What is an alternative business structure (ABS) and why you should care

In order to explain what an Alternative Business Structure (ABS) stands for and why you should care about it, we must go back in time and understand how it came about.

In the 2007, a Legal Services Act was passed, which stated that; if you were a solicitor and you wanted to represent clients, you no longer needed to work as part of a law firm, owned by lawyers to do so. As a result of this law, both solicitors and non-solicitors were now able to own their own legal firms and take on legal cases.

The Legal Services Act was a major piece of legislation which massively changed the legal landscape in England and Wales. It introduced sweeping reforms believed necessary to keep pace with the various changes consumers wanted, and which put consumers’ interest at its heart.

Simply put, having an ABS licence meant that you were able to provide legal services even as a non-legal organisation.

The ‘Tesco Law Reforms’

The ‘Tesco Law’ as it became known, meant that for the first time, non-legal organisations such a big companies like Tesco, and other high street names such as Co-Op, and business finance organisations, could provide legal services as well as non-legal services to their customers. Since the introduction of this law, there has been a wide growth in these types of businesses all over, and they have made great profits as a result of diversifying their services.

Benefits of ABS to consumers:

If you are a potential legal services client, then using an ABS structured firm has many advantages.

For a start, the increase in competition has meant a price-win for consumers. Non-legal firms tend to charge lower fees, particularly when you contract them for more than one service at a time.

Because they are a one-stop-shop of sorts, you are able to access all of the services you need in one place, and this will save you the hassle and need to move from one office to another looking for all of the services you require.

ABS firms are usually business organisations that have many different investors, and are therefore very keen to make a large profit for the sake of the investors, which means that their services are usually highly client-focused and high quality.

The firm will almost certainly have a larger staff than many legal practices, giving clients more confidence in the structures and power of the company.

Benefits of ABS to the law firm:

Law firms actually accrue the most benefits from the ABS business set up. They are able to practice their business in many different ways and incorporate all of their expertise in meeting their clients’ needs.

A law firm is in the best position to market themselves and the additional services they can offer due to their experience, and can maximise their profits from all of their additional business ventures. This is because, concentrating on a whole lot of service delivery opens you up to many different clients who bring more business your way, increasing your profits.

A firm is also able to open itself up to bigger markets and explore areas they have never explored before. They can advertise themselves in unchartered territories where there aren’t many companies already, and become the pioneers in those areas.

Advertising opportunities are very many for ABS companies and so are the money-making avenues. Firms are able to do more than they have ever done before because of this great opportunity to make an impact.

ABS firms are not limited by legal rules of doing business which means that they can be as creative as possible in adding on to their portfolios. In addition, they are able to venture into very many different business opportunities for the overall company.

Where previously legal firms could only be owned by lawyers or solicitors, with an ABS company,  outside investors can contribute to the business finance and a whole host of other professionals can bring expertise into the company too.

Better employee retention is possible in this kind of setting since employees who aren’t necessarily lawyers are able to own a piece of the firm in one way or the other.

Limitations of this set up:

Many customers feel that if more and more companies are structured in this way, they will push out the smaller, more specialised companies and leave them with very few options, and result in them being forced to use the bigger companies whether they like it or not.

Customers also feel that these large corporations will become too big for them, and this will lessen the one-on-one, personalised interactions that people like and need sometimes. Those lawyer-client relationships that can build up over years could be eroded away and with it, the trust that people place in their solicitors.

The legal employees of these ABS companies, on the other hand, feel that if the firm is run solely by non-lawyers, they may slowly phase them out, and concentrate on other core businesses, or even end up handing legal work to less expensive non-lawyers.

These employees also feel that the bigger the corporation becomes, the easier it will be for them to cut corners in order to receive favorable results in their legal work. This will lead to the company losing clients as a result of poor work.


ABS setup is a great idea for many companies, but you must consider the pros and cons before engaging in such a business venture as although it may give you the potential to grow the size and scope of your organisation, and with it, your profits, it can backfire. If customers feel you are losing the personal touch or becoming a jack of all trades and a master of none, you may lose your reputation and clientele.

It is, however, an excellent idea if you have everything well planned out, and you have the right type of staff driving the business in the direction you see for yourselves.

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