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When the Legal Services Act opened the door tonon-lawyer ownership of law firms, the fear that stuck quickly found itself a memorable nickname: “Tesco law.” The worry was that supermarkets and insurers would march in and turn legal advice into a commoditised product, perhaps almost literally stacked on a shelf. The first alternative business structures were licensed in 2012. More than a decade on, the supermarket invasion hasn’t happened – Tesco as of time of writing still isn’t selling wills, for example – but the effects of the alternative business structure (ABS) model are still structural.
The idea of the ABS model is straightforward in theory: An ABS simply allows people who are not lawyers to own, invest in, or help run a law firm. The concern, for some, was that people without legal expertise could begin selling legal products to UK legal clients. In practice, roughly half of the firms that took up the structure were existing partnerships converting so they could give a stake to a finance director, a practice manager or a family member – hardly the radical newcomers anyone had braced for.
The examples of the early adopters were a lot more varied than the “Tesco law” caricature implied. Irwin Mitchell, the first top-50 firm to convert, used the opportunity to reorganise its management structure. (Worth noting: Irwin Mitchell has also recently considered a private equity deal, perhaps indicating an appetite for new legal business models.) Gateley became the first UK-listed law firm, floating on AIM in 2015, and others followed it onto the public markets, including Knights, DWF and Keystone, which is particularly relevant because it is a platform firm: its lawyers work as self-employed consultants under a shared brand and central infrastructure, and it became one of the more successful listed legal businesses doing exactly that.
Rather than the rapid and seismic shift many feared, the growth of the ABS has been steady but gradual. ABS firms rose from around 8% of SRA-regulated firms in 2017 to roughly 13–14% by the mid-2020s, while the total number of firms in England and Wales slipped below 9,000. So if not a route to “off the shelf” quick-consumer-legal products, and if not the model that will unseat the “traditional” UK law firm, what is the ABS today and who does it appeal to?
Increasingly it appears to appeal, above all, to firms that want to grow on terms a partnership can't easily offer. As Adrian Jaggard, CEO of AIIC Group, put it to us when we interviewed him for our far-reaching research on the current state of the UK legal market, partnership structures can make it hard to commit to long-term growth, or to the new ways of operating seen in other industries – partly because the partners voting on them may be near the end of their careers, and unlikely to be around for the payback. That creates friction between those planning for growth and those planning for retirement. A structure that brings in outside owners, or simply a commercially minded non-lawyer at the top, takes that friction away and lets those with growth ambitions act on it.
That’s not to say the ABS model is for everyone or a silver bullet that guarantees growth. The concerns raised are still important – particularly that an outside investor might steer a firm toward only its most profitable work, pulling against a lawyer's duty to clients and to the court.
The traditional partnership is not disappearing, and nor should it. It still produces excellent firms, and for plenty of them the things an ABS unlock are things they neither need nor want.That, perhaps, is probably the strongest lesson to take away from the past fifteen years. The ABS did not replace the traditional firm; it removed the assumption that there was only one way to build one. The best firms are not beholden to any one model. They are deciding, deliberately, how much tradition and how much reinvention they want and choosing the model that aligns with their ambitions.
Dye & Durham’s recent report, “The Future of UK Law Firms 2026”, takes an in-depth look at how the UK legal market is changing and how senior leaders are responding and competing. Download your free copy.
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