Insurance specialist Kennedys has received approval from the Solicitors Regulation Authority (SRA) to become an alternative business structure (ABS). The new status will allow the firm to retain four non-lawyers as partners. The new status took effect on 1 November.
Kennedys chief executive officer Guy Stobart told Legal Business that the firm converted to the new structure to ensure regulatory compliance but added that becoming an ABS would also throw up potential new business ventures, in particular, allowing the firm to partner with non-lawyer services.
‘No doubt, the conversion to ABS provides opportunity, and one we are piloting right now is to create satellite operations,’ said Stobart.
In 2009, Kennedys was the first City law firm to become a legal disciplinary practice (LDP), which enabled chartered legal executives to become partners. Under the Legal Services Act, the LDP model is set to phase out – another reason why the firm has opted for the ABS model.
‘We will cease to be a LDP, which leaves us with two options – go back to being the old-model partnership or become an ABS. We didn’t want to lose our four partners so the ABS is a good fit,’ said Stobart.
Kennedys currently has four non-solicitor partners – two legal executives and two partners with no legal qualifications.
Senior partner Nick Thomas (pictured) added: ‘Having an ABS licence will not change the day-to-day running of the business and we are not considering external investment in the law firm. It will help us operate as a modern legal services business, with greater flexibility to take advantage of future growth opportunities.’
In the 2013/14 financial year, Kennedys reported 10% increase in turnover to £128.5m with £98.3m being generated in the UK. Revenue has grown 91% in the last five years, while profit per equity partner was up 3% in the last financial year to £419,000.