*/
A growing number of barristers are modernising the way they do business, particularly as financial pressures rub the shine off the traditional chambers model.
Common factors seem to be a desire to reduce overheads, become more market facing, and develop business models which allow them to be more competitive in the legal services marketplace. Some also have an eye on creating capital value.
The Bar Standards Board has made great strides to facilitate this entrepreneurial activity, by giving regulatory freedom to form entities. The take-up so far has been steady but unspectacular. Most have been incorporations of self-employed practices of individual barristers, where the barrister is sole owner of the entity or joint owner with their spouse.
The few chambers that have embraced the concept have largely sought to replicate the traditional chambers model, with associated barristers remaining self-employed and central overheads funded by way of fee contributions.
Our belief is that things are about to change radically and quickly. We anticipate the emergence of genuine ‘Bar firms’ that emulate solicitors’ firms. These Bar firms will employ staff and barristers, their stakeholders will share risks and rewards, and, over time, they may attract equity investment and capital value on sale. How then might Bar firms benefit from the experiences of their law firm cousins?
Working with law firms over many years, we have seen the collective power of a group of individuals working together with a view to profit, and how the pooling of resources and intellectual capital can bring out the best in each individual. But sharing risk and reward is likely to be an alien experience for many barristers. Some may be enticed by the prospect but find it hard to take the required entrepreneurial leap, put hard-earned cash on the line and accept the uncertainties of collective decision-making.
Keep the core ownership tight. It is best to have a small number of similar-minded, risk-oriented individuals owning your entity vehicle and find other ways to incentivise and reward others.
It is rare to see a new law firm set up in any other legal form than a limited liability partnership or limited company. It is likely that most Bar firms will adopt the same approach for their trading entities. As law firms introduce non-lawyers (mainly professional managers and equity investors) as owners or managers, there has been a strong growth of SRA Alternative Business Structures. As barristers follow suit, there is likely to be a similar growth in BSB Licensed Bodies.
Take specialist accountancy and legal advice on the best legal structure for your entity.
It is not uncommon to find that the business model initially proposed is not viable. It is usually possible to restructure to bring it clearly within regulation, or to take outside the scope of regulation altogether.
Take specialist legal advice on the regulatory status of your proposed model to avoid wasting time and money.
However exciting a business model may appear, financial forecasts with realistic sensitivity analysis are essential.Get them stress-tested by external accountants experienced in the legal sector to help temper unrealistic optimism.
Know your numbers inside out before taking steps to formally engage with stakeholders, funders and other third parties.
Barristers within chambers are adept at managing conflicts of interest. Once sharing profits as LLP members or co-shareholders, sophisticated conflict management protocols are essential.
Run exhaustive tests to make sure future conflicts can be identified and will not hole your entity below the waterline.
Some external funding will probably be required. This will be debt, equity or a mixture of both. The key to getting the mix right is understanding the drivers of the funders and their impact on structure and operation of the entity.
Be clear on what type of funding is needed and seek to align the interests of owners and funders.
A growing number of barristers are modernising the way they do business, particularly as financial pressures rub the shine off the traditional chambers model.
Common factors seem to be a desire to reduce overheads, become more market facing, and develop business models which allow them to be more competitive in the legal services marketplace. Some also have an eye on creating capital value.
The Bar Standards Board has made great strides to facilitate this entrepreneurial activity, by giving regulatory freedom to form entities. The take-up so far has been steady but unspectacular. Most have been incorporations of self-employed practices of individual barristers, where the barrister is sole owner of the entity or joint owner with their spouse.
The few chambers that have embraced the concept have largely sought to replicate the traditional chambers model, with associated barristers remaining self-employed and central overheads funded by way of fee contributions.
Our belief is that things are about to change radically and quickly. We anticipate the emergence of genuine ‘Bar firms’ that emulate solicitors’ firms. These Bar firms will employ staff and barristers, their stakeholders will share risks and rewards, and, over time, they may attract equity investment and capital value on sale. How then might Bar firms benefit from the experiences of their law firm cousins?
Working with law firms over many years, we have seen the collective power of a group of individuals working together with a view to profit, and how the pooling of resources and intellectual capital can bring out the best in each individual. But sharing risk and reward is likely to be an alien experience for many barristers. Some may be enticed by the prospect but find it hard to take the required entrepreneurial leap, put hard-earned cash on the line and accept the uncertainties of collective decision-making.
Keep the core ownership tight. It is best to have a small number of similar-minded, risk-oriented individuals owning your entity vehicle and find other ways to incentivise and reward others.
It is rare to see a new law firm set up in any other legal form than a limited liability partnership or limited company. It is likely that most Bar firms will adopt the same approach for their trading entities. As law firms introduce non-lawyers (mainly professional managers and equity investors) as owners or managers, there has been a strong growth of SRA Alternative Business Structures. As barristers follow suit, there is likely to be a similar growth in BSB Licensed Bodies.
Take specialist accountancy and legal advice on the best legal structure for your entity.
It is not uncommon to find that the business model initially proposed is not viable. It is usually possible to restructure to bring it clearly within regulation, or to take outside the scope of regulation altogether.
Take specialist legal advice on the regulatory status of your proposed model to avoid wasting time and money.
However exciting a business model may appear, financial forecasts with realistic sensitivity analysis are essential.Get them stress-tested by external accountants experienced in the legal sector to help temper unrealistic optimism.
Know your numbers inside out before taking steps to formally engage with stakeholders, funders and other third parties.
Barristers within chambers are adept at managing conflicts of interest. Once sharing profits as LLP members or co-shareholders, sophisticated conflict management protocols are essential.
Run exhaustive tests to make sure future conflicts can be identified and will not hole your entity below the waterline.
Some external funding will probably be required. This will be debt, equity or a mixture of both. The key to getting the mix right is understanding the drivers of the funders and their impact on structure and operation of the entity.
Be clear on what type of funding is needed and seek to align the interests of owners and funders.
Efforts continue on gender equality, support for the Bar, meaningful reform for the sector and advocating for the rule of law
To mark International Women’s Day, Louise Crush of Westgate Wealth Management looks at how financial planning can help bridge the gap
Casey Randall of AlphaBiolabs answers some of the most common questions regarding relationship DNA testing for court
Leading drug, alcohol and DNA testing laboratory AlphaBiolabs has made a £500 donation to Beatson Cancer Charity in Glasgow as part of its Giving Back campaign
Girls Human Rights Festival 2025: a global gathering for change
Exclusive Q&A with Henry Dannell
Marking Neurodiversity Week 2025, an anonymous barrister shares the revelations and emotions from a mid-career diagnosis with a view to encouraging others to find out more
Patrick Green KC talks about the landmark Post Office Group litigation and his driving principles for life and practice. Interview by Anthony Inglese CB
Desiree Artesi meets Malcolm Bishop KC, the Lord Chief Justice of Tonga, who talks about his new role in the South Pacific and reflects on his career
Sir Nicholas Mostyn, former High Court judge, on starting a hit podcast with fellow ‘Parkies’ after the shock of his diagnosis
Once you submit your silk application, what happens next? Sir Paul Morgan explains each stage of the process and reflects on his experience as a member of the KC Selection Panel