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Taking Your Law Firm Public—The Future of International Legal Business
Alternative business structures for law firms in the United Kingdom is another way of saying that law firms in England and Wales may have outside owners if Parliament adopts the proposed Legal Services Bill this year.
The bill, part of a move to put consumers first by modernizing the oversight of legal services to encourage competition, is expected to allow outside financing and investment in law firms. It was also the focus of a presentation, "Taking Your Law Firm Public—the Future of International Legal Business," at the Spring Meeting of the Section of International Law in Washington, D.C., earlier this month.
Alternative business structures would permit "lawyers and non-lawyers to provide both legal and non-legal services to clients," noted panelist George Bull, head of the Professional Practices Group at the accounting firm of Baker Tilly, London, England. In his presentation, Bull explained how the legal services bill developed, providing for alternative business structures as well as for lawyer and non-lawyer partnerships.
In addition to creating the possibility of external ownership of law firms by selling equity in the firm, the bill raises the possibility that law firm investments could be floated on the open market.
Bull, and other panelists, Fiona Woolf, president of the Law Society of England and Wales; Adrian Taylor, Taylor & Associates, Frankfurt, Germany; and Michael Ellenhorn, Longbridge International, London, England, addressed the impact the bill would have on firms and individual lawyers.
Woolf described the two types of alternate business structures. First is a legal disciplinary practice, which involves non-lawyers through external investment. The second is a multidisciplinary structure, which involves lawyers teaming up with other professions, such as economists or accountants. The latter structure would be more difficult to regulate, according to Woolf.
Lawyers are concerned about the potential loss of independence with external financing, said Ellenhorn. He anticipates that external financing is likely to account for minority ownership so the loss of control would not be that severe.
Alternate business structures, noted Taylor, may benefit lawyers in allowing for greater flexibility in remuneration and incentives, as well as retention and development. He said these new structures will transform how law firms are built, significantly impacting legal recruitment at every level.
A copy of a paper by Bull on this topic, as well as other program materials from the International Law Spring meeting are available at http://www.abanet.org/intlaw/spring07/materials.html
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© 2007 American Bar Association
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