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Over half of all solicitors still considering alternative structures

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  • 06/11/2012
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Over half of all solicitors still considering alternative structures
More than half of legal firms admit they would consider becoming an ABS or are still undecided, with just 43% saying they've ruled it out, according to a national survey of legal firms by property search provider SearchFlow.

The Legal Services Act, which passed into law on 6 October otherwise known as Tesco law, allows any type of firm to launch a legal brands.

Several firms are preparing to bolt legal services on to their brands including the AA and the Co-op.

Central London firms are the least interested in restructuring the traditional legal partnership (LLP) model, whereas 43% of firms in the North West said they would consider it.

Some of the changes firms are preparing to make to cope with the arrival of ABS include increasing marketing spends, changing their practice areas and offering fixed fees.

While 14% of firms believe that in the next year the increased competition from ABSs is the greatest threat to conveyancing, 28% thought the main threat would come from lender’s panel selection decisions.

Richard Hinton, business development director at SearchFlow, said: “More changes are expected to be felt in the coming 12 months, and more than half of all firms have not ruled out becoming an ABS.

“It was interesting to note that just 20% of central London firms would consider becoming an ABS. Some of them possibly feel there is less incentive for them to do so as they already have alliances and volumes of business that make them feel more protected in comparison to other parts of the country, but this could always change.

Caroline Havers, managing director, of Solex Legal Services said given the poor state of the market and the huge implications of the Legal Services Bill it’s hardly surprising people haven’t rushed in headlong.

“The capital required to create a new business structure is huge. However, a corporate structure would also make it easier for a law firm to justify long-term investment and eventually sell the company and extract value.”

“The market is such that legal firms will need to cluster to save costs,” she added.

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