Justice secretary Kenneth Clarke yesterday warned lawyers to prepare for changes as far reaching as the ‘big bang’ proved to be for the financial sector.

Clarke told members of Birmingham Law Society that alternative business structures (ABSs) would herald a ‘whole new world’ for lawyers. From next October, ABSs will allow firms to move away from traditional partnership models to models where there are non-lawyer stakeholders and external investors. ‘It could be the legal sector’s equivalent of the big bang,’ Clarke said.

He added that as many as 3,000 high street firms may disappear as the advent of ABSs allows well-known brands to bring economies of scale and marketing reach to the legal services market.

Clarke addressed Birmingham Law Society after his speech to the Conservative Party conference.