Sally Holdway - a solicitor and consultant - runs Legal Edge Consulting. She delivers CPD training seminars and works with law firms and ABSs on developing 21st century strategic and operational development plans. Here, she discusses - The ABS Big Bang

We begin 2012 very much as we ended 2011, talking about Alternative Business Structures.  What will their impact be, will existing law firms be threatened, and just how many will there be?

At the time of writing, around 65 first stage ABS applications have been received by the SRA.  Not an insignificant number, particularly bearing in mind that they include volume providers and large corporates.

So just who are these new entrants? Well, those who have shown their hand to date include few surprises.  Co-op legal services have applied - but are not new entrants to the market.  Their business already has a £25m annual turnover.  Irwin Mitchell, who have also long expressed an interest in attracting external investment, are also on the ABS early adopter list.

Do we really need to fear the new entrants?  Will they be impacting solicitors' current market share?  Perhaps not.  One recent survey of the deregulated opticians' industry (which is often held up as an example of how legal services may develop in a post-ABS environment), demonstrated that whilst the large chains had attracted significant volumes, the number of independent small “high street” businesses remained largely the same.  How can this be the case?  Well it may be that the Vision Express model has uncovered the “latent market” - that portion of the population who would not ordinarily seek out their services, but a more consumer focused and easily accessed service has persuaded them to do so.  Or it may be that clients are taking part of their custom to the traditional providers and some to the new entrants.  Or it could just be that, as a nation, our eyesight is getting worse.

This is quite a heartening example but does not give law firms room for complacency.  Due to their significant marketing savvy and huge budgets, there remains a threat that ABSs will impact existing practices' client base.  One effective response to this risk is for law firms to implement communications strategies for all clients – past and present.  This can be achieved relatively simply and at a low cost base.  All firms should be prioritising this.

One certainty is that the new providers will be exploring how to do law differently. Many of these focus around the new “production line” approach to case handling which is now being actively developed and explored.  Don't worry - these are not as impersonal as they might sound.  At a base level, it’s simply a matter of reallocation of resource, with a case moving through a law firm, rather than it being placed statically with one fee earner.  During its journey a matter will interact with IT, outsourcing and the appropriately qualified level of staff at key, pre-defined points from inception to conclusion.   This approach can significantly reduce internal processing costs, greatly assist with risk management (and the new OFR requirements) as well as improve client service levels.

All of this also means new types of roles will develop to support the workflow.  Will your firm employ “legal process re-designers” or “client consultants” in years to come?  These types  of opportunities are beginning to evolve.

With every change to the market comes opportunities and any strategic review of a law firm should include exploring these.  ABS alliances with current referrers is one such example.  Developing white labelled legal process outsourcing units to service new ABSs is another.  Imaginative law firms are already taking a lead here.

One of the key aims of the Legal Services Act was to increase innovation in legal service delivery and the new kids on the block are already demonstrating that there are different ways of doing law.  Let the creative revolution begin.