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More ABS plans announced

Posted by: Laurence Simons 18/07/13

A growing number of UK firms are attempting to set up and alternative business structure (ABS) through which they can provide legal services alongside some form of non-lawyer involvement - either at the management level or the ownership level.

While the diversifying of the law market was arguably inevitable, especially in the current political climate, it is unclear whether or not it will prove to be good news for UK lawyers. On the bright side, it could conceivably create more jobs, albeit without the prestige of the Magic Circle.

Conversely, the shift could prove damaging for many mid-tier law firms, who will - as recent reports have suggested - need to up their game when it comes to branding and marketing if they want to compete with canny commercial operators.

Two of the organisations keen to get in on the act are the Direct Line Insurance Group and logistics giant Stobart Group, reports the Lawyer magazine.

The former already has some experience in this area, with brands such as Churchill and Privilege offering customers in-house legal advice, and will join up with Parabis Law to provide a range of affordable services.

Direct Line Group chief executive Paul Geddes said in a statement: 
"We have the opportunity to protect our customers from excessive legal costs, especially in the event of a personal injury claim."

Stobart, more readily associated with magnificent trucks than boring old lawyers, has launched a firm called One Legal alongside its first legal venture, Stobart Barristers, which opened last year with plans to provide direct access to barristers.

There has been some speculation that the new firm could be planning to take over the government's legal aid contracts - Stobart Barristers founder Trevor Howarth sparked controversy last year after describing traditional legal aid firms as "wounded animals waiting to die".

The new ABS principle could have an impact on in-house lawyers as well. Becoming an ABS would help internal lawyers offer their services more widely to external clients as well as those inside their business.