Jacoby & Meyers is to establish a new joint venture in the UK as the major US consumer law firm says the UK’s external funding and ownership regulation has ‘stolen a competitive march from the other key legal jurisdictions, including the U.S’ that will see Jacoby now focus much of its growth in London.
The joint venture with City-based private equity and corporate law firm MJ Hudson – founded by heavyweight ex-Proskauer Rose London head and former SJ Berwin partner Matthew Hudson – is called Jacoby & Meyers Europe and the group is likely to seek Alternative Business Structure (ABS) status in the UK, allowing it to attract non-lawyer equity ownership and funding.
Hudson, who co-founded the private equity group at SJ Berwin, re-established the O’Melveny & Myers London office and launched Proskauer Rose’s City office, said: ‘With the introduction of the UK new ownership regulations for law firms, the U.K. has stolen a competitive march from the other key global legal jurisdictions, including the U.S. Jacoby & Meyers is lobbying for similar external ownership changes in the US – without those changes the practice of law in the US is in danger of falling behind the rest of the world.
‘With ABS, traditional law firms will be able to compete for funding with US web-based, client lead generating companies as well as legal forms companies. These types of companies offer limited legal services and products, but are allowed to have outside investors because they are not considered law firms.’
Len Jacoby, who together with Stephen Meyers established the firm’s first office in California in 1972, added: ‘Our ability to raise the capital to serve the public is severely restricted in the U.S. by an outdated Rule of Professional Conduct. Now a significant part of our growth strategy will be based in London.’
Much in line with Australian-listed Slater & Gordon, which acquired Russell Jones & Walker last year in a landmark £53.8m deal and went on to acquire personal injury practices Simpson Millar, Goodmans Law and the personal injury practice of Taylor Vinters, a statement from Jacoby yesterday said: ‘Jacoby & Meyers Europe has a number of UK and European consumer law acquisition targets.’
The move comes after concerns that the Consumer Rights Bill published in June will open the floodgates to US-style class actions. The Bill included a provision that allows members of the public, businesses or consumers to bring collective actions on an opt out basis, a measure heavily criticised by bodies including the Confederation of British Industry.