The advent of alternative business structures (ABSs) could bring about a ‘point of no return’ whereby smaller firms are pushed out of the market by powerful new players, a legal thinktank has claimed.

The College of Law’s Legal Services Policy Institute has warned that, by the time a new provider – be it a bank, supermarket or insurance company – has become too dominant, smaller suppliers would ‘almost certainly’ have already exited the market.

In its response to the Solicitors Regulation Authority’s consultation on ABSs, the institute warns that the regulator should ‘consider carefully’ the influence and power of large institutional suppliers of legal work.

It said it expects new entrants to benefit consumer clients seeking advice in relation to moving home, personal injury, employment and social welfare. Their expertise in branding and supply chain management will allow them to offer more accessible face-to-face, telephone and online services with longer opening hours, less ‘jargon’ and better complaints handling, the paper suggests.

However, the institute notes that there is ‘no guarantee’ that the huge scale of some providers will necessarily lead to cost-efficiencies being passed on to clients. Institute director professor Stephen Mayson said it would be ‘rash’ to assume larger providers would lead to lower prices, noting that ‘one of the things businesses do is optimise profits’.

Responding to the Legal Services Board’s consultation on the same subject, the Bar Council said the timetable for the introduction of ABSs is too tight, and suggested that multi-disciplinary practices should not be introduced until the regulatory consequences of legal disciplinary partnerships has been assessed. ABS licences are expected to be available from 2011.

Meanwhile, the Co-op has launched a high-profile campaign to promote its legal services to the 17 million weekly shoppers in its food stores.