Unlike the traditionally regulated law firm model, the ABS permits law firms to be managed and/or owned by individuals who are not legally trained, to provide services beyond traditional legal advice and even to receive external investment. This means, in part, that such firms can benefit from talent within their partnership from any field and thereby amass a wider range of commercial acumen and technical expertise to support clients.
The ABS conversion is a change in regulatory status that has no impact on the existing corporate structure of the firm; Reed Smith remains an LLP, although its membership will include a corporate vehicle. It applies to the firm’s UK LLP incorporating partners in the UK, France, Greece, UAE and China. The firm’s single partnership and single global profit pool will remain unaffected.
Tamara Box, Reed Smith’s EME managing partner, said: “We are incredibly proud to be at the forefront of modernisation of big law. 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.
“Our clients’ needs have changed. In this era of digital transformation, they are looking for a strategic service provider that can go beyond just providing advice on the black letter law but rather one that can assist in solving any challenge they face to help them achieve their business goals.
“Whether that solution comes from individuals with a legal background or not is irrelevant. We are currently a firm of 3,000 people, and we recognise that the fruits of our labour come from our entire global workforce. We want to ensure that we can retain and attract the very best talent across the board, and the ABS enables this for us.”
The introduction of the Legal Services Act in 2007 first enabled UK law firms to convert to ABS. In the United States, only in Washington, D.C. are individuals without legal qualifications allowed to be law firm partners, but states such as California, Utah and Arizona are pushing for regulatory reform to permit ABS models.