New ABSs critical of application process
The Solicitors Regulation Authority has too few resources to handle the licensing of alternative business structures (ABSs) and should ‘triple in size or work 24 hours a day,’ the senior partner of one of the four firms licensed this week told the Gazette.
The four new ABSs are two-partner Lancashire firm Mulderrigs; four-partner Manchester firm Amelans; 18-partner Swansea firm John Collins & Partners (JCP); and 40-partner City firm Winckworth Sherwood.
Mulderrigs managing director Paul Mulderrig said his firm had converted to an ABS to ‘protect the value of a family asset’ by enabling his wife to have an interest in the firm. He told the Gazette: ‘Until now, if I dropped dead, Mrs Mulderrig would have had to have a fire sale of the business that I’ve devoted 20 years to building.
‘The ABS allows her to have an interest in the firm. It is a joint asset now – and that thought gives me peace of mind. I’m surprised more high street firms are not going down the ABS route.’
‘We are not actively seeking external funding, but if a hedge fund happens along and offers us a couple of billion, we’ll give it serious consideration.’
Amelans and JCP had both become legal disciplinary practices in order to make non-lawyers members equity partners, and are therefore required to convert to ABS status.
Amelans senior partner Andrew Twambley said: ‘Becoming an ABS has given us a whole new outlook on how we can go forward, using our ABS status as a springboard.’
Muderrig and Twambley criticised the application process. Mulderrig said the paperwork was a ‘disgrace’ but he praised the ‘thorough and helpful’ SRA staff.
Twambley complained about the ‘long drawn-out process’ and said: ‘People don’t realise how deeply the SRA goes into detail. We are a four-partner firm. What must the process be like for a complex, multi-tasking, multinational firm?
'The SRA needs more resources - it needs to triple in size or work 24 hours a day,’ he said.
Nobody was available for comment at Winckworth Sherwood.
Comments
I can't quite understand Mr
I can't quite understand Mr Mulderrig's logic. Surely, if he dropped dead, then the surviving partner would carry on? Life insurance is often taken out to provide funds to hire a replacement and to repay capital to surving partners. It's just not necessary for widows to own a share in the practice, and in the cases I've dealt with no one has wanted it.
Application process
If the SRA are considered to need more resources to deal with applications to become an ABS would Applicants be prepared to pay higher application fees to finance this ?