The number of firms granted alternative business structure (ABS) status in 2013 has now hit the same level as for the whole of 2012, as Shakespeares last week became the latest mid-tier outfit to announce it has been granted a licence.
Shakespeares was the 72nd firm to obtain a licence in 2013, the same number as obtained a licence in total in 2012 after the Solicitors Regulation Authority began accepting applications on 3 January.
After a slow start last year, the first licences were granted in March 2012, when Co-operative Legal Services, Kent family practice Lawbridge Solicitors and Oxfordshire firm John Welch and Stammers became an ABS. 144 firms have now been granted ABS status, fast approaching the 150 milestone.
Birmingham-based Shakespeares, which has completed five mergers since 2010 and last week announced the hire from Eversheds of a six-strong real estate team led by partner Brendan Walsh, say that the conversion to ABS will enable them to target the insurance sector and that a number of talks with organisations are underway.
Insurance partner Craig Wallace said: ‘The boundaries between loss adjuster, third party administrator and broker in insurance have long been eroding but the possibility that any of these companies can now look to the provision of legal services means that we are in unchartered waters.
‘Some say that the legal insurance industry is under threat. I disagree, as legal services will remain a purchase of necessity. What ABS does, however, is challenge who will provide these legal services and therefore ultimately where the cost and profit margins sit.’
In April three household name insurers – Admiral, Ageas and RAC – announced significant moves into the legal services market after sealing ABS joint ventures with law firms.
Elsewhere, disruptive models continue to make headway across the board, and last week also saw fixed-fee legal services outfit Riverview Law sign its first formal strategic alliance with 48-partner, 100-lawyer Crawley-based DMH Stallard.
The firms, which are in discussions about the impending launch of new fixed-fee products, started working together in October last year and will now offer their respective clients each other’s services in a streamlined package on a permanent basis, following a four month pilot with existing customers.
LawVest-owned Riverview, which launched in May 2012 and has applied for ABS status, specialises in fixed-fee litigation and legal advisory outsourcing packages, while DMH will add dispute resolution, M&A and property expertise to the shared offering.
Riverview chief executive Karl Chapman said: ‘This alliance comes in direct response to client demands. We have had very fast growth and demands for legal expertise in areas such as dispute resolution, which we currently have to refuse because we don’t have the expertise in-house. We will now work hand in glove with DMH on these jobs.’
Chapman says that although the firm is not planning further tie-ups with other businesses when the ABS license is granted, the business model will afford Riverview increased flexibility and to potentially strengthen ties with DMH.
Managing partner of DMH Stallard Tim Aspinall said: ‘When we talked it was clear that we both had a similar view of the legal market, forming the alliance allows us both to take advantage of that change to provide clients with a different solution to the provision of legal services.
‘A lot of clients want to buy legal services differently and they’ve never really had a truly different solution. We have complementary skill sets that can provide a more streamlined service in a collaborative way.’