway, but this means we can move into the new regulatory landscape and bring in other non-law partners.
“We are not moving away from the personal injury sector, but bracing ourselves for dramatic financial change in the market. ABS is one step as we look to make profits elsewhere.”
Mr Green said the business has not “actively sought or turned away” outside investment, but just has not found the right partner.
Oldham-headquartered eight-partner high street firm Pearson Hinchcliffe was also granted an ABS licence this week. It has a growing commercial team and clinical negligence practice, and practice manager Joanne Ormston said ABS would allow the firm to become “even more business focused”.
Daniel Prince, its new head of legal practice, added: “ABS status gives us the ability to attract bolt-on services, allowing us to expand our offering, in essence becoming a one-stop-shop for all professional services.”
“It also allows for non-lawyer owners to share in the business and can attract external investment to enhance our future progress and development, which will always be based on the needs of our clients.”
And the fifth of the new ABSs, Worcester-based Parkinson Wright, is the latest addition to the 400-strong QualitySolicitors network. The seven-partner firm has offices in Worcester, Evesham and Droitwich.