Stephensons: on becoming an ABS

Stephensons Solicitors, a leading legal aid firm in the north-west, secured approval as an Alternative Business Structure (ABS) early in the new year, and has already appointed its first non-lawyer partner, writes Elizabeth Davidson.

The 31-partner firm is the third largest supplier of civil legal aid services in England and Wales, and is among the first of the 74 ABS licensed so far to have a legal aid contract – Irwin Mitchell, for example, also does some legal aid work while Co-operative Legal Services offers a legal aid service in family law. So, what is the ABS licensing process like for a legal aid firm, and what are the advantages of conversion?

Ann Harrison, chairwoman of Stephensons, said: ‘It didn’t make much difference to our application that we do legal aid. There was only one question about it in the forms – they wanted to know how much of our turnover was due to publicly funded work.

‘Our primary reason for doing this was that we wanted to bring new skills and talent to our partnership, mainly from internal candidates. We’ve been thinking about this for two years and we put in our application in early May. It has taken from then until now for it to go through, so it’s a long process with lots of waiting around. It’s quite an onerous process, and they require a huge amount of information about the firm and its finances. We are lucky enough to have a risk manager, so we could farm most of the work off to him, and it took a week of his time. We also had to supply a lot of information about our Colp and Cofa.’

Stephensons has more than 400 staff across eight offices in Altrincham, Wigan, Leigh, Bolton, Manchester and St Helens. Legal aid accounts for 40-45 per cent of its total £15m turnover. The firm covers all areas of legal aid except immigration and asylum, mental health and education, and has a substantial criminal defence team.

Civil legal aid providers across the country are, of course, currently digesting the results of the latest civil legal aid bid round, which were announced this month. Harrison says the firm suffered, although it fared much better than many in other parts of the country – the results for housing, family and immigration and asylum have been drastic for many firms. She says: ‘We got the maximum we could get but less than we bid for.’

Planning ahead
The firm has also had to make changes ahead of the implementation of the Legal Aid, Sentencing and Punishment of Offenders Act, which will bite in April, removing legal aid for a raft of areas including welfare benefits, employment, housing except where there is an imminent risk of homelessness, and large parts of family law.

‘We accepted there had to be some change to the legal aid scheme,’ says Harrison. ‘But we think this Act is political in nature, rather than being about saving money. If you protect people’s benefits then you keep them in their home. Otherwise they develop more problems. If you can knock an issue on its head at an early stage then you prevent it escalating and costing more.’

In response to the cuts, Stephensons will continue its welfare benefits work post-April on a pro bono basis, with a full-time, two-member team. Harrison says: ‘This is something we feel really strongly about, because I think people are really going to struggle. We will bring appeals on issues of fact rather than law. The statistics show that, on first level appeals, something like 40 per cent are overturned.’

The firm has restructured its housing, family and crime departments. Its housing team will pursue housing disrepair cases on a conditional fee agreement basis after April. Some members of its family team have been transferred to child care work, which will remain in scope, and it has produced a menu of fixed fees for other family law areas, such as divorce, so that clients can see exactly what work will cost. It has bolstered its crime team in the areas that remain in scope, such as civil liberties.

Stephensons is unusual in that it is a consumer-focused firm with a spread of legal aid and fixed fee work. Harrison says it is interested in ‘all of the things ABS allows’, particularly expanding the range of its partnership. The firm has already appointed its first non-lawyer partner, Neil Ireland-Davies, who heads up the costs department. Ireland-Davies joined as a costs draftsman in 2001, since when he has helped grow the costs department into a 24-strong team which handles all of the firm’s own costs drafting as well as supplying external contracts.

It is also interested in looking for external investment – but won’t its publicly funded work put potential investors off?

Harrison says she is yet to fully explore the possibilities but has made some initial enquiries.

‘Some people have said they wouldn’t look at a legal aid firm as the margins are too low. Others have shown some interest. The fact we are of a certain size might help, as one of the bigger firms we stand more chance.’

Whatever the challenges and opportunities that may lie ahead in legal aid, Harrison says she is delighted Stephensons is now an ABS. She has two key points of advice for any legal aid firm thinking of taking the plunge.

‘Number one, don’t be afraid. Go for it. Secondly, work with the SRA [Solicitors Regulation Authority]. They were quite helpful in answering any questions we had.’


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About Author: Elizabeth Davidson

Elizabeth is a freelance writer and journalist, who specialises in law and justice.

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