Local authorities clamber aboard the ABS bandwagon

It has taken just over two years, but for those standing patiently at the ABS bus stop for a local authority to gain a licence the wait is finally over. And predictably, two have come along at once.

Last week (8 August 2014) Buckinghamshire County Council became the first local authority to gain ABS approval with its new venture, Buckinghamshire Law Plus, due to be up and running in November.

This week, the Solicitors Regulation Authority (SRA) gave the nod to the London boroughs of Harrow and Barnet (13 August 2014). The merged legal teams’ ABS, HB Public Law, will become effective on 1 December.

It’s been a long time coming for both groups. Barnet and Harrow applied for their ABS licence in November last year (20 November 2013) and Buckinghamshire in December (2 January 2014), meaning approval has taken longer than the six months in which the SRA is supposed to get applications passed.

Indeed the delays caused several local authority legal heads to call a meeting with the SRA earlier this year to complain about the length of time it was taking to get their licences through (25 March 2014).

But as Buckinghamshire’s legal head Anne Davies told The Lawyer last week, making the process work for a new type of organisation was tricky.

The original ABS legislation was drafted with companies in mind, rather than public bodies. That meant the local authority pioneers had to look at issues such as where the control of their organisation lay, client confidentiality and conflicts of interest – all issues which both firms and corporates will already have grappled with, but which posed challenges for Buckinghamshire.

Luckily Bevan Brittan was on hand for both the authorities to have gained the licences so far.

The firm is building a nice little niche for itself in the area of solicitors’ regulation – a niche which saw it take home Regulatory Team of the Year at the Lawyer Awards in June. It is advising both the SRA on issues such as law firm insolvency as well as the local authority ABS applications, and partner Iain Miller was named in the Hot 100 2013 for work including advising the Bar Standards Board on ABS issues.

The precedent now set by Buckinghamshire Law Plus and HB Public Law may prove comforting to others looking to follow suit. Authorities including Cambridgeshire County Council (26 March 2014) and Lambeth Borough Council (18 March 2013) are also eyeing up the possibility of ABS conversion.

A key draw for the local authorities becoming ABSs is the chance to convert a cost centre into profit – which in a time of continued cost-cutting is crucial. The same motivation was also a driving force behind BT’s creation of ABS BT Law, which was set up in part to help generate revenue (4 March 2013 and 7 October 2013).

However, as outlined in our feature on the future of local authority legal services in March (24 March 2014), the path towards ABSs and other innovations, designed to help public bodies through a time of austerity, is not always smooth.

While Buckinghamshire and Barnet and Harrow have successfully navigated their way through the ABS application process, they will have to work hard to make the licence pay off.