Although this is not a new topic within the legal sphere, I thought it would be good one to discuss as I have just spent a week at Barclays, in Canary Wharf on a legal summer placement scheme.
ABS, for those of you who are not familiar with the term, is an acronym for Alternative Business Structure. It refers to the innovation of the traditional law firm business model, restructuring legal services in a way that is more inline with typical businesses.
There has been much debate within the legal and wider professions as to whether this is the beginning of a decline in the quality of legal services, possibly posing a threat in terms of undermining the status of a lawyer reducing them to a lesser title – perhaps of a legal service manager?!
I personally hold a different view. The introduction of alternative business structures mirrors the paradigmatic shift in the way we approach the relationship between law and the corporate world. The opportunity to become a one-stop shop, caring for all of your clients needs under one roof is an offer too tempting for many accountancy firms, for example, not to take up and some clients feel the same. The accreditation of ABS status broadens the client’s choice of legal service provider and in some areas the more innovative, less rigid approach is particularly pertinent in a dynamic industry such as technology.
ABS breaks the barriers in other beneficial ways too. Acting and thinking like a business means an ABS arguably ought to mirror the flexibility of one, and many do. I think this is a good place to make the point that unlike traditional law firms, ABS’ whilst being referred to as such, can vary from each other immensely so when I discuss beneficial features I am talking from a broad view; they do not all prescribe to the same characteristics and principles.
Law firms traditionally structure their fee scheme on a billable hours concept, whilst ABS’ can adopt fixed billing, which I believe can give their clients more control over the expense of their advice – or at least a more reliable forecast of the final expenditure. This is a strong selling point for start-ups, who are at the stage of development in which they do not possess high capital or a steady stream of sales yet.