Alternative business structures could save the Bar

Barristers can tap into new revenue sources by taking full control of cases from start to finish, writes George Bisnought

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May 03, 2017
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A decade after the Legal Services Act 2007 paved the way for alternative business structures, the Bar Standards Board has finally licensed this new breed of practice that provides regulated activities with either, or both, non-lawyer owners and managers.

Some may see this as a further leap towards fusing the professions of solicitor and barrister. But it is more significant than that for the latter, who are already struggling with crippling overheads and diminished income from fees. By allowing barristers to form partnerships with other business professionals, liberalising regulations on non-lawyer ownership may throw a lifeline to many at the Bar.

Of course, solicitors have been doing it for years. The Solicitors Regulation Authority granted its first licence in 2012. Since then it has granted nearly 600 licences, often to large organisations from outside the traditional legal profession.

Enabling law firms to attract external investment in this way and to develop novel business structures has proved controversial. As an example of potential pitfalls, critics point to the 2015 collapse of Parabis, an insurance law specialist claimant and defendant firm that was the first ABS to attract significant private equity investment. But there have been far more successes, and it is here that barristers should focus their attention.

ABSs provide fresh capital, skills and innovative thinking. As Philip Robertson, the Bar Standard Board’s policy director, observed, for barristers who want to practise in ABSs regulated by the board, it gives them “more freedom of choice as to how they provide legal services and supports innovation”. The board has been regulating authorised bodies since April 2015, focusing primarily on advocacy, litigation and specialist legal advice. What is new is the regulation of licensed bodies and initially the board expects to grant four ABS licences.

Some barristers had already chosen the ABS route under SRA regulation. Richmond Chambers, an immigration set, became the first in 2013. Others followed, including ARP Legal, established in 2015 by five barristers and the managing director at 5 St Andrew’s Hill to target the international asset recovery market.

The objective, generally, is not so much to save costs but to develop revenue sources by allowing barristers to remove the conduct of litigation from the hands of solicitors: preparing documents, taking witness statements, and gathering evidence. Taking full control of a case from start to finish creates more work, although additional staff may also be needed. For those who embrace the ABS opportunity with imagination and energy, it might allow them to stay in practice by expanding existing and generating new income streams.

The future of an independent Bar of specialist advocates rests not just on independent thinking, but on imagination too. It may be the best way to save it from extinction.

George Bisnought is the founder the national firm Excello Law

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