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The UK’s liberalised legal services market has attracted dozens of entrants over the past four years, ranging from The Co-operative to PwC.
So far, more than 400 organisations have become Alternative Business Structures (ABS), authorised by the Solicitors Regulation Authority (SRA). An ABS is an entity offering legal services, or a law firm that can raise external capital or bring non-lawyers on board.
Among the latest ABS crop to be granted licences are two legal advice clinics linked to universities. Although most universities offer pro bono advice in legal clinics, the University of Law and Nottingham Law School have taken this tradition a stage further.
In a competitive legal education market, law schools want to innovate and offer students practical experience. Graduates, for their part, need to demonstrate they have gained as much practical experience as possible during their studies.
Nottingham Law School at Nottingham Trent University received an ABS licence for its legal advice centre this year. It hopes students, under close supervision by qualified solicitors, will work in a fully regulated organisation as part of their studies.
About 200 students so far have worked in the centre, which has more than 180 pro bono clients. It has provided more than 10,000 hours of free advice on property and environmental law, among other issues, since June 2014.
Jenny Holloway, the school’s associate dean, says one reason for applying for the licence was to help future-proof the advice centre against changes to the current exemption, which permits it to undertake reserved activities (such as litigation).
She adds, however: “Students find it very exciting that it is part of a teaching law firm. It’s a more effective vehicle for us to increase the variety of opportunities we can offer through the law centre.”
“[The students] have a better context of how the law operates . . . and see how it affects real people,” says Nick Johnson, the centre’s pro bono director.
By operating as an ABS, the centre gives students exposure to a broad range of areas of practice. The non-profit centre is also looking to set up entrepreneurial and intellectual property law services. The centre is considering charging a modest fee for such advice, aimed at very small start-ups — such as young artists or designers — who could not normally afford legal services.
“We have a big graduate population setting up businesses. These are not getting legal advice and cannot afford to as they are going it alone,” Mr Johnson says.
But Ms Holloway would not expect all law clinics associated with law schools to opt for the ABS model. “You have to be very focused,” she says.
Some academics say law schools with ABS status are part of wider changes in the legal profession — including in the training of solicitors.
The regulator is reviewing how solicitors are trained, and is expected to report next year. There is speculation it may permit different ways of work-based learning that demonstrate certain skills that solicitors need in order to gain a licence. Legal work experience at university may become one such way.
“How many law schools go down that route will depend on the SRA review,” says Jackie Panter, associate head of Manchester Law School at Manchester Metropolitan University. “Some may be setting up partly in anticipation of changes.”
There are disadvantages for advice centres if they opt to become an ABS. They will be regulated like a law firm, and grapple with problems such as professional indemnity insurance. Continuity of client care may also be a factor in long-running cases — a challenge when there is a regular turnover of graduates each year.
While all this is new to the UK, the US has seen a number of law schools carving a niche for themselves by starting up firms to employ and train recent graduates.
ASU Alumni Law Group was launched by Arizona State University and is a standalone, non-profit educational law firm. Modelled on a teaching hospital, it trains recent graduates from the Sandra Day O’Connor College of Law in how to practise law while providing legal services to clients at below market rates.
Rates vary depending on the complexity of the advice, the client’s ability to pay and the experience of the attorney assigned to the case. Experienced attorneys supervise new attorneys closely, while providing affordable legal services in a variety of practice areas.
Marty Harper, ASU chief executive, says law schools are going to have to be “more pragmatic” and that the range of legal cases seen by his practice is much broader than at a typical pro bono clinic.
US law schools do have pro bono clinics, but these may be narrowly focused on particular areas, such as housing, he adds.
The firm charges rates that are lower than those of a typical law firm. “We make clients pay rates that are more affordable, but we do ask them to pay something,” Mr Harper says.
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