The Legal Services Board (LSB) publishes today the findings of its research into alternative business structures (ABS) and investment in legal services. This includes the results of the largest ever survey of ABS.
The main objectives of this report have been to assess ABS investment activity, to consider whether there are any regulatory barriers to investment and to understand how attractive the legal services market is to investors.
Commenting on the appointment, Neil Buckley, LSB Chief Executive said:
“The investors we spoke to told us that they see opportunities for investment in the legal services market to improve efficiency, to fund innovation and to increase productivity. External capital is however not yet used as much in the legal services sector as might have been expected.
A significant majority of ABS firms (66%) either have already invested or are planning to do so, since they gained their ABS licence. This is positive evidence of the increased scale that allowing non-lawyer ownership was designed to enable. There is also evidence to link higher levels of non-lawyer ownership and the likelihood of having made an investment.
The research shows that there are no significant regulatory barriers to investment in the legal services market. Nor does the cost of legal services regulation seem to be a barrier. Instead the key challenges are cultural – lawyers are reluctant to cede control of their businesses, preferring instead to rely on profits and reserves, or bank lending.“