The Alternative Business Structures (ABS) regulatory regime has been in existence for a year now, so it’s worth a look to see how these regulations have impacted the provision of legal services and the organisations who provide them.
It has certainly opened up the legal market, but the expected instant and huge change to the legal market has actually been more of a considered uptake as companies wait to see how ABS beds in.
The key thing when considering becoming an ABS is to determine what extra markets and business you will be able to take advantage of before embarking on ABS certification; after all, there would be little point in pursuing certification if you don’t intend to follow it up with a plan of action to develop your customer offering. This means that an ABS project cannot be considered as an isolated project, but must form part of the entire organisation’s strategy with full buy-in from the full leadership team and a stable business development plan, to ensure the full value of ABS is realised.
Having decided that ABS is the right thing for your organisation, you’ll be faced with a lengthy handbook which comprises the full set of rules, regulations and expected outcomes which must be achieved fully and consistently, both as part of certification and also into the future. Naturally, the next step is to determine where you are in relation to these regulatory requirements and how much work and change is necessary to ensure compliance. This will affect your entire business, including functions such as Human Resources, Marketing, and particularly Finance. It’s essential that this, together with the attention to detail that is required is not underestimated; indeed, the success of your application will largely be affected by how well this stage is done.
Beyond this, it becomes a business change project and can be managed accordingly through any project management methodology to ensure the required actions are delivered according to your target timescale. There are however, some changes to your organisation structure that can be contentious and sensitive, and should therefore be tackled early on in the project. Primarily these are around the key roles and responsibilities that will need to be carried out on an on-going basis, most notably the Head of Legal Practice (the HOLP) and the Head of Finance and Administration (the HOFA), which are ideally director-level positions. It is also necessary for people in certain positions to go through a test to ensure they are “fit and proper” leaders of an ABS regulated business.
The application to your chosen regulator for ABS certification must form a fundamental part of the project plan as it is a lengthy process and requires a great deal of evidence; therefore your project must ensure it creates this information in the way the regulator wants to see it. When it comes gaining your certification and moving onto launch, there is no alternative to a single switchover day due to the way you have to operate and the way you are required to advertise your achievement of the regulations – these are prescribed within the regulatory handbook. As such, the launch must also be meticulously planned to ensure you maintain compliance and don’t confuse any customers of your services.
All in all, Alternative Business Structures can open up a whole new world of business for your organisation, but it does require a complete and detailed planning and delivery process linked to your long-term business goals. Bringing in some outside expertise, be it from a bit of advice to a full project team, should be considered to help avoid some of the pitfalls, particularly if your target timing is ambitious and your desire to expand your business is strong.