International firm Reed Smith has converted its UK operation to an alternative business structure (ABS) in what it says is a plan to ‘future-proof’ the practice.
The ABS licence, which applies to the UK LLP, means non-lawyers can now manage and own Reed Smith. The firm is also allowed to provide services beyond traditional legal advice and to receive external investment. The conversion could potentially mark the first step towards flotation.
Reed Smith is the first international practice to be granted an ABS licence from the Solicitors Regulation Authority. ABS models are not permitted in the firm's home jurisdiction of Pittsburgh, Pennsylvania, nor in the United States more generally. However, states such as California, Utah and Arizona are pushing for regulatory reform.
According to the firm, the switch will have no impact on the existing corporate structure of the firm, and the single partnership and single global profit pool will be unaffected.
Tamara Box, managing partner for Europe and the Middle East, said: ‘As the first international law firm to convert to an ABS, we are future-proofing our business and now have the agility to immediately seize new opportunities – in tech, big data and other specialised consultancy services – that will help us drive our clients’ businesses forward.’
She added that clients are looking for ‘a strategic service provider that can go beyond just providing advice on the black letter law’.
Andrew Jenkinson, London office managing partner, said: ‘As some states in the US look to replicate the possibilities provided by the ABS model, we are excited to be at the vanguard among international firms in this wave of legal sector innovation.’