Lawyers. Most people donโt like them. Hell, even some lawyers donโt like lawyers. But as much as we love to hate them, we still need them occasionally.
When it comes time to get a divorce, fight a lawsuit, or create a will, you want the meanest, toughest, most badass lawyer you can find in your corner. You want them to fight for you like a mama bear protecting her cubs.
But finding the right lawyer is hard. There are so many options that all seem the sameโoverpriced and intimidating.
Thatโs where alternative business structures come in. Keep reading to find out what is an alternative business structure and why you should care.
What is an Alternative Business Structure?
An alternative business structure (ABS) is a different way of providing legal services outside of the traditional law firm model.
Hereโs a quick breakdown of the key differences between an ABS and a traditional law firm:
- Ownership: Non-lawyers can own an ABS, unlike a traditional law firm where only lawyers can be owners. It opens up more options for investment and expansion.
- Services: ABS companies can provide legal and non-legal services under one roof. A traditional firm only provides legal services.
- Fee structures: ABS companies can get creative with fee structures like fixed fees or contingency fees based on performance. Traditional firms usually bill by the hour.
- One-stop shop: Clients can access a range of services from a single ABS provider instead of hiring multiple professional service firms.
The main goal of an ABS is to improve access to legal services by offering greater convenience, transparency, and affordability.
A Brief History of Alternative Business Structures
Alternative business structures first emerged in Australia in the 1990s as a way to reform the legal services market. The UK was next to adopt ABS legislation in 2007 with the Legal Services Act.
Canada jumped on the ABS train in 2015. Several provinces have enacted legislation allowing for limited non-lawyer ownership of law firms.
The movement keeps gaining steam as more consumers and investors recognize the need for innovation in the legal industry.
Why Should I Care About Alternative Business Structures?
As a consumer of legal services, you should care about ABS companies for a few key reasons:
More options and competition
Opening up the legal market to new models and non-lawyer investors increases competition. More competition generally leads to lower prices, higher quality, and better customer service as companies fight for your business.
Traditional law firms have little incentive to rock the boat. An ABS shakes up the status quo.
Fixed fees
One of the biggest complaints about lawyers is the dreaded billable hour. You never know the final tab, which makes budgeting difficult.
Many ABS companies offer fixed or flat fee pricing for certain services, so you know exactly what to expect. No billing surprises.
Access to more services
Letโs say you want to finish your will but also need financial planning advice. Or you need legal advice on a business merger and help preparing the financial statements.
Rather than coordinating between several professional firms, you can do it all under one roof at an ABS.
Tech-enabled services
ABS companies are more innovative in using technology to deliver legal services. It can include online portals, document automation, and machine learning.
The result is more convenient and affordable service.
Examples of Alternative Business Structures
Here are a few examples of successful alternative business structure companies:
- LegalZoom โ Founded in 2001, LegalZoom is one of the pioneers of online legal services. They provide DIY legal documents as well as connections to lawyers. LegalZoom filed for a confidential IPO in 2022.
- Ernst & Young Law LLP โ Yes, the multinational accounting firm now provides legal services in over 90 countries after acquiring law firm Riverview Law. It is an example of a โBig 4โ accounting firm moving into legal services.
- Axess Law โ Launched in 2012, Axess Law was Canadaโs first ABS law firm. They focus on providing more affordable legal services to individuals and small businesses.
The Future of Alternative Business Structures
The ABS movement shows no signs of slowing down. Here are two key trends to look out for:
- Consolidation โ The legal market will continue to consolidate as big corporations and investment firms acquire more ABS companies. Deep pockets allow them to scale quickly.
- Rise of hybrid firms โ Traditional law firms will adopt more ABS-like features such as non-lawyer ownership, fixed fees, and technology platforms. The line between ABS and non-ABS will blur.
Frequently Asked Questions:
What are the risks of alternative business structures?
Some critics argue ABS companies prioritize profits over quality service. There are also concerns about conflicts of interest when non-lawyers own and manage law firms. However, proper regulation can help mitigate these risks.
Do alternative business structures actually save money?
Research shows ABS companies are able to offer services at a lower cost than traditional firms in many cases. However, you need to compare specific pricing for your needs. An ABS wonโt always be the cheapest option.
The Bottom Line
Alternative business structures aim to make legal services more accessible and affordable for the average Joe. As both a consumer and investor, you should pay attention to how this trend unfolds.
The legal industry is long overdue for a shakeup. Increased competition and innovation will ultimately benefit those who need these services the most.
Itโs about time the lawyers get taken down a notch or two, donโt you think?
So, the next time youโre looking for legal help, donโt limit yourself to traditional law firms. See if an ABS provider can offer what you need at a better price.
๏ปฟYour wallet will thank you.
